OAG Report put Uganda National Airlines Company Ltd on blast

The Uganda National Airlines Company Limited (Ltd.) was registered in March 2019, but incorporated on the 30th January 2018. That was done with shares both in the Ministry of Works and Transport (MoWT) and Ministry of Finance and Planning & Economic Development (MoFPED). That happened after scrutiny of it was all operating and who was really owning the company.

With that in mind, the statements or quotes from the Auditor General Reports of February 2021 isn’t helping the company either.

As it states this:

Whereas Government had invested a total of UGX 934,840,887,000 and reflected it as an investment in the Treasury records at Ministry of Finance, only an amount of UGX200,000,000 was shown as Share Capital in the company statements, the rest of the amount was shown as Share Application Funds. The processes for recognition of the Government investment in the company have not been undertaken to enable appropriate treatment and reporting in the company’s books of account” (Office of the Auditor General, February 2021).

This here proves the problematic aspect of ownership and hows it still not operative. The Company is still not addressing the “owners” and what sort of role the government have in it. Still, the government is providing funds for it and investing in it. But… we cannot know who is owning it and what percentages the state has. That is obnoxious… and outrageous at this point.

It doesn’t help that this is the current results of the company:

The company was unable to realize its planned revenue, yet the expenditure on operations was way above projected costs. The company only realized US$ 9,985,495 (10.8%) of the project revenue of US$92,863,811. On the other hand, the company incurred expenses that were beyond the planned costs and its actual revenue. For example; the company spent US$29,220,933 on direct costs, US$3,606,965 on indirect costs. As a consequence, the company incurred a net loss of US$27,477,513 in the year” (Office of the Auditor General, February 2021).

The company projections was clearly out of whack, but it also came in a year of the pandemic. So, the help of tourist and tourism to gain passengers went in the wind. However, the company is a pit-fall of money loss and wastage of public funds. They have spent money they don’t have and earned mediocre or nearly nothing while having huge bills. That is not a good way of running business.

It is also striking about who will pick up the bill and who will write-down the losses of this company. As the government involvement and unsure owner structure should make people question whose role is it to pay for the costs, which the company have created last year.

The Auditor General quotes isn’t strengthening the company nor its projections. Only that its a money pit and someone has to cover it. It has a higher burn-rate of cash than what it earns. That is a company running towards bankruptcy. One way or another. The government can save it again. It can save it another time too. However, how much value does it add and what services is the public gaining from such a company?

That is for someone else to answer, but there is no proof of now. That the state or the Republic needs this. It is a vanity project and flying high without money for gas (jet-fuel). Peace.

IGG Report says the Office of the President had two “papal” cars in their parking-lot since 2015…

We know that President Yoweri Kaguta Museveni is obsessed with cars or vehicles. That is why the most important gift to the government during the lockdowns in 2020 was just that. He just wanted cars and that was the solution to everything.

I just started to go through Inspectorate General of Government Report of February 2021. The first thing that caught my eye was this simple story. It is just showing how much control the State House or Office of the President has. As they can control minor things and hold it in their possession for years. This is maybe just two expensive cars for one visit. However, if they can do that to such things. What can the same authorities do with bigger and even more expensive things?

Here is the paragraph that caught my eye:

The Office of the President entered into MOU with Ministry of Works and Transport for purchase of two vehicles for use by His Holiness the Pope during his visit to Uganda in November 2015 and provided UGX. 322,200,000 for executing the MOU. MOWT purchase a black new Kia Soul 5 door Hatchback UG2519C and a new Mitsubishi Pick Up UG2520C. The two vehicles were handed over to the President’s Office for use by MOWT after the Pope’s visit. They were found parked at the Office of the President parking yard at the time of this investigation” (IGG – ‘BI- ANNUAL INSPECTORATE OF GOVERNMENT PERFORMANCE REPORT TO PARLIAMENT (JANUARY – JUNE 2020)’ P:7, February 2021).

