By Patrick Jaramogi
There was loss of public funds in the implementation of a framework contract Ref. OPM/SPLS/2008-2009/00197 for the supply of interlocking stabilized block making machines and related services to the office of the Prime Minister by Hydraform International (PTY) Ltd, the Inspector General of Government (IGG) Irene Mulyagonja Kakooza has revealed in a damning report that the Investigator has obtained.
The report that was released on Thursday, brings to an end a two year investigation following a whistle-blower’s tip off that there was no value for money under the Framework contract OPM/SPLS/2008-2009/00197 to supply, deliver, and maintenance of Hydraform Machines signed between the Office of the Prime Minister and a South African based Hydraform Company International (PTY) for 18 months.
Background to the Investigations
On 21st December 2007, President Museveni in a letter to the Chairman of Hydraform Group, Mr. John H.M Carter recommended direct government intervention in procurement of Hydraform machines for the army. Another area recommended by the president was to ask some of the local volunteer groups that had worked with the UPDF in Teso, to form associations so that government would buy machines for them to engage in income generating activities.
The president in his communication pointed out that government both central and local was not supposed to buy, own and use Hydraform machines for its civil construction works but contracts out the provision of such services to private construction firms through a competitive tendering process.
On 26th November 2009, a framework contract procurement Ref. OPM/SPLS/2008-2009/00197 was signed between the Office of the Prime Minister and Hydraform International (PTY). This framework contract was for the supply, delivery, installation and commissioning of a minimum of 50 Hydraform M7 twin block making machines per year and related support services for 18 months
Unearthing the rot
The Inspector General of Government (IGG) noted that during the construction of the 54 houses for the Acholi traditional leaders, Garvin Armstrong the technical manager Hydraform International identified issues of shoddy work and poor workmanship, but even when poor workmanship and poor management was reported, the Office of the Prime Minister under Pius Bigirimaana as the then Permanent secretary proceeded to renew the contract without first clearing the mistakes.
The IGG listed a memo date 12th July 2012 written by the then under secretary OPM Flavia Waduwa to Bigirimaana (Permanent secretary) requesting to approve the extension of the framework contract which in addition to the poor management had long expired in May 2011. Following Waduwa’s request, the PDU submitted a request for approval on August 23rd 2012 which was granted following a signing of a contract on 25th September 2012 for a period of 24 months.
The IGG observed that as a result of this renewed contract, in March 2013, Pius Bigirimaana, the then PS, wrote to Hydraform International (PTY) assigning them the contract for construction of 50 low cost housing units and 25 VIP latrines in Kiryandongo, to cater for the displaced people from the Bududa landslides.
When quizzed by the IGG why he continued with the contract even long after it had expired, Bigirimaana said the contract was discussed and approved by the contracts’ committee of the office of the Prime Minister. He noted in his submission that the urgent issues such as the relocation of the Bagisu people to Kiryandongo couldn’t wait lengthy procedures. He submitted that as a Permanent Secretary, his role was to seek legal advice from the Chief Legal Advisor to government (Solicitor) which cleared his decision.
Mulyagonja noted that despite the fact that the framework contract was executed on 25th September 2012, no work commenced until March 2015. The officials from OPM and Hydraform International engaged in series of meetings and correspondences to sort out payment issues and amendments of bills of quantities (BOQ).
On 13th January 2014, a technical report which was concluded in November 2013, and submitted to the PS Office of the Prime Minister recommended that the contract for construction be separated from supply of machines. The experts recommended that local firms with experience in technology be given the tender to do the construction works.
Government lost money
The IGG observed that between October 2007 and June 2015, Hydraform International supplied a total of 139 Hydraform machines each costing USD 37,266 totalling (UGX 97m) to USD5,179,974 (UGX13.5billion at the exchange rate of 2600 per dollar) This amount excludes costs of accessories, clearing charges and cost of other machines that have been distributed in the PRDP districts.
Findings
Out of the 139 machines distributed from OPM to various beneficiaries, only 23 machines had their serial numbers recorded on the delivery notes. The IGG noted in its findings that this makes it difficult to identify the machines distributed to the beneficiaries by OPM, from machines procured by individuals on open market.
The new Permanent Secretary OPM Christine Guwatudde confirmed that indeed she doesn’t have records for the machines purchased. The IGG went a step further to ascertain the status of the 23 machines and found that only 4 out of the 23 were in use. The rest have never been put to use. Others lack major parts like engines, mortars, and had their tyres deflated. The machines were found in Panyandoli refugee settlement camp in Kiryandongo, Panyandoli police station, Gulu District headquarters, Office of the Prime Minister Gulu, and at the Northern Uganda Youth Development Center (NUYDC) in Gulu.
In Kampala at the OPM stores located along Old Port Bell road a total of 13 new Hydraform machines were laying idle not yet distributed.
Recommendations
The IGG noted that the Framework contract 2012 and execution of addendum No.2 of 2012 contract were done after the contract periods had elapsed against the principles of the law of contract. “Therefore these contracts are null and void and should be terminated,” She noted that the awarding of the tenders for the Kiryandongo construction works was not done under the required competitive bidding and ordered that all future contracts be advertised.
“The Hydraform machines supplied to OPM by Hydraform International (PTY) Ltd have not been maintained, serviced or repaired as required by the framework contract. Therefore the supply of these machines by Hydraform should be stopped because there is value for money realised by government,” said the IGG.
The IGG also recommended that the framework contract No. OPM/SUPLS/2008-2009/000197 between OPM and Hydraform International (PTY) Ltd is terminated with immediate effect.