Tuesday , February 25 2020
Home / COLUMNISTS / Andrew Mwenda / Museveni opens a Pandora’s box

Museveni opens a Pandora’s box

 

Artistic impression of a section of the proposed Jinja-Kampala Expressway. Museveni has intervened its procurement process.  PHOTO UNRA

 How the president’s intervention to halt the procurement of Kampala-Jinja expressway is a disaster

THE LAST WORD |  Andrew M. Mwenda |  Last week, I had a meeting in Mukono, a town only 20km east of Kampala. The meeting was scheduled for 2pm. Knowing the heavy traffic on Jinja Road, where Mukono is located, I left Kampala City Center at 1pm. This gave me one hour to navigate the traffic jam. Jinja Road is a major artery connecting our landlocked country to the sea. It is congested with long queues of trailers that make traffic jams on that road a nightmare. But Wednesday last week was record breaking. I got to Mukono at 4pm.

This traffic congestion, coupled with the delays it imposes on motorists, has serious economic implications. There is a lot of working hours motorists lose in traffic when going to office or markets. Add to this the delays in transportation of goods from the coast to Kampala. The actual cost of these traffic delays can run into hundreds of millions, if not billions, of dollars per year. For a country with a GDP of only $34 billion, this is too high a cost.

Yet President Yoweri Museveni has written to the Inspector General of Government (IGG) asking her to stop the procurement of the Kampala-Jinja Expressway (KJE) apparently because there is “corruption” in the ongoing process. I have argued before that corruption in Uganda is embedded mostly in the efforts to fight it. Ironically if Uganda reduced the number of institutional checks put in place to fight corruption, it could reduce the problem.

The KJE is a project worth $1.2 billion. This is a lot of money for our poor economy. Public officials everywhere have power to allocate lucrative rights over scarce resources. It follows that many would seek to appropriate a share of the profits they help allocate i.e. be corrupt. Again as I have always argued, these corrupt transactions do not automatically lead to poor outcomes. That depends on the interaction of many other factors within a country.

For instance, there can exist within a country’s polity strong pressures for results: ensure delivery of the right quality of road, done within the appropriate time and at the right price. In such circumstances a contractor does not have to inflate the price of the road. He can pay bribes out of his profits. Take the example of KJE. Out of the $1.2 billion cost, the contractor’s profits (if we assumed them at 10%) would be $120m. He can cut only one 6th of this ($20m) to pay bribes to officials at UNRA to buy long-term favours from them without affecting the price, quality and speed of building the highway.

Alternatively, a contractor can add a 5% mark up on the cost of the road ($60m) to cater for the bribes. So KJE would cost $1.26 billion instead of $1.2 billion. This is an insignificant extra cost. Indeed, when companies bid, the prices can vary based on their cost efficiencies. Therefore a 5% extra cost by any supplier does not lead to poor outcomes. If the polity has capacity to enforce results, the contractor will to do the right quality road, within the right time frame at 5% extra cost. The idea that the existence of graft in a transaction automatically leads to bad outcomes is therefore mistaken.

In Uganda’s case, the costs of fighting assumed and/or alleged corruption in public procurement far outweigh benefits sought. Let us assume there was corruption in UNRA’s procurement of a partner to do KJE. Knowing Uganda, the bribes would not exceed 5% of the cost i.e. $60m. This payoff to UNRA staff would have had little likelihood of adverse outcomes because the maintenance of the highway will be in the hands of the contractor for the next 25 years. If he does a poor quality road, he would have a crisis at his hands when it breaks down in a few years. The firms involved are all international with reputations to protect.

However, the intervention by the President has led to a halt on the procurement process, which will delay the commencement of construction by not less than a year. If the IGG recommends a re-tendering, that will delay the project by three years. Even a mediocre economist will tell you that the cost of this delay on our economy cannot be less than $900m over three years. This means the cost of trying to fight alleged corruption in the current procurement process exceeds benefits sought. I have many examples of this stupidity in the last 17 years – NSSF Pension Towers being one.

