Kampala’s Controversial Tenders
Jun 25, 2003
When the former minister of local government, Jaberi Bidandi Ssali tried to stop the award of tenders to run the two major markets in the city to Sheila Investments and Victoria International, he was referred to as a nosing politician by the city authorities.
By Joshua Kato
When the former minister of local government, Jaberi Bidandi Ssali tried to stop the award of tenders to run the two major markets in the city to Sheila Investments and Victoria International, he was referred to as a nosing politician by the city authorities. But six months later, Bidandi has been proved right.
The controversial and unclear circumstances under which the tenders were awarded have already began causing troubles for the city authorities.
Last week, a strike by traders at Nakasero Market over their handling, including an increase of charges by nearly five times, by Sheila Investments, the company that won the tender, paralysed the whole city. Nakasero market is one of the main shopping centres in Kampala.
The goings on at St. Balikudembe, the biggest market in Kampala, are not good either. Traders are also crying over mismanagement by Victoria International, another company owned by Hassan Bassajjabalaba.
Any absence of a wrangle in the award of a tender is an exception, rather than a rule. A parliament report on KCC released in May, points out that whereas the potential for generating revenue in Kampala is high, it has got enormous management problems to the extent that money generated is put to waste or diverted for personal use.
The report says fraud is an inherent disease affecting KCC. Among the systems the report listed as being abused is the tendering system.
Every activity in and around the city is tendered out. Tax collection, markets management, garbage collection, taxi park management, boda-boda transport, toilet management.
The Local Government Financial Act directs that every district, sub-county or urban council should have a tender board.
According to Section 93 (2) of the Act, members of the district tender board should not be involved in politics of any kind.
In unprecedented abuse of the local government regulations, some of the companies that win tenders are actually said to be owned by some of the councillors. According to the Financial Act, companies owned by councillors or politicians are not supposed to bid for tenders but in Kampala there is evidence that companies in which councillors have got stakes are running some of the city businesses. Seka is one of the companies that is currently running the collection of fees from lorries and pick-ups that park around Arua Park.
Francis Babu, the Central division Member of Parliament and one of the people who has been called on several occasions to intervene in the wrangles, said Seka is owned by a group of councillors, led by one Lukoda. Babu says that most of the owners of the companies are actually UYD members.
“What I know is that they are awarding themselves as many tenders as possible in a bid to collect money to use in the 2006 elections,†Babu says.
Both Charles Sserunjogi and councillor Lukoda have vehemently denied any relationship to Seka. But even then, the manner in which the company was administered to the truck drivers left a lot to be desired.
“At the time Seka came, we were paying parking fees to both Greenboat and UTODA. Seka came in as a third fees collector. It was so much for us,†complained one of the drivers. After a stand-off that took several days, the Central division decided to withdraw Greenboat and UTODA from collecting the fees. It is now only Seka that collects the money.
The changing of the city parking business from Greenboat to Multiplex LTD was met with an embarrassing stand-off. When Greenboat was informed that Multiplex had won the tender, they took days to acknowledge this change.
Greenboat officials thought that they had a right to remain with the tender for another term since this was their idea. The impasse went as far as Parliament, as it threatened to turn into a fight. Finally, Greenboat sat down with Multiplex who paid them some money. Multiplex also agreed to cater for all clients who had paid their money to Greenboat.
The awarding of the bus park tender was never smooth. In fact, there is a case in the courts of law related to the award of the tender and the activities before.
KCC and the tender board were warned that there were serious problems with the bidding company. But they failed to heed the warnings.
A parliamentary probe committee set up to investigate the award of this tender has recommended that KCC revisits it.
During the award of the tenders to run the two markets, traders say, it was outright carelessness and poor management for KCC to brush aside fears raised by both the traders and Bidandi Ssali.
“When the minister pointed out that the two companies were not registered, the council said the companies were registered, yet they were not,†one of the traders said.
Bidandi certainly has the last laugh. The two companies are currently in court, battling with cases of forgery. They forged the Articles of Association and certificates of incorporation that they presented to KCC and the Kampala tender board. At the peak of the controversy, the mayor, John Ssebaana Kizito, was against the award of two markets to companies owned by the same person. He even asked the town clerk to stop the hand over of the winning tender to one of the companies. The town clerk indeed wrote a letter to that effect to the district board. However, a group of councillors, accused the town clerk of interfering in the activities of the tender board. They even tried to impeach him. A commission of inquiry however, vindicated him of all the accusations.
