By Vision Reporters             

The Anti-Corruption Court commences trial of interdicted Local Government Permanent Secretary, Muhanguzi Kashaka over the bogus LC bicycles importation on October 22, 2012.

Kashaka along with several senior officials of the Ministries of Local Government, Works and Transport and the Prime Minister's Office face charges of causing government loss of sh4.2b in the bicycles importation scandal.

Kashaka's co-accused include: the Local Government Ministry's Assistant Commissioner, Policy and Planning, Sam Emorut Erongot; Project Officer, Timothy Musherure; and Transport Officer, Adam B. Aluma.

The others are: the Principal Procurement officer in the Prime Minister's Office, Robert Mwebaza and Eng. Robert Kakiza, Principal Civil engineer in the Ministry of Works and Transport. They were all members of the Evaluation Committee that vetted the bicycle deal.            
                                  
The 70,000 bicycles were intended for distribution to LC Chairpersons in parishes, districts and villages to ease their work. The accused are also charged with signing a contract with AITEL without reference the Contracts Committee.

Last year, Kashaka and officials from his Ministry told the Parliamentary Committee probing the botched importation of the bicycles that they paid US$1.7 to an Indian firm contracted to supply the bicycles without verifying whether the bicycles had been shipped.

They said that the payment of the US$1.7 which was 40% of the total due was based on documents that were sent here by the company.

"The company sent us documents indicating that part of the goods had left the factory and they were on their way to Mombasa port. The contract demanded that we pay 40% upon receiving documents and then 60% when the goods arrive," Kashaka said.

It was also discovered during the meeting that the ministry paid in spite of a warning from Bank of Uganda that the documents sent by the company; such as the original delivery note was missing, final destination had changed to Kampala instead of villages and parishes and that also the original certificate was altered.

Kashaka told MPs that the issues raised by Bank of Uganda were immaterial. He said the ministry had paid Bank of Uganda sh100m to advise them on the deal.

The MPs also discovered that Kashaka authorised Bank of Uganda to pay, saying the ministry had verified the quality and quantity of the goods.

The MPs were also shocked to discover that the ministry awarded the company the contract two days after the registrar of companies registered it.  They wondered how payment of such huge amounts of money without due diligence and without confirming whether the goods had actually left India.

The Government signed an agreement with a local firm, Amman Industrial Tools and Equipment to supply the 70,000 bicycles. The company was said to have been working on behalf of Amman Impex, which is based in India. The bicycles were supposed to be supplied by March 25, 2011 but noting came.