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The Trouble With Unchecked Fiscal Irresponsibility in Uganda

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The Trouble With Unchecked Fiscal Irresponsibility in Uganda
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  THE TROUBLE WITH UNCHECKED FISCAL IRRESPONSIBILITY IN UGANDA: IT IS TIME TO RETHINK PUBLIC PROCUREMENTAn Analysis by Rob! Ki!#n$aPa! n! a Ki!#n$a % Wasi& A$'o(a s Recent newspaper reports have drawn attention to some troubling publicprocurements in Uganda. The most staggering were the Mukono – Katosi roadproject and the Standard Gauge Railwa !roject SGR#. $  These projects have beenconcerning to the keen and alert members o% the public %or a number o% reasons.&irstl' there has never been a time when Ministers bicker in the press as much asthe have over these two projects. Secondl' despite the usual rhetoric on (ghtingcorruption' both Ministers whose names were a dail appearance in the press arestill in )abinet. *ne would have thought the would be too tarred to remain inpublic o+ce' and at least suspended to pave wa %or investigations. Thirdl' we livein a countr that once censured a Minister over ,--- litres o% %uel. ,  t is hard tobelieve that the Ministers responsible %or these works have gone unchecked.  The Mukono – Katosi road scandal is also worring because %rom a political level' itis the (rst time that so little concern has gone into a clear case o% %orger and %raud.Members o% !arliament used to love these sorts o% cases because the provided%odder %or constitutional petitions and like  pointed out above' censure motions#. This does not seem to be the case anmore. There is all but an admission o% the%orger o% insurance bonds and et no one is asking the nsurance Regulator/uthorit what the are doing about these %orged bonds. 0e will have to live withthe Ministers not %acing an reprimand. 1ut what about the construction companies involved in this scandal2 The )hinesecontinue to construct the road and all is well over there.  am et to hear which%unds are constructing that road and where the came %rom' i% the %unds that le%tthe U3R/ co4ers actuall did disappear. !erhaps the onl solace to be gotten %romthis scandal is that a %ew individuals that worked %or U3R/ will be investigated.  amdoubt%ul that an meaning%ul prosecution will ensue. 1ut  could be wrong. The SGR project is troubling enough on its own. !aul 1ushari5i has dealt with anumber o% (nancial aspects o% wh it is troubling.  will deal with onl a %ew more6uestions that arise. &irstl' the 78ecutive is determined to ensure that this project $  !erhaps the most compelling and brilliantl written article on the SGR !roject was written b !aul 1ushari5i see9 http9::shillingscents.blogspot.com:,-$;:$-:its<deja<vu<with<standard<gauge<railwa.html accessed on october ,  Kirunda Kivejinja was censured in $==> over ,--- litres o% %uel that belonged to Uganda Railwas )orporation. This was a%ter the ?im Muhwe5i censure %or %ailing to account %or his wealth. n the same period $==><$===# Sam Kutesa was also censured and Matthew Rukikaire resigned %rom the position o% State Minister once !arliament threatened to censurehim. See9 Rick Stapenhurs' 3iall ?ohnston and Richardo !eli55o 7ds# The Role of Parliament in Curbing Corruption 0orld 1ank nstitute @evelopment Studies' ,--A at P. 132  proceeds at whatever cost. 3ever mind that it going to be arguabl the moste8pensive in%rastructure project in the countrBs histor. There seems to be noabilit in !arliament to roll back this power o% the 78ecutive. This tells o% a moreunderling weakness that is seldom discussed9 !arliament has lost its position asthe watchdog that should keep the 78ecutive in line. nevitabl' the battle groundshi%ts to the judiciar. n her ruling in the case o% China Civil EngineeringConstruction Corporation v. The Attorney General iscellaneous Cause !1 of 2 1# the Conorable Dad ?ustice Ddia Mugambe held thus9E wish to observe be%ore  take leave o% this /pplication that while/nne8tures E/F and E1 Eto the MinisterBs /+davit in repldemonstrate that the contract %or the SGR project in Uganda standsgiven to the /pplicant' and )C7) with a view to %ast trackH theproject' the MinsterBs continued cudgeling regarding termination o% the /pplicants MoU with the government' pushing the /pplicant toseek redress in court' serves onl to dela the SGR !roject inUganda. t is not in tandem with the directive to prioriti5e %asttrackingH the SGR project' nor the overall public interest o% development o% the railwa in%rastructure in Uganda. 