Views on Katosi Rd mud business

By Joseph Were

Big money deals expose political power fights

The scandal over the award of the contract to upgrade the 74km Mukono-Katosi road to an alleged fake company, Eutaw Construction Company Inc., has exposed how corruption can be the handwork of top-level politics. It gives a glimpse of the behind-the-scenes political fights happening today that sometimes leave even President Yoweri Museveni helpless.

When Museveni commissioned the Mukono-Katosi road on July 7, 2014, for instance, he was fully aware of the scandal swirling around it but he was helpless to stop it.  He had several reports on his desk that Eutaw might in fact be a fake company.  The office of the IGG had first complained about it in February 2014.

But Museveni appears to have been aware that recurrent public procurement debacles in State House are a result of intra-NRM political manoeuvres and systemic constraints, and not merely corruption. He knows that even if a public official desired to do good under the current system, they might fail and that politico-structural remedies are required, not purges of individuals or single projects.

So he went ahead to launch the project- as a political decision because failure to launch it could possibly have been the equivalent of him suffering a political heart attack. He had promised the road since the 1990s and again ahead of the 2011 elections. With another election looming in 2016, the road could be used to smear him as a failure in an area where the NRM and the opposition are almost equally represented. Of five MPs, three are NRM, one DP, and the other is an Independent.

But Museveni could have been making another calculation. If the Senkeeto group had got Shs24.7 billion from the Uganda National Roads Authority (UNRA), and about Shs14 billion of that had been given to a sub-contractor; China Chongqing International Construction Company (CICO) to behave as if it was actually doing work, then clearly the perpetrators of the scam were after something bigger. They want the rest of the money. Can Museveni stop them laying their claws on it?

That is a political dilemma and possibly explains why Museveni insists on getting involved in each and every big procurement project in Uganda. It also means the full import of the fight over the Katosi road’s  Shs 165 billion might in fact not be appreciated even when it is recognised to be less about money and more about political power. Three important facts explain this.

First, every top manager of UNRA, which is the centre of this saga, must be vetted to be ‘politically correct’ before being allowed to control its huge budget of about Shs 2.4 trillion in the 2014/15 Financial Year. This partly explains why there are constant fights over the job of UNRA executive director. Different political power centres want to control its trillions.

Secondly, no firm wins a Shs 165 billion contract in Uganda unless its affiliates have been carefully vetted for ‘political correctness.’ The Independent revealed part of this in the story titled; ‘Unrefined oil politics: How close links to Mbabazi cost Chinese US$3bn deal’ (The Independent July 4, 2014).

In the Katosi road scam, Apolo Senkeeto, the Eutaw deal points-man in Kampala, and his wife, Nakku Senkeeto belong to the top echelons of NRM in the Diaspora. They made their bones in the Uganda North America Association (UNAA) and are involved in numerous ventures in Uganda; including tourism and real estate. They are also born-again Christians, which is a de facto ‘green card’ into State House.

Thirdly, to execute a deal of the magnitude of the Mukono-Katosi deal requires a well-coordinated network. The Eutaw tricksters even met President Museveni twice in State House. Apolo Senkeeto and his mzungu-Chinese figurines do not have the capacity to coordinate a network stretching from State House, Cabinet, UNRA, to local and international banks and insurance firms. Behind Senkeeto must be lurking some accomplished puppet masters or what the Minister of Works and Transport, James Abraham Byandala is calling the “mafia”. They are the reason why Senkeeto is not in jail.

Good politics, bad management

Such challenges are well-documented by procurement experts like Prof. Khi V. Thai of the School of Public Administration at Florida Atlantic University who has provided technical assistance to Uganda.

In his essay, ‘Challenges in public procurement’, Prof. Thai says a sound public procurement system has to accomplish two sets of requirements: management requirements and policy requirements. He lists the procurement management requirements as quality, timeliness, cost (more than just the price), minimising risks, and maintaining integrity.

Among procurement policy requirements; he lists economic goals (preferring domestic or local firms), environment protection or green procurement, social goals (assisting minority and woman-owned business concerns), and international trade agreements. In Uganda’s case, he would include political considerations.

But, like other experts, Prof. Thai also believes the sheer scope of public infrastructure projects and the numerous fields of expertise involved overwhelm some project implementers. The political overseers usually lack both procurement knowledge and technical know-how.

Unfortunately, as in Byandala’s case obviously, the politicians cannot resist the temptation to throw their weight around. If Byandala had left UNRA’s technical people to do their due diligence, he would not be stewing in Katosi hot-soup. But when politicians like Byandala fail at moments like this, they possibly need to be pitied more than condemned or executed.

That is why the attention riveted on how to ensure that financial loss over the deal is ameliorated, the job is done, and the offenders are, possibly, netted is also misleading. It is similar to the red-herring of always focussing blame on politicians under the spotlight.

In the Katosi road case, the turning point is being presented as November 7, 2013 when Minister of Transport, James Abraham Byandala, is said to have given then-Acting Executive Director of UNRA, Engineer David Luyimbazi a “sign the Eutaw deal or I will fire you” verbal warning, followed by a letter a week later. In reality, details indicate that at that point, the Eutaw deal was already so rotten that Byandala’s meddling could not attract any more flies.

