Home Government Government Suspends Firm Involved in UGX 4.7 Billion Bicycle Scam

Government Suspends Firm Involved in UGX 4.7 Billion Bicycle Scam

government suspends firm involved in ugx 4 7 billion bicycle scam
government suspends firm involved in ugx 4 7 billion bicycle scam
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The government has taken action against a firm that defrauded it of $1.7 million (about Shs4.7 billion at that time) in the notorious 2010/11 bicycle scandal. M/S Amman Industrial Tools and Equipment Limited (Aitel) has been indefinitely suspended, while 31 other companies involved have received temporary suspensions ranging from one to five years.

Aitel had falsely claimed in 2012 that it could supply 70,000 bicycles to village chairpersons, ultimately defrauding the government of Shs4.7 billion. Mr. Benson Turamye, the executive director of the Public Procurement and Disposal of Public Assets (PPDA), confirmed the list of suspended companies on their website and stated that the government is in the process of recovering the stolen funds.

“[The firm] failed to substantially perform a contract leading to a financial loss of $1.7 million. We are in the process of recovering [the] funds, as you may be aware, the officers of the Ministry of Local Government are already in prison over the same,” he explained.

In 2014, five officials from the Ministry of Local Government were sentenced to 10 years in jail for their direct involvement in the bicycle scandal. These individuals included former permanent secretary John Muhanguzi Kashaka, former principal accountant Henry Bamuturaki, former principal procurement officer Robert Mwebaze, former senior consultant Timothy Musherure, and Adam Aluma.

Their arrest, prosecution, conviction, and sentencing followed a detailed October 2011 report by the Public Service and Local Government ministries, which revealed how they facilitated the payment of funds to a firm that did not deliver the bicycles.

Mr. Turyamye clarified that the suspension applies to any successor in interest, including any entity substantially similar to a suspended entity or associated with its members or officers. The majority of the suspended companies faced sanctions due to submitting fake tax clearances, advance payments, performance guarantees, and bid documents.

The suspension does not exempt providers from their obligations under existing contracts placed before the suspension. During the suspension period, Procuring and Disposing Entities are prohibited from awarding contracts, soliciting bids, or engaging in other dealings with the suspended companies except for existing contracts.

Temporary suspensions may be lifted after their respective durations upon written application to the Authority.

In May 2010, the Ministry of Local Government received a directive to procure bicycles for Local Council One chairpersons, leading to the selection of Aitel as the contractor for the project among six applicants.

Thirty-one other companies have also been suspended alongside Aitel. These companies include Smishels International Consulting Group, Amononeno Investment (U) Limited, Agono General Enterprises, Magiwa Contractors Limited, Ideal Merchant Property Holding Limited, Zema Savings and Credit Company Limited, Royi Sanna Engineers Limited, Jadel Construction Company Limited, Buildbase Contractors Limited, SSKE Logistics (U) Limited, Richiencoy Services Ltd, Turukana Das General Ent. Company, Kinoni Auto Trading, Nampa General Supplies Limited, Akidas Technical Services Limited, Koltum Company Limited, Visible Investments Limited, Suez Auto Enterprises Limited, and Abba Technical Services Company Limited.

Other suspended companies are Charomah Uganda Limited, K.B Technical Services, Ezekiel Construction Limited, Mabrows Contractors Limited, Rwapa Technologies Limited, Ahijum Technical Services Limited, Yurio General, Kihembe Transporters Limited, Saja’s Company Limited, Loborom Company Limited, Brilliant Arch Consult & Engineering Company Limited, and Empire Tools Limited.