That means the Office of the President have kept these cars since November 2015 and meaning the vehicles was still in the possession in the time of June 2020. As this report is the investigations made between January to June 2020, but published in February 2021. Therefore, the vehicles might be gone by now, but that is only matter of trust that this investigation made a difference. However, there should be a check-up on that. Because, who knows who has been using these two vehicles since the Pope Francis left Uganda?

Just imagine cars destined to be used by the Ministry of Works and Transport (MoWT) have been stationed at the wrong place for close to 5 years. They were actually parked outside the Office of the President during the investigation.

The was even questions about these cars back in 2018: “Members of Parliament’s Public Accounts Committee have questioned officials in the Office of the President over the whereabouts of two cars used by Pope Francis when he visited Uganda in 2015” (NTV Uganda, 19.10.2018).

So now in February 2021 we know where they are, unless the Office of the President have actually given them back to MoWT where they were supposed to be. Nevertheless, that shows the state of affairs and how they care about expenditure of the state. When cars can just be lost for years and be on a parking-lot. If not used by the wrong authority for years. We don’t know that, but these cars was new.

That we know, because the Daily Monitor reported this in December 2015: “Joseph Ssemuwemba is the Chief Executive Officer of The Motorcenter East Africa Ltd. I found him in his office located on Plot 16 Old Portbell Road attending to his daily work. He was happy to share his experience of securing the opportunity to supply the Papal vehicle, and also the pressure that comes with such honour. “We know the Pope prefers modest transport and we have a history of the Pope having travelled in a Kia Soul while in South Korea and the interesting part here, is that this was his personal choice in Seoul, It wasn’t about government availing him any transport, it was about “of all these cars on this list what car would you like to use?” and his pick was the boxy stylish Kia Soul,” Ssemuwemba says” (Daily Monitor – ‘Pope Francis’ little black car’ 17.12.2015).

So, this isn’t a big whoop or a tragic tale, but is a story of misused fortunes and wasted funds on two cars. Where the resources are wasted and used for grandeur for a visit, but is never getting where they are intended. We don’t know what the MoWT was intending to use these cars for. However, they was supposed to be sitting in a parking-lot for all these years. Peace.

Opinion: A never ending story called the Northern Bypass…

This is becoming a never ending story. Where the state, all the various ministries, state owned organizations and whoever gotten the tender has been able to finish the project of 21 kilometres or 23 kilometres. Since on that one this project even differs.

What we do know is that this have been in the courts over battle over payment for land. It has been postponed and stopped, because the company doing the work has been shoddy. There been plenty of controversy and not all good news. That is why these kilometres has taken so long to build and still isn’t finished.

It is really amazing how this continues and it seems that this will be prolonged even longer. Because, we know what season its getting into. Election season and then all sorts of budgets and campaigns whacks out everything else. Even if this one is now scheduled to be done by 2021. But we know how flexible the end-dates are. So don’t be confused if it is still unfinished in 2023 or 2025. Because this project that was launched in 2004 seems to be alive and kicking a little bit longer.

New Vision 2008:

THE public is still awaiting the opening of the 21km Kampala Northern Bypass. The project was launched on May 20, 2004 and was to last 30 months, ending on November 19, 2006. It was later extended by 10 months to September 2007. This was later to change to March this year, which deadline was also not met. This delay is causing public concern. Apart from reports of extortion by the guards who allow motorists to use the road illegally, accidents are beginning to happen” (Chris Kiwawulo – ‘Will the Northern Bypass ever be completed?’ 25.04.2008).

JICA Report in 2010:

The recent cooperation of the EU for the GKMA urban road sector is as follows:

Kampala Northern Bypass: €47.5 million, Construction of 21 km bypass to relieve congestion in Kampala City (completed and opened to the public in October 2009).

Technical Assistance to RAFU/UNRA: €2.0 million (on-going)” (JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) – ‘THE STUDY ON GREATER KAMPALA ROAD NETWORK AND TRANSPORT IMPROVEMENT IN THE REPUBLIC OF UGANDA –

FINAL REPORT EXECUTIVE SUMMARY – NOVEMBER 2010).

