A Shs32 billion payment the Uganda Investment Authority (UIA) was due to make to a contractor in Namanve Industrial Park was wrongly contested by Minister Evelyn Anite, the Attorney General has said.
AG Kiryowa Kiwanuka, on October 10, wrote back to Investment Minister Anite, sharing the results of his verification exercise, which confirmed that UIA and its Director General, Robert Mukiza, had not inflated any costs to the contractor.
Minister Anite fell out with Mr Mukiza during dramatic meetings at State House before Museveni, leading to heated exchanges between the minister and the agency head she supervises.
There were kneelings, tears, and ugly accusations that spilled over to social media between June and July, with Ms Anite stating that Mr Mukiza was due to cause the taxpayer a Euro 8 million (Shs32 billion) loss and other damages.
"Thank you, Mr President, for saving Ugandans a loss of £8m through UIA and for ensuring that the Shs546 million honoraria of Robert Mukiza and UIA staff will be recovered," Minister Anite posted on X (formerly known as Twitter) on June 20, after the explosive meeting with President Museveni.
The contested contract is for the development of infrastructure at Kampala Industrial and Business Park in Namanve.
The engineering, procurement, and construction contract between UIA and M/S Lagan Dott Namanve Ltd was signed on September 24, 2018.
Minister Anite, on June 14, had asked the Attorney General, as the chief legal advisor to the government, to review the payment to Lagan Dott Namanve Ltd. The minister specifically asked that the variations in prices and related documents be scrutinized.
However, AG Kiryowa Kiwanuka said the contract was signed under the FIDIC Silver Book.
In 1999, FIDIC (International Federation of Consulting Engineers) published a new contract, the Conditions of Contract for EPC Turnkey Projects, more commonly known as "The Silver Book."
The Silver Book sets out the circumstances in which a FIDIC contract should be used and the philosophy behind the balancing of risks, such as those leading to variations in payments.
He guided that the general conditions of the contract on adjustments for Changes in Cost provided that, "Provisions for adjustments may be required if it would be unreasonable for the contractor to bear the risk of escalating costs due to inflation."
He said that, based on the FIDIC Conditions of Contract for Plant and Design-Build, the variations were appropriate.
The AG did not specify the variation figures but said amendments to the contract covered the weightings, source of indices, and thresholds [from Uganda Bureau of Statistics] that would be applicable in computing any price adjustment.
"The Contractor’s IPC No. 22, dated February 27, 2024, reflecting the contractor’s assessment for cumulative payment details, including price adjustment amounting to Euros 8,036,433.56, is based on the condition that 'If the contract price is to be adjusted for rises or falls in the cost of labor, goods, and other inputs to the works, the adjustments shall be calculated in accordance with the provisions in the Particular Conditions,'" Kiwanuka said.
The AG also said that clause 3.5, which was the basis for halting the satisfaction of the payment certificate in issue, was not relevant to the claim, "as the same is not pursuant to variation in scope."
"This, therefore, is to advise that the claim giving rise to IPC [Interim Payment Certificate] No. 22 is properly founded on the provisions of the contract, and hence, should be paid in accordance with the said provisions," the AG guided.
The Attorney General's legal guidance brings an end to the unfortunate events in the investment sector leadership but also leaves Minister Anite's accusations to the President looking like ones based on intrigue.
Following a fallout over the visit of an investor, Minister Anite accused UIA top officials of paying themselves Shs545 million in a "service award."
The payment was deemed legal from the supervision of the Kampala Industrial Park Development (KIPD) project.
Yet, before the President, Minister Anite accused Mr Mukiza of abuse of office and corruption at the expense of the taxpayer.
For hours after the meeting, she took to social media with "war drums." In one of the comments, she wrote: "They are now using marriage connections to cover up their corruption, but they will not win."
Mukiza told the President that UIA terminated the consultancy contract with the Owner’s Engineer for the supervision of the EPC Contract for the development of infrastructure (build and design) at Kampala Industrial and Business Park in Namanve (KIBP) on August 29, 2022, leaving a vacuum.
The UIA Director General also accused the minister of lying, saying that she had personally met with the UK High Commissioner to Uganda, who had allegedly directed that the money due to M/S Lagan Dott be refunded.
“I find that the story of your meeting with the British High Commissioner to discuss the day-to-day management of the Namanve project not adding up, inaccurate, false, and misleading,” Mr Mukiza protested in one letter in July, although he went ahead to say he had forgiven the minister as requested by the President.
Last week, the UIA Board, led by Morrison Rwakakamba, completed their contract. As the agency, which is tasked with promoting investment in the country, looks to a new board, it is expected that the now-settled allegations of corruption against the Director-General should steady the ship and restore confidence in its operations.
