Barely ten weeks after Uganda National Roads Authority (UNRA) boss Allen Kagina apologized to Ugandans for making a Shs21 billion payment to a fake company, the same is happening again with considerable resources being expended to a dubious Chinese company working on Olwiyo- Gulu Road and Ntungamo-Mirama Hills/Kagitumba border worth Shs238 billion.
Investigations carried out by TheUgandan show that UNRA boss Ms Kagina could again be as caught up in a storm after it emerged that UNRA gave Zhongmei Engineering Group Limited (hereinafter referred to as Zhongmei is based Nanchang, Capital of Jiangxi Province, China an undisclosed portion of the multibillion roads upgrades.
Ms Kagina and her top-level managers of head of finance Brazza Kwesiga, director of corporate services Edna Rugumayo and chief accountant John Mpanga are back in the spotlight for deliberately not cross-checking documentation and doing enough due diligence to make sure that the government is entering an agreement and paying the right people.
The first advance of Shs 6.5 billion was made on 06/01/2015 and transferred the money to a special imprest account on 17/08/2015, after 223 days and many more payments followed until November 8, 2016 when Zhongmei’s two owners, AO Liugen and Yu Qianming unanimously sold their ninety-five (95) and four (4) ordinary shares in the company contracted to do work by UNRA and the Government of Uganda.
Ironically, the revelations that the former controlling partner, Mr. AO Liugen gave away all his 95% shares while the least investor Yu Qianming only parted away with just 4% and remained in the firm that premised at plot 12, Bandali Rise, Bugolobi Kampala.
A spot check by TheUgandan with the Registrar of Companies at Uganda Registration Service Bureau show that files on the new ownership of Zhongmei Engineering Group (U) LTD to which UNRA advanced the last few billion shillings between November 17, 2016 and January 17, 2017 only had former minority partner,Yu Qianming with 1% while identities of the owners of the remaining 99% shares were suspiciously not available.
In fact, the original Zhongmei Engineering Group Limited in Uganda does not exist anymore and Ms Kagina knows the company that UNRA gives the money to from as way back as November 17, 2016, is not even the one currently constructing the road just like was the case in October 2016 UNRA acknowledged to giving a proxy, China Railway No 3 Engineering Group Uganda Ltd the money to finance construction of the Villa Maria-Sembabule road yet it turned out to be just an account receiving the money because the contract was traded from China Railway No 3 Engineering Group Company Limited, a China-based company.
IGG caught clueless and blue
Once Ms Annet Twine, the director of Leadership Code at the Inspector General of Government got wind of the dubious payments UNRA was making to double registered companies like Zhongmei, she sent Ms. Kangabe Primrose, a senior Inspectorate officer and Ms Mugisha Ruth, the Inspectorate Officer to conduct an inquiry and get the information and certified documents in respect to the registration details of Zhongmei and three other dubious Chinese firms that UNRA is doing business with.
TheUgandan understands that the transfer of ownership of Zhongmei was inevitable after the non lucrative Projects Affected Persons (PAPs) payments were done and real money for construction had started coming thus would best evade taxes by existing as local private limited liability companies with similar identity as the Chinese state-owned Zhongmei.
Kagina in bed with dubious Chinese firm?
As fate would have it, we reported that Uganda Police asked for a court order instructing UNRA and the PPDA to stop working with the Chinese company that was received by the Directorate of Legal Services UNRA on January 10 for three months as investigations are carried out that will, if found true, further tarnish the image of the institution that is charged with overseeing the development of the road sector in Uganda, a task heaped on UNRA’s scandal ridden history.
“It is hearby ordered that UNRA and PPDA suspend or stop any further dealings or transactions with Zhongmei Engineering Group Limited, Zhongmei Engineering Group Limited and Zhongmei Engineering Group Limited (U) Ltd for the period of three months to enable conclusion of police investigations vide CID headquarters GEF 12/16/2016,” reads part of the order that Ms Kagina protested against saying the intended probe will cause a huge financial loss to the government.
Sources within the UNRA intimated that all this forgery has been going under Ms Allen Kagina’s watchful eye going as afar as knowingly defending the payments to the new dubious Zhongmei while calling for the arrest of the investigating officer Cornelius Wabweyo that was assigned by Uganda Police.
When she was contacted by this reporter on Thursday, Ms. Kagina’s office directed questions to us; “Yes and she gave reasons for the implications of having the contractor off site. May be the questions to ask; Should the works have stopped? Or should should this have happened only if the contractor is found culpable? What would happen then if they’re not found culpable? I see lost time, taxpayer monies and work progress affected.”
UNRA spokesperson Mark Ssali denied knowing about the Zhongmei developments and ruled out of accusations of “serious negligence of duty” and corruption.
“We have crossed checked with our legal department and they said the Zhongmei we contracted is the same doing the work on Olwiyo- Gulu Road and Ntungamo-Mirama Hills/Kagitumba border. We do not have the information about the new Zhongmei and their new shareholders yet or about the original partners selling out and opening new companies,” Mr. Ssali told TheUgandan.
He added, “As far as we (UNRA) know, we are dealing with the original Zhongmei and they are the one doing the job.”
But this news website, with authority can reveal that besides the Chinese state-owned Zhongmei, under Uganda National Roads Authority’s watch, two more Zhongmei construction firms registered and incorporated in Uganda have participated in the roads body’s bidding processes, one even being the best evaluated to construct 78.5 Km Rukungiri-Kihihi-Ishasha/Kanungu Road worth Shs 278 billion.