Legislators query contract on driving permits
PARLIAMENT | Legislators on the Public Accounts Committee (PAC) are scrutunising the contract government signed for the driving permit after revelation that the contractor is yet to recoup money invested in the project.
This followed a meeting held between MPs and officials from the Ministry of Works who had been summoned to give responses raised in the June 2017 audit report.
The Ministry of Works signed a contract on September 9, 2003, with Face Technologies and the contractor was expected to develop, design, install operate on transfer basis as well as provide the envisaged computerized driving permit system.
The contract price as per contractor’s quotation which was to be recouped from revenues after netting off expenditures incurred.
In its glossy bid document, the contract duration was initially two years effective date or earlier depending on when the contractor would have recovered their investment — which was based on the estimate of 500,000 driving permits.
However, the contract has been has been extended with the last being signed on December 19, 2015, with the contractor arguing that they haven’t been in position to recoup the money they invested in the project.
As part of the recoverable expenses by the contractor, rental expenditure for the facility used by Face Technology is a key component which has procured from a private provider at a predetermined cost with a biannual percentage increment.
A review of the quarterly rental expenditure from February 2011 to November 2016 revealed that Face Technology had spent $1,423,021 as rental expense on the warehouse facility.
A computation of this figure by auditors revealed that the rental expenditure alone translates to 21% of the total contract amount $6,809,956 as at November 2016.
But auditors warned that the rental expense is bound to significantly increase given that the contract has been extended to 2020.
During the probe, the auditors discovered that although the Kyambogo-based facility is a complex construction, it is an open warehouse that would ideally need only a simple non-storey iron sheet roof building with partitioning and all services would be offered.
The auditors faulted the Ministry of Works for not dealing with the matter to save government revenue yet several alternatives would have been sourced from within Government.
The Auditor General pointed out the former AGOA facilities in Bugolobi or former Works offices in Entebbe, saying these would have served the purpose, instead of extending the contract due to rental expenses.
In his report to Parliament, John Muwanga explained that the high rental expenses have significantly delayed the recovery of the outstanding amount of the contractor leading to the contract extensions.
Bageya Waiswa, the permanent secretary at the Ministry of Works, acknowledged that indeed rent was the biggest overhead cost of the project, citing the tenancy agreement for housing the CDP project which provides that the rental costs will increase biannually by 5%.
Waiswa also informed the oversight committee that in 2015, the ministry embarked on exploring alternative options for housing the project.
He added that based on the cost benefit analysis, a decision to construct new premises at Transport Licensing Board was adopted and the facility will accommodate the drivers permit facility and also become a one stop centre office for issuance of licenses for PSVs and driver badges, motor vehicle registration is yet to be implemented.
The Ministry accounting officer told MPs that they envisage that by the time the contract for Face Technologies expires in May 2020, the facility will be ready to shift.