The two companies have gone ahead and raised fees in the markets, without consulting the city authorities. At Nakasero Market, butcheries fees were raised from sh50,000 to sh250,000, lock-ups from sh150,000 to sh300,000, tomato stalls from sh9,000 to sh45,000, while fish stalls raised from sh17,000 to sh200,000.
The traders were so infuriated that they nearly stoned the Central division chairman, Charles Sserunjogi, when he tried to calm them. He explains that the managers of the tenders do not have a right to raise charges without consulting KCC. Subsequently, he put on hold the implementation of the new charges. But traders who are affected by the tenders point out that the underlying problem is poor supervision by KCC.
“After getting their money, they just sit back. They should be around to supervise and be able to follow up on the tenders,†Erias Kazibwe, a trader at Nakasero, says.
Sheila Investments bid over sh80m for Nakasero Market, while Victoria International bid over sh120m for St. Balikudembe. According to traders, this money was so high and could not be collected from the markets.
The Financial Act states that it is not automatic that the highest bidder takes the tender, although KCC always picks the highest bidder. How the money is going to be collected is not an issue.
“KCC lacks a research team to know how much money can be collected from a certain business. They just go for the highest bidder and this affects the traders,†a trader said.
Influence peddling by both councillors from the City hall and politicians from the Central government in the activities of the tender board is another problem.
“Whenever there is a big tender to be awarded, we receive all sorts of letters from politicians from both the central government and KCC,†one of the members of the tender board, complains.
He says that this affects their judgement. Such tenders include the running of the markets, taxi business, the construction of roads in the city and the collection of taxes.
During the award of the bus park tender, letters to the tender board and Major Kakooza Mutale and Fox Odoi, a legal officer in the office of the President, were among others implicated.
There is information that a company owned by a group of councillors and some businessmen is scheming to grab the tender to manage taxis from UTODA.
UTODA’s current contract ends in September. Sserunjogi says the contract will not be renewed, but UTODA is free like any other company to bid. Ends
When the former minister of local government, Jaberi Bidandi Ssali tried to stop the award of tenders to run the two major markets in the city to Sheila Investments and Victoria International, he was referred to as a nosing politician by the city authorities. But six months later, Bidandi has been proved right.
The controversial and unclear circumstances under which the tenders were awarded have already began causing troubles for the city authorities.
Last week, a strike by traders at Nakasero Market over their handling, including an increase of charges by nearly five times, by Sheila Investments, the company that won the tender, paralysed the whole city. Nakasero market is one of the main shopping centres in Kampala.
The goings on at St. Balikudembe, the biggest market in Kampala, are not good either. Traders are also crying over mismanagement by Victoria International, another company owned by Hassan Bassajjabalaba.
Any absence of a wrangle in the award of a tender is an exception, rather than a rule. A parliament report on KCC released in May, points out that whereas the potential for generating revenue in Kampala is high, it has got enormous management problems to the extent that money generated is put to waste or diverted for personal use.
The report says fraud is an inherent disease affecting KCC. Among the systems the report listed as being abused is the tendering system.
Every activity in and around the city is tendered out. Tax collection, markets management, garbage collection, taxi park management, boda-boda transport, toilet management.
The Local Government Financial Act directs that every district, sub-county or urban council should have a tender board.
According to Section 93 (2) of the Act, members of the district tender board should not be involved in politics of any kind.
In unprecedented abuse of the local government regulations, some of the companies that win tenders are actually said to be owned by some of the councillors. According to the Financial Act, companies owned by councillors or politicians are not supposed to bid for tenders but in Kampala there is evidence that companies in which councillors have got stakes are running some of the city businesses. Seka is one of the companies that is currently running the collection of fees from lorries and pick-ups that park around Arua Park.
Francis Babu, the Central division Member of Parliament and one of the people who has been called on several occasions to intervene in the wrangles, said Seka is owned by a group of councillors, led by one Lukoda. Babu says that most of the owners of the companies are actually UYD members.
