The Parliamentary Committee of trade and Tourism chaired by Hon Mwine Mpaka who also doubles as the MP for Mbarara City South has refuted the allegations and false claims that have been raised by MP Ebwalu Jonathan the MP for Soroti City West accusing Uganda Development Cooperation to have spent shs 5.5bn on 1km road and 2.5bn on construction of perimeter wall.
According to the committee report that was tabled on 2th February, which Spyreports obtained a copy shows that Hon Ebwalu told the committee that UDC Constructed 1km road at shs 5.5 bn and the perimeter wall at shs 2.5bn.
However the committee findings indicate that the road was constructed at the shs 2.5bn and perimeter wall was constructed at shs 1.1bn.
“The committee found out that the complete infrastructure of the boundary walls and the two first class marrum access roads including all variations associated with the works cost UDC a total sum of one billion, one hundred and four million, one hundred and eighteen thousand, two hundred ninety seven (1,104,118,297) ” reads part of the committee findings.
The Minister’s presentation on Soroti fruit factory which is to be presented on floor of Parliament this week.
Hon. Ebwalu Jonathan, Member of Parliament for Soroti West Division raised a number of issues of National Concern in regard to the management and operations of Soroti Fruit Factory. They include among others apparent gross abuse of office and resources which tantamount into the mismanagement of the factory business, the cost of building the perimeter wall at UGX 2.5 billion and construction of 1kilometer of road at UGX 5.5billion are extremely high and very expensive. What was the cost of fencing off the land at Telemot. Why has the company not established a waste processing plant at Telemot despite receiving funds for the same? Suspension of the governing Board of Soroti Fruit Factory by the Executive Director, UDC; No Annual General Meeting (AGM) has been held and UDC has avoided attending the AGM. There is no effective shareholder dialogue; UDC 2016 cannot retrospectively own shares in Soroti Fruits that was established in 2012; has no shares in Soroti Fruits; there is no instrument that vests investments of UDCL 2003 into UDC 2016; section 33(3) of the UDC Act 2016 bars UDC of 2016 from taking on assets or liabilities of UDC under Cap.319; the only assets of UDCL that can and could be taken by UDC 2016 are listed under schedule 2 of the UDC Act, 2016 and Government of Uganda must appoint the appropriate entity to take over Government interest in Soroti Fruits; The Management is reported to have purchased the fruits,which is the raw material to be processed into juice from Kenya and Tanzania instead of buying from individual local farmers and the fruit farmer cooperatives as was the initial plan intended to enhance social-economic wellbeing of the People of Soroti; Brown water was allowed to go into the production of juice and how management took long to realize this error. A product recall was made without board approval occasioning a loss of 200m in 2020. How was the loss captured in the financial books of accounts; Soroti Fruits Limited has no audited books of accounts since 2018; Why can’t Soroti Fruits be allowed to utilize its money from its accounts as per approved budgets. Why is UDC holding into Soroti Fruits’ money?; anagement of Soroti Fruit Factory charged farmers for pumps to spray their fields at a cost of UGX 200,000 per pump and yet these pumps were provided by Government to be used by farmers free of charge; Why did UDC enter into contract with Huangpa for the installation of a mango processing line after all bids had expired contrary to procurement law and practices; Fluctuating price for pouches used to pack juice. Why does the factory keep buying pouches from different suppliers at high prices in USD; the recruitment process of staff to be employed does not follow the correct procedures and is not on merit.
However, the Minister for Trade cleared the allegations raised by Hon. Ebwalu on UDC and Soroti Fruit Facory.
Alleged gross abuse of office and mismanagement of resources
The Minister said the Cost of the perimeter wall reported at UGX 2.5Billion. The process of procuring services to construct the perimeter wall was guided by the PPDA Act. In Financial Year 2013/14 and 2014/15 procured a contractor at a total contract value of Ugx 1,104,118,297 (One billion one hundred four million one hundred eighteen thousand two hundred ninety seven shillings) to construct the said perimeter wall around the 5.14 acres of land that the factory occupies. UDC did not spend UGX 2.5Billion as alleged.
Cost of constructing access roads to Soroti fruit factory
The minister further says UDC was allocated approximately five (5) acres of land for the construction of the Soroti fruit factory in the Soroti Industrial and Business park that is owned by Uganda Investment Authority (UIA). UIA was required to service the industrial park with the requisite infrastructure facilities among which was road access to the fruit factory site.
However, UIA did not have resources to do so despite having completed the engineering designs for the whole industrial and business park.
UDC had to fast track the road works before construction of the factory starts whose dates had been set. Implementation for construction of the access roads to the fruit factory site was through inter- institutional arrangement that was agreed upon between UDC and UIA through signing a Memorandum of Understanding (MOU) on December 17, 2012.
This activity was conducted in line with the PPDA Act Section 39 (a) which allows an Accounting Officer of a Procuring and Disposal Entity(PDE) to contract out the procurement functions of its entity to another PDE in this case Government body to develop the required infrastructure in the industrial park.
The priority roads to be constructed included; – Temele industrial road – 1.73km; Pineapple lane – 0.221km and Palm Tree close –0.18km.
