Prime
Chinese firm questioned about MV Pamba profits
MV Pamba at Port Bell in Luzira, Kampala. PHOTO/JOSEPH KIGGUNDU
What you need to know:
- There are also contestations about the amount that the Chinese firm claims to have used to repair the vessel. Whereas an official of the firm, Mr Gege Moa, told attendees at the recommissioning of MV Pamba’s operations that repairs had cost at least $3.5m (about Shs12.8b), the Auditor General’s report said the firm had “incurred a verified amount of Shs10,618,736,676 to undertake the refurbishment.”
- Mango Tree Group chairperson Fan Shuchun did not respond to the query in writing, but sent Monitor a lengthy spreadsheet listing all the items that had been procured.
A Chinese firm has been operating and collecting billions of shillings from the operations of a government water cargo transport vessel for 19 months even without formal agreement.
Ms Mango Tree Uganda Limited has been running MV Pamba since last February when it was recommissioned to resume plying the Lake Victoria waters at the ports of Jinja, Kisumu and Mwanza. This was after a 16-year hiatus.
Sources within both Uganda Railways Corporation (URC) and the Works ministry say while the firm initially signed a memorandum of understanding (MoU) with the ministry, it did not materialise into a full management contract.
Mr Bageya Waiswa, the Works ministry permanent secretary, confirmed on Thursday that the firm has no contract to manage MV Pamba.
“Initially, we had an MoU with them granting them permission to refurbish the ship,” he said, adding that “when it came to how we could move to the level of agreement, there were some queries which came up.”
Mr Waiswa further revealed that the ministry is due to return to the Attorney General’s chambers for guidance.
The management and revenue sharing agreements would have spelt out the terms under which the Chinese firm would manage the vessel. They would also detail how revenue collections would be monitored and shared out by the parties while at the same time ensuring that the Chinese firm recouped what it had invested.
With URC and the Works ministry unable to tell how much the Chinese firm has collected across the last 19 months, the Attorney General in a report for the financial year ending June 30, 2022 pointed to the possibility of huge financial losses.
Mr Kiryowa Kiwanuka based this on account of failure by the government to formalise the processes of the relationship and also put in place mechanisms for monitoring revenue collection.
“Although the Marine Vessel (MV) Pamba operated during the year, there were no arrangements by URC in respect to monitoring of revenue collected by the operator of the vessel and also the revenue sharing terms which would allow both parties to mutually benefit as required in the agreement,” the report reads in part.
Projections
It was not possible to establish from Mango Tree Group, how much revenue it has collected. Mr Fan Shuchun, its chairperson, had by press time not responded to our queries. Last February, Works minister Gen Katumba Wamala revealed at the official recommissioning of MV Pamba that the vessel would bring in at least 21,000 tonnes of cargo per month.
It was not possible to establish what MV Pamba charges for every tonne of goods imported, but as of 2008, the MV Serengeti was charging $48 (Shs176,009) for every tonne of imports. If we are to go by the tonnage provided by the minister, the firm has been collecting at least Shs3.6b per a month. That comes down to Shs70.2 billion over the last 19 months it has been running the vessel.
Controversy
MV Pamba was in 2005 involved in a freak collision with the wagon ferry MV Kaawa, which resulted in it being docked in Port Bell for more than a decade.
On May 18, 2020, then junior Works minister, Ms Joy Kabatsi, signed an MoU with Mango Tree (U) Ltd. It was intended to rehabilitate and upgrade MV Pamba under a public-private partnership arrangement, but the MoU ran into trouble with both URC and the Attorney General.
URC reportedly declined to own the MoU.
“That whole process was handled by the ministry. They forced the then managing director, Mr Stanley Ssendegeya, to witness that MoU, but URC has never owned that agreement,” a URC source told Monitor.
The acting Managing Director of URC, Mr David Bulega Musoke, declined to discuss matters around the vessel. He said he was attending a meeting and would call back, but he had by press time not done so.
AG throws out MoU
According to sources at both URC and the Works ministry, the MoU ran in trouble almost immediately as the Attorney General dismissed it as “an illegality.”
“The Attorney General said it was void. From the get go, he found some illegalities. He questioned how it was procured. Based on that, he said that it was an illegality. He declined to endorse it on grounds that he could not cement an illegality,” our source revealed.
Mr Kiwanuka was unavailable for a comment on the matter, but the latest report from his office also raised questions about the manner in which Ms Mango Tree was procured to refurbish and operate the vessel.
“I, however, noted that there was no procurement process followed in identifying the company,” the Auditor General wrote in this latest report.
AG’s advice
According to our sources, the Attorney General advised URC to validate the MoU by going through the normal procurement process.
“Because it (MoU) was done by [the] Ministry of Works, [the Attorney General] advised that URC should procure the services of Mango Tree directly, but also in there, on that advice there was a disclaimer that we should go through normal procurement processes. That is where we are,” a source at URC said.
Mr Waiswa told Monitor that the ministry is due to return to the Attorney General’s chambers for additional advice.
“We sought the Attorney General’s guidance and he guided us that we can procure them and once that procurement is done it can lead into making of an agreement.