“What I know is that they are awarding themselves as many tenders as possible in a bid to collect money to use in the 2006 elections,†Babu says.
Both Charles Sserunjogi and councillor Lukoda have vehemently denied any relationship to Seka. But even then, the manner in which the company was administered to the truck drivers left a lot to be desired.
“At the time Seka came, we were paying parking fees to both Greenboat and UTODA. Seka came in as a third fees collector. It was so much for us,†complained one of the drivers. After a stand-off that took several days, the Central division decided to withdraw Greenboat and UTODA from collecting the fees. It is now only Seka that collects the money.
The changing of the city parking business from Greenboat to Multiplex LTD was met with an embarrassing stand-off. When Greenboat was informed that Multiplex had won the tender, they took days to acknowledge this change.
Greenboat officials thought that they had a right to remain with the tender for another term since this was their idea. The impasse went as far as Parliament, as it threatened to turn into a fight. Finally, Greenboat sat down with Multiplex who paid them some money. Multiplex also agreed to cater for all clients who had paid their money to Greenboat.
The awarding of the bus park tender was never smooth. In fact, there is a case in the courts of law related to the award of the tender and the activities before.
KCC and the tender board were warned that there were serious problems with the bidding company. But they failed to heed the warnings.
A parliamentary probe committee set up to investigate the award of this tender has recommended that KCC revisits it.
During the award of the tenders to run the two markets, traders say, it was outright carelessness and poor management for KCC to brush aside fears raised by both the traders and Bidandi Ssali.
“When the minister pointed out that the two companies were not registered, the council said the companies were registered, yet they were not,†one of the traders said.
Bidandi certainly has the last laugh. The two companies are currently in court, battling with cases of forgery. They forged the Articles of Association and certificates of incorporation that they presented to KCC and the Kampala tender board. At the peak of the controversy, the mayor, John Ssebaana Kizito, was against the award of two markets to companies owned by the same person. He even asked the town clerk to stop the hand over of the winning tender to one of the companies. The town clerk indeed wrote a letter to that effect to the district board. However, a group of councillors, accused the town clerk of interfering in the activities of the tender board. They even tried to impeach him. A commission of inquiry however, vindicated him of all the accusations.
The two companies have gone ahead and raised fees in the markets, without consulting the city authorities. At Nakasero Market, butcheries fees were raised from sh50,000 to sh250,000, lock-ups from sh150,000 to sh300,000, tomato stalls from sh9,000 to sh45,000, while fish stalls raised from sh17,000 to sh200,000.
The traders were so infuriated that they nearly stoned the Central division chairman, Charles Sserunjogi, when he tried to calm them. He explains that the managers of the tenders do not have a right to raise charges without consulting KCC. Subsequently, he put on hold the implementation of the new charges. But traders who are affected by the tenders point out that the underlying problem is poor supervision by KCC.
“After getting their money, they just sit back. They should be around to supervise and be able to follow up on the tenders,†Erias Kazibwe, a trader at Nakasero, says.
Sheila Investments bid over sh80m for Nakasero Market, while Victoria International bid over sh120m for St. Balikudembe. According to traders, this money was so high and could not be collected from the markets.
The Financial Act states that it is not automatic that the highest bidder takes the tender, although KCC always picks the highest bidder. How the money is going to be collected is not an issue.
“KCC lacks a research team to know how much money can be collected from a certain business. They just go for the highest bidder and this affects the traders,†a trader said.
Influence peddling by both councillors from the City hall and politicians from the Central government in the activities of the tender board is another problem.
“Whenever there is a big tender to be awarded, we receive all sorts of letters from politicians from both the central government and KCC,†one of the members of the tender board, complains.
He says that this affects their judgement. Such tenders include the running of the markets, taxi business, the construction of roads in the city and the collection of taxes.
During the award of the bus park tender, letters to the tender board and Major Kakooza Mutale and Fox Odoi, a legal officer in the office of the President, were among others implicated.
There is information that a company owned by a group of councillors and some businessmen is scheming to grab the tender to manage taxis from UTODA.
UTODA’s current contract ends in September. Sserunjogi says the contract will not be renewed, but UTODA is free like any other company to bid. Ends