The obligation of UDC was to provide funds to UIA and the latter had to procure, contract and supervise the construction works.
The actual total length of the road constructed was 2.06547 Km at a total contract value Ugx 2,342,446,475 (Two billion three hundred forty two million four hundred forty six thousand four hundred seventy five shillings) inclusive of the supervisory consultancy services.
This is contrary to the 1km road alleged to have been constructed at Ugx 5.5 billion.
All the above mentioned procurements were cleared by the office of Solicitor General.
The minister adds that the cost of fencing off the land at Telemot and has not established a waste processing plant at Telemot despite receiving funds for the same.
UDC acquired a waste disposal site for the factory and was fenced off at a cost of Ugx 110,233,818 (One hundred ten million two hundred thirty-three thousand eight shillings).
UDC did not receive any funds for the development of the site.
According to the Environment and Social Impact Assessment carried out for this site, development was estimated at Ugx. 38.6 billion (Thirty-eight billion shillings).
Soroti Fruits Limited has never received any funds for the development of the Solid Waste Dumping Site.
Suspension of the governing Board of Soroti Fruit Factory by the Executive Director, UDC
The minister states that the responsibility to appoint and withdraw members of the board of subsidiaries and associated companies of UDC lies with the UDC board.
This is in line with Section 4 (K) of the UDC Act, to appoint any person to act on behalf of the corporation as director of or in any other capacity in relation to any enterprise or undertaking in which the Corporation has an interest.
At the board sitting on September 8, 2020, the board agreed to: withdraw UDC nominee members to SOFTE board due to the infighting that was taking place at the time and had paralyzed the functioning of the factory; replace those nominees with technical staff who are competent and knowledgeable in Governance to sit on the board as UDC nominee representatives since the board tenure was coming to the end at that time.
The following persons were nominated on the board:
Dr. Patrick B. Birungi
Ms. Hope A. Kisitu
Mr. Edbert Oyesiga
The Hon. Minister of Trade, Industry & Cooperatives was informed at all times and in accordance with the UDC Act, the board minutes about this decision was submitted.
These three (3) board members were to fill the governance vacuum for a short while but as we all know the UDC board was appointed in November 26, 2021. The UDC board is to fully constitute a new board for SOFTE within three (3) months.
Annual General Meeting (AGM) of Soroti Fruits Ltd
In the minister’s presentation shows that Soroti Fruits Ltd held its AGM on November 29 th , 2021 and was attended by both shareholders (UDC and TEFCU). UDC attended the AGM in accordance with the corporation’s internal policy on Governance of Subsidiaries. In addition, a representative of the Auditor General also attended the AGM and presented the Auditor Generals reports to the shareholders.
SOFTE buys fruits from neighbouring countries such as Kenya and Tanzania
The minister clearly states that the factory was set up to process local fruits into pulp/concentrates. Therefore, the factory has never and will never import fruits and juice concentrates into the country. On the contrary, UDC is now pushing for a ban on importation of pulp/concentrates.
Brown water into the production of juice
In his presentation, the minister says that to date, Soroti Fruits Limited has never used brown water in any production process nor conducted any product recall.
The company upholds commendable quality control and assurance measures to protect its customers, reputation, and dignity. The factory is supplied by National Water Sewage Corporation and has 84,000ltrs per day water treatment plant which treats the supplied water to portable standards.
No audited books of accounts since 2018
According to the minister’s presentation to Parliament, the company is regularly audited by the Office of the Auditor General. Audited books of accounts are available for financial years 2018/2019 – 2020/2021 as well as the audit reports by the Auditor General.
Utilization of money from its accounts as per approved budgets
UDC receives funds for SOFTE from the Ministry of Trade, Industry and Cooperatives and subsequently all funds earmarked for the business are spent on SOFTE budget activities. SOFTE spends the funds inclusive of the internally generated funds with approval from their board.
Motorised spray pumps to farmers
In his presentation to Parliament, the minister says the Government of Uganda through UDC procured spray pumps on June 12, 2018 to assist fruit farmers in controlling pests and diseases that had become a menace to quality and high fruit yield in the region. UDC delivered the pumps and were handed over to the farmer representative (Teso Tropical Fruits Cooperative Union) free of charge on September 20, 2018. Therefore, neither UDC nor SOFTE charged any fee on the spray pumps.
UDC ED Speaks Out
When contacted, UDC Executive Director Dr. Patrick Brungi, clarified that of all Hon. Ebwalu’s points on the floor of parliament collapsed after provision of information to the committee. On the road construction, Birungi said that procurement was done by UIA not UDC and values are false since the actual cost was 2.5 billion, not 5.5 billion as alleged and information was given to the committee.
“On the wall fence, the total cost was 1.1 billion and not 2.5 billion as Hon. Ebwalu said,” says Dr. Patrick Birungi during a telephone interview.
He adds that he has no powers to sack the board of Soroti Fruits Factory as Hon. Ebwalu mentioned. Dr. Birungi adds that the recall was made by the UDC Board and the minutes were provided to the Committee.
Birungi says that by the time all these things took pace (2013-2014), he was not in office.
“I reported to office in April 2019. So, what is reported against me is just a witch-hunt by some political people from the area,” he adds.
