Monday, July 31, 2017

SGS bribed govt officials with $2M to win #Uganda car inspection contract @SGS_SA

By Andrew Karamagi
As you are probably aware, my colleagues (Farouk Minawa and Mugambwa Robert) and I raised red flags in March this year regarding mandatory vehicle inspection by SGS. Our contentions were around three salient issues:
a) Exclusion of relevant public institutions such as the Uganda Police Inspector of Vehicles from the inspection process;
b) Incoherent public policy wherein we noted that the line Ministry, Uganda National Roads Authority, Uganda Revenue Authority, the National Roads Safety Council and Uganda National Bureau of Standards are operating at different wave-lengths thereby resulting into policy discord, notably in the areas of pre-import inspection and verification, taxation and related levies;
c) Misuse of public office where we raised concerns about the anomalies pertaining to the irregular award of the contract and the fact that we had and still do have serious reservations about the integrity of the procurement process or lack thereof.
Over the past four months, we have followed this matter closely and have established more damning information which reveals the impropriety of this mandatory vehicle inspection.
Upon the initial award of this contract by the Ministry of Works and Transport to SGS in 2009, one of the companies that bid for the same run to court to contest the award. This litigation resulted into the halting of the contract which was only given a go-ahead in 2015, six years later.
It begs the question: why weren’t the terms of the awarded contract renegotiated to reflect the change of circumstances such as the time-lag?
We have also learnt that the Contracts Management Committee at the Ministry of Works and Transport which should, by now have ceded responsibility to a Contracts Supervision Committee is still presiding over the execution of the contract. Why, up to this day, is there no supervising entity of the SGS Motor Vehicle Inspection Contract? Is SGS so good that they can supervise themselves? Additionally, what is the basis of the disparate charges they are placing on the different vehicle types?
We have learned that motorcycles are charged forty five thousand shillings; private vehicles are charged one hundred and ten thousand shillings; matatus, commonly known as taxis, are charged one hundred and fifty thousand shillings while buses pay a measly eight hundred shillings for inspection! Who is behind this anomaly?
Ugandans will also be interested to learn that from our findings, one gentleman, Mr. Ronald Amanyire, appears to be the person about whom this contract revolves. Mr. Amanyire is a Member of the Contracts Management Committee, a public institution, but at the same time, is the de facto spokesperson for SGS. He is also an official of the National Road Safety Council. And he also works with the Transport Licensing Board.
How is it possible that we have not heard the official spokespersons of the Ministry of Works pronouncing themselves on this matter? Since when do junior public staffers like Mr. Amanyire speak on behalf of a private multinational corporation?
In what capacity did Mr. Ronald Amanyire travel to Gauteng, South Africa, to inspect and view Mobile Inspection and Law Enforcement Centres and engage in discussions regarding any changes to the contractual arrangement? Was the Ministry aware of this?
Where are the Spokespersons, the Permanent Secretary, the Director and/or any Commissioner of the Ministry of Works on this matter? This is at best a classic case of conflict of interest and at worst, a case of collusion between a public official and a private multinational corporation.
Our fourth point of concern regards the juicy question of the two million dollars contract performance security which was lodged by SGS with Government but was less than two weeks ago returned to SGS and parts of it shared with senior Ministry of Works and Transport officials. What this means is that SGS has nothing to lose and conduct itself as it pleases since it has no performance security lodged with government. Ugandans are on their own!
For the benefit of readers, a performance security is an agreement by a contractor to lodge a given amount of money with government so that if a contractor defaults on the agreed terms, government has the option of taking the performance security so as to avoid making losses.
SGS is one year behind schedule. SGS has not completed the work of building inspection stations. SGS has no vehicle standards that it is using to inspect vehicles. SGS has no accreditation from international carmakers to inspect vehicles. Under these circumstances, how can any sane person return a two million dollar performance security to a contractor who has reneged on vital sections of a contract?!
I am also aware of the fact that a formal complaint was lodged to the Inspectorate of Government in this regard but no action is forthcoming from the government ombudsman.
The above information I have given is complex and highly technical and so I will sum up our contentions into five simple questions so as to help the general public appreciate the issues at hand:
i) Why was there no renegotiation of the terms of the contract following a six year court battle which had halted the contract?
ii) Why is there no supervising entity from government overseeing the performance of the contract?
iii) In what capacity is Mr. Ronald Amanyire, a junior public official addressing the media on behalf of SGS, a private multinational company?
iv) Who authorized and on what basis was the return of the two million dollar performance security returned to SGS two weeks ago yet SGS is one year behind schedule and has not completed construction of the vehicle inspection stations?
v) Why is a senior citizen who is as honourable, decent and distinguished as the Minister of Works and Transport as well as the Ministry of Works and Transport allowing itself to be held at ransom by a clique of individuals in cahoots with a multinational corporation?
These and more are the issues we shall be tabling before the Infrastructure Committee of Parliament among other relevant institutions.
If no action is taken on this broad daylight thuggery, I will announce further steps.

Mr. Andrew Karamagi is a lawyer based in Uganda.  He can be reached at

SGS Automotive Uganda Ltd

SGS Automotive Uganda will start off Inspection operations at the SGS Kawanda Station on 28th Nov, 2016. Inspections will later on be rolled out to other stations.

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