Members of the House Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE) have raised concerns over the Shs20 billion allocated for the assembly of 25 Kayoola electric buses by Kiira Motors Corporation.
The legislators argued that the cost of producing each bus is significantly higher than the cost of importing a similar bus into the country.
The issue was brought to light by the December 2023 Auditor General’s report, which highlighted that several planned activities, including the manufacture of 25 electric buses valued at Shs1.960 billion, had not been implemented by the end of the 2022/23 fiscal year.
This prompted Martin Muzaale, the Buzaaya County MP to question Kiira Motors Corporation officials on the justification for the high cost per bus.
“So this is an activity that you were supposed to do at a cost of Shs15b to produce 25 buses. Are you trying to say that 25 buses were to cost Shs20 billion? How much is the cost per bus? Just don’t tell us it depends. We have an item that was allocated Shs20b to produce 25 buses, and we want to ascertain if it is competitive.” Muzaale said. In
Isaac Musasizi, the Chief Executive Officer of Kiira Motors Corporation, clarified that although Shs20b had been allocated for manufacturing the buses, only Shs5b had been spent by the end of the financial year. He added that the funds were not solely for the buses but also for necessary tools and infrastructure adjustments at the Nakasongola plant, which was not initially set up for this purpose. The buses produced include 8-meter buses with a capacity of 56 passengers and 10-meter buses with a capacity of 70 passengers, intended for city use.
Musasizi explained, “While the money goes into the production of buses, there are certain things which don’t go into the bus. For us to produce in Nakasongola, there are some tools we buy because that plant wasn’t set up for that purpose.”
However, MPs remained unconvinced by the explanation. Medard Lubega, Chairperson of COSASE, requested a detailed breakdown of the production costs for each bus. He noted, “Actually, there is a bigger question, whether that bus gives us value for money. Because when you tell me on the face of it, 25 buses for Shs20b, when we sell them, how much do we get? We want to know the specifications and attendant costs of these 25 buses.”
Equally, Elgon County MP Gerald Nangoli questioned the viability of Kiira Motors Corporation, given that the cost of producing its buses in Uganda is higher than importing them. He raised doubts about the company’s ability to reduce import dependence as initially envisioned.
He said, “If I import a bus from Japan or elsewhere, the cost of a good bus is between Shs300m to Shs350m, and if I modify it in Kenya along Mombasa Road, it would cost around Shs250m . The essence of having a manufacturing plant here was to bring our cost down so that Ugandans could afford it. But when you look at the cost of production, manufacturing a bus here is three times the cost of importing one, including taxes. So, what are we really doing? Are we really in business? Are we trying to save the country from importation?” Nangoli wondered.
