Almost all activities undertaken by the Uganda Railways Corporation in the financial year 2021/2022 has been considered fraudulent by the Auditor General Mr. John Muwanga.
In a qualified Audit opinion, AG Muwanga raised queries on how the institution has mismanaged the country’s rail and water transport infrastructure, leaving billions of money lost in the Stanley Ssendegeya led institution.
Well as government of Uganda undertook a principled step to repair and upgrade the railway and water transport network across the country, there have been setbacks which included inefficiency in repairing and upgrading the railway line and the revamping of Marine Vessels MV Kaawa and MV Pamba at the country’s oldest inland port in Luzira.
However, the Auditor General noted that despite the strides, more than 1,946 stolen railway materials equivalent to UGX.12, 391,542,000 were recovered from a Steels factories in Lugazi. However, URC entered into an out of court settlement and was compensated only Ugx 735,757,503,000 resulting into a loss of Ugx 12.8 billion.
Also, the Auditor General also noted that there has been negligence, irresponsibility on the side of URC that resulted to losses of more than Ugx 12 billion on the rehabilitation of the Tororo-Gulu Railway which undertaken by a contractor who later abandoned the site due to no pay, leaving 136,416 of the re-usable items equivalent to Euro.3,083,846.54 lost.
Muwanga also established that total rental revenue of UGX. Ugx 757.5 million was not disclosed in the financial statements. The revenue for the year under audit is misstated. Also “UGX.509, 300,000 was paid to two suppliers as fuel deposits but lacked supporting documents.” Part of the report reads
Of the 521 rail wagons located in Kenya, URC according to the audit report can account for only 243 wagons. “393 wagons are un-accounted for.”
Auditor General Muwanga also wondered why a Loan amount of Ugx 22 billion had an interest payable of Ugx 9.5 billion which he amounted to 43% interest rate.
The Corporation budgeted to collect revenues amounting to UGX.128.96Bn during the year under review but only UGX.16.4Bn was collected, representing a performance of 12.7% of the target.
A project for rehabilitation of the Namanve – Tororo Line was undertaken at a contract sum Ugx 184.1 billion but the majority of the line was undressed and laid back along the stretch, the sleepers are not packed and made firm on the permanent way and there are no ballast stones on the sections worked on the main line. As a result, there were noted cases where trains tipped and derailed on several sections of the railway line.
“Ugx 942 million allocated for the purchase of locomotives under GOU funding was diverted to activities not related to the purchase of locomotives.” Muwanga noted.
According to the Auditor General, a financial analysis of the Corporation indicated that it has continuously made losses for the previous two years and that URC still needs to make significant improvements in Operating efficiency, profitability and its ability to sustain provision of services.
Also, lots of land supposed to be owned by the institution was further subjugated in Nalukolongo, Rubaga division and given to private individuals some of whom were staff within the institution.
The report further indicated that staff with the same salary scales was earning different gross amounts while some staff with low scales were earning higher than those in higher positions.
Muwanga noted that 76 residential tenants in stations lacked tenancy agreements from which the monthly rental charges were determined, 5 tenants were occupying the Corporation’s premises with no valid tenancy agreements, the total outstanding arrears in relation to tenants with expired tenancy agreement stood at Ugx 618 million as at 30/06/2022 and 15 tenants had accumulated arrears worth Ugx 809 million at 30/06/2022 even though contracts required them to make rental and lease fees payments in advance.
John Linon Ssengendo, the communications officer at Uganda Railway Corporation, in an interaction with this website said the Auditor General’s report did not fully capture almost all issues at the Uganda Railways Corporation leaving many issues miss represented.
This website also learnt that the Board of the organization also held a week long retreat in Jinja and other parts of the country to expound further on how issues at the institution can be managed and solved.