CSBAG Paper 2018:

For example,the works on Kampala Northern Bypass registered a cumulative progress by end of June 2017 of 46.7% against the programmed 97.95%. The elapsed time was 98.81% based on the Original Program of Works. The major issues affecting progress is delayed site access, Design issues and Relocation of services” (…) “ Kampala Northern Bypass highlighted as a project to be concluded in FY 2018/19. This is not feasible as none of the six roundabouts which have sizable infrastructural and structural undertakings has been commenced on” (CSBAG – ‘CSO POSITION PAPER ON THE WORKS AND TRANSPORTSECTOR BUDGET FY2018/19’ 12.04.2018).

Article October 2019:

The upgrade of the Kampala Northern by pass into a four-lane high way started back in 2014 with the completion date set for November 2018. However, the date has been pushed to 2021 due to a couple of challenges hindering the project which include; changes on the original design and compensation of the affected people. Mr. Allan Ssempebwa, UNRA’s media manager last month said that the works stood at 60% and mentioned that the interchanges at Sentema and Namungoona will be handed over to the government by the end of this year” (Patrick Mulyungi – ‘Uganda to launch three new footbridges on Kampala Northern Bypass’ 02.10.2019).

So, we are seeing the stages of building is either not done or postponed. This is all done by various of reasons. The Kampala Northern Bypass are really a long prolonged project that seemingly seems never to end. Even the government own paper wondered about that 11 years ago and we have to wait another two years. But knowing how this ones goes. Don’t expect the state to follow its timeline.

What I wondering about, how proud is the European Union for supporting the project and the longevity of this. There should be questions from the ones who has funded it and why it takes so long. Since, they are accepting it and surely gotten the explanations. Because, we who follows haven’t really.

There are lame duck excuses with the land and the state paying the ones living there. Where the state has to pay for the hurt of building a road on private land. If they planned this and commenced this in 2004. By the time of 2019, the state should have been able to settle this and know the route of the road. However, they are showing lack of due diligence and putting the work in.

Because, the Northern Bypass should have been done by now. That isn’t rocket-science. This is made like this since people are eating of this project. Not like it should take this long to finish a 21/23 kilometres long tarmacked road around Kampala. But apparently it does. Peace.

President Museveni letter to Hon. Monica Azuba Ntege – Ruling out external or internal borrowing for development infrastructure (18.09.2019)

Another look into the Oil-Road Cost: “Package 2” Hoima-Butiaba-Wanseko Road!

In the newest report of Oil Roads, which is expected to borrow funds for. The China Exim Bank is supposed to be provider of 85 % of the cost of the operation and building of the roads in these projects. I will only look into one of them, as I have previously looked at this significant one.

This is the Hoima-Butiaba-Wasenko Road. A project that was supposed to start in 2015 and was clocking in funds from the state budgets in 2017. Back in 2015, the road was estimated to cost $126m USD. Today, with the recent report, the same road is costing $179,538m USD. That is jump of nearly $50m in a five years time. In addition, of these bloated funds, 85 % of it will be loaned from China and the rest 15% covered by the Government of Uganda (GoU).

In 2017, this project was designated the China Communications Construction Company (CCCC), which signed a deal in January 2016. However, by the time of the report 2019, it is another Chinese Company who has the contract. This is Chongqing International Construction Corporation (CRC) Ltd. With the recent contract, the loans are clearly getting direct back to the Chinese, as their corporations are the ones with the contracts to build. A clever way of borrowing and then getting returns.

With this mind, we can see the changes, see over the years how the price has changed. If Members of Parliament was afraid of the price per kilometre in the past. They should be now. As the changes of price on the same project has changed significantly. There is no doubt, that the Chinese government are getting added loans on each of the packages in this deal. As this is just one of the roads in question.

