CAN UGANDA GOVERNMENT GUARANTEE ASHOK LEYLAND FUNDING TO IMPORT 980 BUSES FROM INDIA WITHOUT LOCAL CONTENT?
By Goodluck Musinguzi
As Uganda heads to 2021 General Elections, i bet no government official will commit millions of dollars to fund a project that is not owned by government or locals.
Ashok Leyland, an Indian Firm that is behind Tondeka City Bus Project has been exposed after documents from Ministry of Finance leaked. Tondeka City Bus Project has been branded as a local project that is meant to help Ugandans.
Kampala City was supposed to get a new Bus transport company by march 2020 if a proposal by Tondeka Metro to KCCA was approved. Peter Kimbowa, the Chairperson of Tondeka Metro is quoted by media then.
However, as of today, the big question that has failed to be answered who is going to finance this huge investment and how does it benefit Ugandans.
New details show Ashok Leyland, an Indian firm is spearheading the project to borrow money from Exim Bank of India, buy buses from India, operate and maintain them. All they need is a guarantee from Uganda government.
A brief to the Ministry of finance, planning and economic development show Tondeka Metro Mass Transit-Bus System(MTBS) for Greater Kampala Metropolitan Area is a project spearheaded by Ashok Leyland of India a 70 year flagship brand of Hinduja Group.
Hinduja Group is one of the largest commercial vehicle manufacturers in India with an annual turnover of over $4 billions. They claim to be one of the largest supplier of City Buses to all State Transport Corporations in India carrying almost 70 million passengers everyday in India.
The Financing component say it will be provided by Exim Bank of India through the buyer’s credit program under government of India’s National Export Insurance Account to the GOVERNMENT OF UGANDA.
The project will be self financing without any need for the government of Uganda to provide any counter-part funding. The buses and required infrastructure will be acquired on a buyer’s credit facility valued at US$ 163.7 MILLION from Bank of India.
NOTE, The buses will be secured from India using a buyer’s credit, the Government of Uganda needs to provide a loan Agreement acceptance to the Exim Bank of India.
Ashok Leyland as the bus manufacturer will not only offer the buses but will also be involved in the operations of the infrastructure depots/workshops. The maintenance of the buses will be undertaken by Ashland Motors Africa(AMA)- the local dealer of Ashok Leyland registered in Uganda for the last 4 years.
Recently we wrote;
WHY RUSH TO IMPORT 1000 BUSES FROM INDIA YET WE ARE MANUFACTURING OURS? CONCERNED CITIZEN RAISES RED FLAG
By Musinguzi Goodluck
A concerned citizen has petitioned the Inspector General of Government over a deal where government will guarantee the importation of 1000 buses through a company called Ashok Leyland of India.
The Inspector General of Government, Justice Irene Mulyagonja received the letter on 10th February 2020 at Jubilee Insurance Center on Parliamentary Avenue in Kampala City.
The letter is titled, “LACK OF TRANSPARENCY IN THE PROPOSED PROCUREMENT OF 1000 BUSES FOR THE KCC’S METRO BUS TRANSPORT SYSTEM”.
Various reports of government show rapid productivity growth in Uganda is probably more due to improved utilization of existing capacities of Ugandans made possible by the return of peace, gradual reduction in market distortions and rule of law.
The government through Uganda Development Bank has been growing capital to help diversify its production and expand its industrial structure.
A concerned citizen is asking the IGG to question who the beneficiaries will be of this project that is masked in ordinary people whose capacity is doubtful.
The Poverty Eradication Action Plan (PEAP) 1996’s main goal was to guide all future public investments and to empower the poor by enhancing their incomes.
Elias Lukwago, the Lord Mayor of Kampala City and councillors have questioned the Kampala Metro Project dubbed “Tondeka Metro Bus”.
The concerned citizen is raising a matter of law, he/she says the Ministry of Transport led by Gen Katumba Wamala and KCCA have not allowed public participation through open bidding to allow local investors in the process.
“It looks like Ashok Leyland was handpicked to supply these buses in total disrespect of public procurement rules of Uganda. Its subsidiary was also granted all routes to ply to the exclusion of all other players”.
President Yoweri Museveni has been promoting “BUBU” Buy Uganda , Build Uganda and Uganda government is building a bus factory based in Jinja, Eastern Uganda. The concerned Citizen is asking why are we not supporting our local investors? Are we our own enemies?
The multi billion project is targeting one company and yet with similar incentives from Ministry of Finance , other local investors can supply the same buses at a cheaper cost.
The IGG has been asked to halt the ptoject and stop the outrageous transaction, investigate ant acts of corruption and abuse of office intended to enrich individuals at the cost of the nation.
Uganda government has lost money in previous cases like Katosi Road Construction , local government bicycles , Temangalo saga and many others.
On 20th February 2020, the stakeholders of the Tondeka Metro Bus service met with the speaker of parliament who is concerned with the availability of jobs for thousands of taxi drivers and conductors.
Rt Hon Rebecca Alitwala Kadaga said the biggest issue is failure by the company to buy buses from Kiira Motors.
Peter Kimbowa , the board Chairman tried to reassure the speaker that after buying 980 buses from India they will also consider Uganda’s Kiira Motors.
The Lord Mayor of Kampala Elias Lukwago has also tasked the Minister for Works and Transport Gen. Edward Katumba Wamala to disclose the donors for Tondeka Metro Buses that are expected to start operation before the end of 2020.
Ashok Leyland is involved in a court case over accrued rent arrears worth $ 50,000 for property where they had a show room along Jinja road. Following the dispute with the owner of the property, Muhammad Punjani, the firm was forced to relocate to Industrial Area.