The greater stupidity is to assume that officials at the IGG, the institution requested to investigate alleged corruption at UNRA, cannot be bribed. With a contract sum of $1.2 billion, those who failed to qualify and are now seeking a new chance to re-enter the procurement process. They will stop at nothing to cause the IGG to cancel the entire process and order a new one so that they can have another chance. So the lobbying and bribing at the IGG is going to be intense. I suspect it is agents of companies that were not pre-qualified that went to Museveni alleging corruption. Therefore, real the corruption is these allegations of corruption.

When I was still young and intelligent, I used to be a big fan of institutional checks and balances in procurement. But I was being theoretical. As an investigative journalist at Monitor, I learnt how the corrupt use (actually abuse) these checks and balances to paralyse procurement and multiply corruption. Unscrupulous bidders would come to the press, or go the Central Tender Board (the predecessor of PPDA), parliament, police, CMI, ISO, State House, etc. to cause a cancellation of the process.

The wheeling and dealing would get dirty: officials at IGG, police, intelligence, State House staff, etc. would be bought off or accused of having been bought. Then MPs, journalists, columnists and pundits would be bribed to “expose” corruption and make self righteous arguments calling for cancellation of the tender or contract. Companies with good reputations would be unwilling to go dirty. So they would pull out of the process and leave the field to crooked ones.

What began as a seeming effort to fight corruption, I realised, was actually a charade to entrench it. I become critical of attempts to halt procurement process on the allegations of corruption. With his instructions to the IGG on alleged corruption in KJE, Museveni has opened a Pandora’s box. Please watch the wheeler dealing that is going to dominate the “investigation.”

*******

amwenda@independent.co.ug

Loading...

10 comments

  1. First of all, Thank you Andrew Mwenda – Ugandan print, radio and television journalist, for your elaborate article, which touches the very chord of Uganda’s National Infrastructural Transformation Agenda.

    While it is true, in some instances, that halting procurement process of a mega project on grounds of investigating corruption allegations leads to more loss of money than saving it, it doesn’t necessarily hold true for all cases across the board.

    Uganda must always do due diligence when it comes to project cost bench-marking. A number of national projects have been flouted over failure to do just that, and a heavy price will or is already being paid most especially in electricity that is generated but not consumed, all at the cost of the taxpayer.

    The following link, presents highlights of some key national projects, where due diligence would have saved Ugandan taxpayers some dollars, even with consideration of acceptable corporate levels of corruption.
    https://observer.ug/viewpoint/58994-why-ugandans-shouldn-t-celebrate-museveni-s-infrastructure

    With such humongous negligence as regards project cost bench-marking, it is evidently clear that the “cost of corruption”, even by modest means, is under represented in Uganda’s case – with all due respect sir.

    While it is irrefutable that corruption has been institutionalized in Uganda, efforts of fighting it, when genuine, should be welcomed. This is particularly important because soon on later, such spending overtime, will reflect in the nominal GDP National Debt ratio.

    We still have the Standard Gauge Railway (SGR) to contend with, and if such mega projects are overly inflated, their inconsiderate weight on the taxpayer is no incentive either for a country’s economic growth. Why must Uganda’s case (National Project costings), always differ from the rest of its Sub Saharan counter parts?

    PLO Lumumba has always argued that corruption is not a victimless crime and I honestly agree with his hypothesis. If one is to go by his hypothesis, the question then becomes; what “level of corruption” is tolerable to have a national infrastructural project done in Uganda, vis-a-vis the magnitude of “economic distress” it causes its “victims”?

    Quiet of me, I ponder the following question; Is there a likelihood of Sub Saharan Africa actually improving its corruption profile and economic development by extension, besides contemplating on the level of corruption acceptable as regards delivery of National Infrastructure Projects? May be William Easterly’s 2007 book, “The White Man’s Burden:…” may provide some clues.

    In his 2018 book titled “Making Africa Work through the power of Innovative Volunteerism”, Dr. Richard Munang avers that Africa is not poor. It is poorly managed. His book echoes World Bank Publications of 2000 and 2017; “Can Africa Claim the 21st Century?”, “Governance and the Law” respectively, within which good governance and leadership are seen to have a contribution to economic development.

    If I may borrow Jiddu Krishnamurti’s quote, “It is no measure of health to be well-adjusted to a profoundly sick society” adopted to the corruption narrative, I may rephrase the quote as follows, “It is no measure of economic growth and development performance to be well-adjusted to a profoundly corrupt society”.