This is 111km is now costing 659,921,964,460.17UGX in Ugandan terms or 659bn shillings and that equals to about 5,9bn shillings. Therefore, the prices has sky-rocketed and the price per kilometre is abnormal and extremely costly. The overpriced asphalt and the consultation is in absurd levels. The previosly estimated price for this road was about 444bn shillings. Therefore, we can see rising price between the years in both currencies. About 200bn shillings growth in 5 years. 

To many cooks and too few ingredients. They are boiling soup on nails on this one. Wonder how this will end. As I felt in 2017, that the pricing of this particular road was a bit too much, but now they have just escalated it.

We can wonder whose eating, but someone is. We just don’t know who, because there been designated funds to build this one in the past and it has still not commenced. Surely, this road will be built, but at what point. However, with the added loans, the pressure should be on. Also, to secure the oil so it makes financial sense too. That the added value is there. It got to be. Because this project is over the top. This is the real OTT service, paid for by the Chinese and the tab is all taken by the Ugandans. Peace.

Report to the Media on Status of the Revival of Uganda Airlines (10.04.2019)

Uganda National Airlines: Let’s Get It Started!

“Everybody (yeah), everybody (yeah), just get into it (yeah), get stupid (come on)

Get it started, (come on) get it started (yeah), get it started”The Black Eyed Peas, ‘Let’s Get It Started’ 2003

Well, this week has been revealing in concerning the supposed newly minted airlines in Uganda. Where the state incorporated Uganda National Airlines Limited in January 2018. However, the supposed registration and certification happen this week. The documentation now shows, that the Ministers are owners of the Airline and it’s registered on the 26th March 2019 and certified on the 27th March 2019.

Alas, the state has already spent close to $30m USD on it, as they have procured several of planes for the operations and the first are supposed to arrive on the 31st March 2019. Therefore, the whole ownership and usage of state funds comes into question. As the Report to Parliament confessed that the state and the two ministries only owned 2 shares out of 2 million, until yesterday, when suddenly the Ministers of Works and Transport and Ministry of Finance, Economic Planning and Development suddenly had 1 million shares each, a 50 50 split.

This all seems suspicious and within reason. Because, it has been done in wrong order and ensured to not follow procedures or anything of that fashion. As the State for the second time are infringed to deliver new funds to State Owned Enterprise, even as the ghosts of owners and registration suddenly appears. You can wonder, if they would have done this, if it didn’t get public scrutiny. Because, the scribbling document of ownership only appeared, when the Observer and other media houses questioned it.

This shows that there was something lurking and weird about it all. Where the insiders and the ones operating it, maybe, had shell-companies and significant portfolios, where they could earn the profits of this state owned enterprise. That would not be shocking, even if all the investments, all the funding and procurement have happen directly from the Ministries and with the blessings from above high.

With all of this in the open. It seriously question the operation, the ownership and who really controls the company as whole, because its hard to believe the two ministries does it. As it was incorporated in January 2018, but was registered shareholders yesterday, a year and two months after. Which is suspicious at best, if not revealing of how the state operates in this matters.

We can play along and act a fool, but that doesn’t change the remaining questions, the lack of trust and also the lack of protocol. As the state have toyed around spent fortunes on establishing, procuring and investing in the company, while it has been a ghost and non existing entity, which could be someone’s secret bank-account.

Certainly, this is not over and will leave a giant paper-trail that somehow will be resolved in the State House and by whoever the benefactor whose project this is. Because, that is the rule of the day and how these things are under this Presidency. It is common knowledge, but never really said or revealed, unless, family members of the President owns it or runs it. Peace.

URSB: Uganda National Airlines Company Ltd Certified today (27.03.2019)

A fresh report states the sketchy things about the ownership of the Uganda National Airlines Company Limited!