In any case, Byandala wrote his letter on November 14, 2013 after the Solicitor General had approved the Eutaw contract on November 7, 2013. Of course Byandala’s meddling was unwarranted, and his work methods elsewhere have raised queries. But in all possibility, Byandala could have looked at the Katosi project log-frame and concluded that time was running out. After all, the contract had been awarded. What remained were minor details. He could not stomach the incompetence anymore.

Critically, Eutaw first bid for the contract in July 2010 when Byandala was not the minister of transport. Therefore, anyone looking for the masterminds of the Eutaw scam would know that Byandala was not the initiator of the deal with Eutaw, although he could have been co-opted into it after he was appointed much later in May 2011.

Three of the other UNRA officials who have been suspended over the deal were there from the start; Joe Ssemugooma, was the director of finance and administration, Berunado Kimeze Ssebbugga, the acting executive director, was director operations, and David Luyimbazi was director planning. The UNRA board under instructions from the IGG, on Aug. 29 suspended all three and another; Marvin Baryaruha, the UNRA legal counsel.

At the time Eutaw first bid for the road in 2010, the ED was Peter Ssebanakita, who was being hounded out of office by what he also famously referred to as a bribe-soliciting “mafia”.

When Byandala was appointed, he tried to save Ssebanakita but lost. Even the Public Procurement & Disposal of Public Assets Authority (PPDA), when in June 2014 it issued a report of its investigations into the Eutaw deal, clearly exposed how the deal could have technically resulted from UNRA’s procurement department. Note that PPDA was not pointing fingers at any official.

Eutaw was approved by the UNRA Contracts Committee as the Best Evaluated Bidder on January 19, 2011. John Byabagambi, who even then was the state minister for works, confirmed back then that the only reason Eutaw was not taken on back then was because UNRA did not have money.

However, a year later on July 4, 2013, the UNRA Procurement and Disposal Unit (PDU) returned to the contracts to resurrect the dead contract because money had been found for the project. The PPDA report notes clearly that at this point, it should have been clear to the UNRA Contracts Committee that the earlier bids had expired. Eutaw was no longer the bid winner.

But that did not stop the head of UNRA’s Procurement and Disposal Unit from writing to Eutaw on July 12, 2013, asking them to confirm interest in the contract and re-evaluate their bid. UNRA officials thereafter held negotiations with Eutaw on October 2, 2013, which brought the cost down to Shs 165 billion. The UNRA negotiating team included UNRA Director Projects James Okiror (who is now acting ED), the Katosi Road project Engineer, Luswata B. Buzibwa, Michael Ochola, from the UNRA planning department, legal counsel Marvin Baryaruha, and UNRA Contracts Committee Member Zaituni Nakonde. The contract was awarded to Eutaw on November 15, 2013.

On September 11, 2013, the UNRA Contract Committee had ordered the PDU to carry out due diligence on projects Eutaw claimed to have done to demonstrate their past experience. Did PDU do that? What did it find?

PPDA’s reactionary mandate

Such omissions confirm the sad reality that procurement deals go bad everywhere all the time because of incompetence. It happens in private businesses as much as it does in government departments.

Recall the near failure of the subsidised healthcare insurance project under the Patient Protection and Affordable Care Act (PPACA) aka Obamacare website, which started at a US$690 million budget, and closed at US$840 million.

Currently, the Indian Ministry of Defense is embroiled in a €556 million contract scandal involving a subsidiary of an Italian government company allegedly bribing officials to supply it 12 VVIP helicopters. In Germany, Defence ministry officials have recently been dismissed for spiralling project costs, delivery delays, failure to meet technical requirements, and lack of transparency.

A good starting point to end procurement incompetence in Uganda would be for the government to ensure that the PPDA exercises its mandate to enforce training of government officials in basic public procurement procedures, laws and technicalities, and loopholes. The does and don’ts need to be clear. Currently, the PPDA is a reactionary body, appearing on the scene after a complaint over a botched project.

The PPDA must also insist on professionalism on contract committees. The Katosi road bid was evaluated by a team of nine but it was the wrong team. It comprised engineers, local and international, and one procurement expert. It should have been the inverse: after all, awarding a contract is a procurement not engineering job.

Engaging professionals, hopefully, will ensure that procurement policy, process, and procedure are followed. The wasteful business of a slew of engineers overseeing every project, as if they were the ones going to construct it, must end. A man might know how to get a woman pregnant, but that does not make him the perfect midwife.

That is why, although the Eutaw contract was scrutinised by the UNRA Contracts Committee for over two months in November and December 2010, the wrong decisions were made. It is inconceivable that everyone involved was bribed. What about the firms that competed with Eutaw for the contract, some of them well-known names like Salini Construction; could they not have checked out and exposed Eutaw?

If incompetence it tackled, then public procurement in Uganda could come to resemble private sector procurement where, if something goes wrong, it is very clear who carries the pan.  Even politicians can beallowed to make genuine decision-making mistakes and be fired for that. But, unfortunately, that might not solve the political problems associated with big projects in Uganda.

The author is a journalist and holds an MBA in Management

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jwere@independent.co.ug