3 m humbleview' the Minister should check his intentions' put his countr (rstand come into line %or the %ast tracking o% the said project as apriorit.Fn a more concerned countr' people would respond to the learned judgeBs clarioncall %or the investigative arms o% government to check the conduct o% the Ministerand %or the Minister to either act appropriatel or resign. Ioci%erous opposition%orces elsewhere would savor this statement and use it as a basis %or demanding ane8planation or resignation because clearl the Minister was either part o% theproblem or the problem itsel%.   Secondl' one has to pa attention to the manner in which these projects are being(nanced. Uganda is entering bilateral arrangements with the )hinese governmentto (nance these projects %rom their 7JM 1ank. This is happening outside o% thenormal public procurement legal regime. Usuall' %or this to happen' the !ublic!rocurement and @isposal o% /ssets /uthorit would have to issue a waiver %or theuse o% public procurement methods in these procurements. *nce this waiver isgiven' then the projects can be awarded without the usual tender process' andideall the should be (ne. / reading o% the pleadings in the case o% $enry %yarimpa v. the Attorney General of &gan'a an' (inohy'ro Corporation )imite' Reference # of 2 13 at the 7ast /%rican)ourt o% ?ustice reveals that this is likel what happened in the Karuma Cdro powerproject. t will be recalled that a%ter allocating Karuma to Sinohdro' b instructiono% the !resident' /ago 3agak and simba projects were also allocated to )hinese  (rms. These projects will be constructed at whatever cost the )hinese indicated wasthe actual cost and Ugandan citi5ens will pa the cost over a ver long time. This calls %or the need to revisit three provisions in the )onstitution. Under /rticle= $#' !arliament is enjoined to make laws to ensure the good governance o% thiscountr. /rticle $$= L# and A# in essence re6uire the /ttorne General to approvean contracts whose value e8ceeds Uganda Shillings &i%t Million in which public%unds will be deploed. t is in light o% these provisions that one must view the !!@//ct. The /ct is intended %or oversight on public resources and as its motivesstipulate in !art I on the 1asic !rinciples o% !rocurement' ensure value %or mone'transparenc accountabilit' competition' econom and e+cienc' %airness' tomention but a %ew. To dispense with competitive bidding is to undermine the mostcentral tenets o% public procurement in the (rst place. n an event' this usuallmakes more sense %or the smaller projects than %or the larger ones. This countr isdoing things the other wa round. This is wrong. The third provision that is important to consider in these sorts o% circumstances is/rticle $L=. Under this /rticle' an debt obligation that Government intends tocreate must be tabled be%ore !arliament %or approval be%ore it attaches toGovernment. Cowever in cases where the Government is entering bilateralarrangements with another countr in this case !eopleBs Republic o% )hina# andsubse6uentl e8ecuting Memoranda o% Understanding and 7ngineering'!rocurement' )onstruction and &inancing /greements with companies to developthese projects' it is argued that Government is creating debt obligations that havenot been approved b !arliament. This o4ends the )onstitution. t must also beremembered that under /rticle $ o% the same )onstitution' all power belongs to thepeople who will repa these loans and it is onl (tting that the have oversight onthe process and that the get the best value %or their mone. The argument has been made that parliament itsel% is not immune to corruption andthe wa its )ommittees handle various matters sometimes leaves a lot to bedesired. Some have even accused members o% parliament o% corruption. 1ut thesolution is not to ignore !arliament. The solution is to address what seems to havegone wrong. t is argued that %or the above reasons' an amendment to the !!@//ct is imminent in order to dispense with the 78ecutive @irectorBs powers to consentto a direct procurement in such large projects that should attract internationalcompetitive bidding. /lso' it is important to create a sstem within which thetechnical and (nancial soundness o% a project can be tested rigorousl to ensurethat the countr is getting value %or mone %rom the best 6uali(ed entit.Kii5a 1esige has re%erred to these debts as odious.   0hile  do not 6uite agree withhis brilliantl written analsis o% the situation'  argue that the debts should not beignored because o% the amount o% (scal e8posure the have created %or Uganda. /s   http9::observer.ug:inde8.php2optionNcomOcontentPviewNarticlePidN;;LAQ/uganda<wont<pa<these<odious<chinese<debtsPtemidN=A   the econom gets tighter' with ta8 rates especiall the indirect kind# at theirhighest in Ugandan histor' Ugandans need to be reassured there is some otherplan to meet these debt obligations that goes beond increasing ta8es. *therwise'this seems like the per%ect set up o% what will soon become a much larger (scalproblem putting Uganda on a course o% de%aulting on its loan obligations.
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