Hold fast to dreams,

For if dreams die

Life is a broken-winged bird,

That cannot fly.”Langston Hughes

Today, there was tabled a report on the 26th March 2019, reported titled: “Report on the Budget Committee on the Supplementary Expenditure 2 for FY 2018/19” especially the vote – “Vote 016 MOWT – USHS 280.046 For Financing Costs of Uganda National Airline”. In this report there are vital information coming up. That I will address, but also show, as it proves how the state plans to invest the taxpayers money on the airline, but also what sort of finance it has already.

The government clearly have already invested money into it, but doesn’t have ownership in it. That is what the report says. It shows intent of investing more in it, but not actual ownership of it. However, not claiming it, which is weird, but that is what they do. They are buying planes for it and investing in it, but not owning it. That is what they are initially saying. This is really rare and weird.

Here is the quotes from the report that matters in my sense:

The Government of Uganda has injected approximately 29.9 USD million into this company but has only 2 shares allocated to it”

Ministry of Works and Transport has requested for on additional Ushs 280,046,77 6,933 to cater for investment costs of the Uganda National Airline”

The Ministry of Finance, Planning ond Economic Development indicated that it was to use proceeds from MTN licence amounting to USD 60 million (approximately UGX 222 billion) to portly finance Uganda National Airlines”

The shore capital of Uganda National Airlines Company Limited is 200 million divided into 2 million shores of UGX 100. Of the 2 million shares only 2 shares worth UGX 200 to Minister of Works and Transport as well as Ministry of Finance, Planning and Economic Development. This makes both ministries to be minority shareholders holding only 0.0001% of the shores. At the moment the owners of the 99.97 shares are unknown. The owners will only be determined when the Directors decide to allocate the shares. It was asserted that the minority shares will be floated to the public. However contention arose as to whether the minority shareholders can float what they do not own. lt was however asserted that this move was undertaken to limit the liability of government. Hence a concern pertaining intension of government to establish o company that it already roles 10 be huge liability from the onset”

As you see, the $30m been invested in the Airline already. The Government and Ministry of Works and Transport, that they need more funds. Also, telling their lack of the shares in the company, while also planning to use licencing funds from MTN to cover the spending on the Company. Which later, in the Report states they will not, but I added to prove how the state spend the revenue it is getting.

The Uganda National Airlines is clearly not well-managed or well prepared, as it is a pile of expenditure, but not allocated what it needed. Since, the state is in need of more after spending millions already. As the first planes are coming in the coming week. Therefore, the National Resistance Movement and the ones behind it is clearly playing games.

They are spending public funds on a possible Uganda National Airline Company Limited, when they arrive. Since the report turned public the GCIC have claimed this in response to the report delivered. Which clearly shows the significant stature of the ownership in question.

They are claiming this:

CLARIFICATION: There has been misleading information regarding shareholding of Uganda Airlines Company LTD. The company was incorporated on 30th Jan, 2018. The company has 2 million shares. Minister for Works was allotted 1 million shares & Minister for Finance, 1 million shares. 3/3: In July, 2018, the management of the company allotted the entire shares of the company as follows:

1. Minister of Works & Transport (represented by Hon. Monica Azuba Ntenge)- 1 million shares.

2. Minister of Finance (represented by Hon. Matia Kasaija) – 1 million shares” (GCIC, 27.03.2019).

This is countering the facts in the report, that even before the ink is dry. Before the time and test of the knowledge given by the Ministry and the Government itself. So why does the GCIC have other indications and facts, than the report. You can wonder who gave them and where it is from? Why wasn’t this given as facts to Parliament and signed of by the Members of Parliament then?

Well, this will be played out in real-time. This is not a fan-fiction, West-Wing drama, no this is real live events of the operations and investing in the resurfaced Airline Company. This shouldn’t be that tricky or played out like this, but it is because the state and the ones involved in it. Because, there must be some loose ends, which is not yet caught. It will eventually. Peace.

Prime Minister Ruhakana Rugunda letter to Parliamentary Committee on Presidential Affairs – “Meeting With the Prime Minister on the Bulambuli Resettlement Project” (05.12.2018)