The Inspectorate of Government (IGG) has directed the Ministry of Energy to repeat the procurement process for the supply of interlocking stabilized block making machines for a housing project in Kiryandongo district.
The bid for the housing project was made in 2009 and Hydraform International (PTY) Limited won the contract to supply hydraform machines. The contract was later renewed to allow the company and its Ugandan affiliate, Hydraform (U) Limited to also construct the houses.
The project is to construct houses for 602 families who were resettled in Kiryandongo after surviving the 2010 landslides in Bududa district. The project stalled since December 2011 after the construction of only 102 houses, allegedly due to lack of funds.
In a statement, the IGG says it received a complaint in which a whistle blower alleged that a company in the names of Hydraform International (PTY) Limited was announced as the Best Evaluated Bidder for the project yet it did not participate in the bidding process.
The whistle blower said there are two companies registered by the Uganda Registration Services Bureau (URSB) in the names of Hydraform (U) Limited and one of them fraudulently participated as an agent for Hydraform International (PTY) Limited in the procurement process.
Consequently, the IGG conducted an investigation and found that that Hydraform (U) Ltd was inadvertently incorporated at the Uganda Registration Services Bureau. The report adds that Hydraform International (PTY) Ltd should have been rejected at the preliminary stage of evaluation in accordance with Regulation 48 (a) of the Public Procurement and Disposal of Public Assets Regulations, 2014.
It also found out that the renewed contract between the Office of the Prime Minister (OPM) and Hydraform (U) Limited was done after the contract period had elapsed, which is against the general principles of the law of contract.
IGG discovered that Hydraform International (PTY) Ltd and Hydraform (U) Ltd did not construct the houses in the Kiryandongo Project themselves but instead subcontracted a local company to do the work whereby similar companies would have been attracted through competitive tendering.
Most of the hydraform machines supplied to OPM by Hydraform International (PTY) Ltd, adds the IGG, have been abandoned, adding that they are not maintained, serviced or repaired and are not used to their full capacities and as a result, there is no value for money realized by government.
The IGG, therefore, recommends that the procurement process be repeated by the Ministry of Energy and that the company Hydraform (U) Ltd be de-registered.
The IGG also wants members of the ministry's evaluation committee - Godfrey Ndawula, Mike Duncan Tumwikirize, Michael Ahimbisibwe, Godfrey Kimuli, Hatimu Muyanja and Valeria Ntege – to be cautioned for having evaluated the bid from Hydraform International (PTY) Ltd outside the PPDA regulations.
The inspection body also recommends the termination, with immediate effect, of the renewed contract between the OPM and Hydraform International (PTY) Ltd for the construction of the Kiryandongo housing units.
It also notes that since most of the hydraform machines are not being used and are not maintained, no more machines should be imported from Hydaform International (PTY) Ltd. Instead, OPM should put in place a programme of recording, stock taking, repairing and putting to use all the Hydraform machines so far supplied and should inform the IGG about actions taken.
The hydraform machines scandal comes at a time when the energy ministry is also embroiled in a bigger scandal involving alleged shoddy work on Karuma and Isimba hydro power projects.