    Our leaders, governors and citizens at large, must be held to a higher moral standard. That’s probably one of the hardest feat that our country will have to undertake, especially after many years of condoning, to a certain extent, a cancerous vice of corruption.

    • Very elaborate response. I can’t agree more.

      Thanks Andrew and thanks Jacob.

    • The amazing thing about Uganda is not its unfortunate national love affair with corruption, which is of epidemic proportions and culturally accepted to the extent that those who manage to steal even large sums of money or property are not only widely envied, respected and admired but are protected by the Establishment.

      The amazing if not miraculous point is that there are many ordinary Ugandans who do not participate in this vice and yet they still manage somehow to survive. But Heaven help those people if they get in the way of any get rich quick schemes. We have all heard such stories of what happens if they do.

      Which is why this recent ‘walk against corruption’ was laugh-out-loud ridiculous. After all the people promoting the walk have been, shall we say, the chief benefactors of this ugly phenomenon.

  2. Corruption is stealing. It’s morally and ethically wrong. Th disadvantages far outweigh the ‘benefits’ much as Mwenda seems to be justifying it. I hv not seen the corrupt use that money meaningfully, i.e build a school or clinic. They take, keep the money in their foreign bank accounts instead.
    Mwenda narrative of the constructor, slashing off 5% of the profit to pay bribes is wrong. I hv seen contractors doing shoddy work to cover up for the 5% that was paid as bribes.

  3. I kinda agree with you on this one, Mwenda. Especially the case of Pension Towers. Total waste of time and opportunity. Hope KJE doesn’t come to this.

  4. What beats a Ugandan’s understanding in most corruption cases is as if the corrupt are not known.Secondly by now government should have a list of corrupt service providers and by the way we talk of bubu can’t UNRA surprise us and build that road?

  5. Corruption is in every sector. Those who work in government have made it a culture. President m7 has never been categorical in fighting it. It has penetrated Uganda s public sector first.
    My home is near Mbalala. Being aware of the traffic problèm before leaving for Entebbe international airport to catch my flight that was at 4.15am on Monday 20th January, I had to estimate to leave home 4 hours before 2am for a distance of 60km. Being night, I managed to arrive at 2 am at EBB. If the traffic flow at night is that slow in the night, just immagine what we are facing during daytime along that route of Kampala-Jinja. Not only since last year, but I have counted 16 years of traffic congestion along Kampala Jinja route. Call it “no change”.

  6. I may sound sarcastic here, but how sure are we that your article is not sponsored or pushed by the so called best evaluated bidder? In Uganda anything is possible Andrew.

  7. Andrew I agree with your observation indeed I have always been suspicious about people who dash to seek remedies from the powers that be yet there are clear avenues of dispute settlement under the PPDA .I also believe some companies especially from the oriental countries do budget for ‘ kick backs ‘ hence bribing to get awarded the project would not affect the quality of the works. The KJE is likely to be the scandal of this century.

  8. ejakait engoraton

    EVERYTHING has its TIME; the RIGHT time, and the WRONG time.

    The time to fight corruption was 20 or maybe even 30 years ago, way before it went out of control.
    Whatever M7 is trying to do including to walk it away, or trying to “walk the talk” is but just a show.
    M7 thrives on corruption and it is the fuel that has driven his regime and made otherwise skinny impoverished men into what they are now, millionaires in a sea of poverty.

    Right from the bush days , and even before, M7 excels in the art of creating a problem and then coming as the saviour to solve the said problem. In the bush, they wore UNLA uniforms and terrorized the local people, sometimes even killing some, and they would fake a gun fight between themselves, purportedly chasing the “Anyanyas”. And they would then come in the morning and claim to be the saviours.
    M7, as M9 has repeatedly said, is the biggest consumer of intelligence information, and he knows who the perpetuators of corruption are, where their assets and money is but uses this information for his personal benefit rather than for the good of the nation.

    BUT as KARAGURA says, like in the case of CRANE bank where he disclosed his interest after we took him on, I would not be surprised if this in M9s personal interest.

Leave a Reply

Your email address will not be published. Required fields are marked *