Ex ministry boss defends Kashaka over sh4b loss

By Edward Anyoli  

The former undersecretary ministry of local government, Gideon Obbo, has defended John Kashaka Muhanguzi over a fraudulent bicycle deal that cost government sh4b.

While appearing as Kashaka‘s witness before Justice Catherine Bamugemereire of the Anti-corruption Court Friday morning, Obbo defended the decision of the committee to approve the purchase of 70,000 bicycles for local council officials.

Obbo told the court that there was nothing irregular that Kashaka, the interdicted permanent secretary, committed in procuring the bicycles.

He said proper procedures were followed in procuring the bicycles and that the procurement was an emergence since it was meant to be given to LCI chairpersons during the February 2011 presidential election.

Obbo said the ministry did all it could to ensure that the bicycles were secured but unfortunately the supplier did not deliver upon the payment of 40%.

Obbo said the contract committee; evaluation committee and audit department did their best to ensure that all the procedures were adhered to as required by the law.

Kashaka is accused together with Henry Bamutura, the principal accountant; Robert Mwebaze, the principal procurement officer, Sam Emorut Erongot, assistant commissioner for policy and planning, Timothy Musherure and Adam B. Aluma, an administrative officer.

Kashaka and Bamutura are accused of causing financial loss by authorizing payment of US$1,719,454.58 to the purported supplier M/s AITEL, despite being warned by Bank of Uganda that documents presented by Stanbic Bank did not comply with terms for letters of credit.

The prosecution contends that the two were aware it would cause financial loss to the Ministry. The two, according to prosecution, also wrote to Bank of Uganda amending the conditions for the final destination of the bicycles from the villages and parishes to Kampala.

They never consulted the contracts or adjusted the contract price accordingly. The State also accuses Kashaka and Emorut of approving the contract with irregularly amended terms which allowed payment of 40% of the money on presentation of shipping documents instead of full payment on delivery of the bicycles. They also allegedly extended the bicycles delivery period by one month.

According to the State, Mwebaze also advised bidders to ignore technical specifications and reduced the bid security to sh300m without consulting the contracts committee.

Among other complaints, Emorut, Mwebaze, Aluma and Musherure are accused of irregularly advising that M/S AITEL met the minimum requirements and experience of having supplied 70,000 bicycles in a single lot.

They also irregularly recommended that M/S AITEL had complied with the payment terms.

The State also said that in addition, the four recommended M/S AITEL despite it having no joint venture agreement with Amman Impex as stated in the solicitation documents. The state contends that these should have been grounds to disqualify M/S AITEL.