Russian vehicle tracking deal

On Tuesday July 27, the new Minister for security, Maj. Gen. Jim Muhwezi made a humbling return to the headlines of Ugandan news media when he made a statement to parliament regarding the controversial vehicle tracking deal between Uganda and a “bankrupt” Russian company. Muhwezi was just one month into office but as he made the statement before parliament, many of those listening and watching were unaware that he was possibly the victim of a sternly worded letter written to him by President Yoweri Museveni regarding the deal with the Russian company, M/S Joint Stock Company Global security. The letter is said to have been drafted by the State House Legal Department headed by one Florence Kiconco who, incidentally, is the wife of one Albert Rugaju; the Uganda representative of the controversial Russian company. For many observers, however, Muhwezi appearing before parliament barely a month after being appointed to respond to queries over suspected corruption in the deal had a sense of déjà vu. For them Gen. Muhwezi was already a marked man. This is partly because Muhwezi was in March 1998 censured by parliament over alleged corruption and influence peddling. Muhwezi, who was Minister of State for Primary Education, was accused of flouting army regulations barring soldiers from doing private business with foreigners and failing to explain his alleged massive wealth. Later in 2007, Muhwezi who was Minister of Health, two fellow ministers and Alice Kaboyo who is now Minister of State for Luweero Triangle and Rwenzori Region were sued before the Anti-corruption Court over alleged misappropriation of Shs1.6 billion meant for activities of the Global Alliance for Vaccines and Immunisation (GAVI). Muhwezi was acquitted but Kaboyo and one minister were convicted. Based on such incidents, many observers quickly concluded that “here we go again.”. On Tuesday July 27, the new Minister for security, Maj. Gen. Jim Muhwezi made a humbling return to the headlines of Ugandan news media when he made a statement to parliament regarding the controversial vehicle tracking deal between Uganda and a “bankrupt” Russian company. Muhwezi was just one month into office but as he made the statement before parliament, many of those listening and watching were unaware that he was possibly the victim of a sternly worded letter written to him by President Yoweri Museveni regarding the deal with the Russian company, M/S Joint Stock Company Global security. The letter is said to have been drafted by the State House Legal Department headed by one Florence Kiconco who, incidentally, is the wife of one Albert Rugaju; the Uganda representative of the controversial Russian company. For many observers, however, Muhwezi appearing before parliament barely a month after being appointed to respond to queries over suspected corruption in the deal had a sense of déjà vu. For them Gen. Muhwezi was already a marked man. This is partly because Muhwezi was in March 1998 censured by parliament over alleged corruption and influence peddling. Muhwezi, who was Minister of State for Primary Education, was accused of flouting army regulations barring soldiers from doing private business with foreigners and failing to explain his alleged massive wealth. Later in 2007, Muhwezi who was Minister of Health, two fellow ministers and Alice Kaboyo who is now Minister of State for Luweero Triangle and Rwenzori Region were sued before the Anti-corruption Court over alleged misappropriation of Shs1.6 billion meant for activities of the Global Alliance for Vaccines and Immunisation (GAVI). Muhwezi was acquitted but Kaboyo and one minister were convicted. Based on such incidents, many observers quickly concluded that “here we go again.” Muhwezi’s defense Muhwezi told parliament the three issues regarding the deal raised in print, electronic, and social media were concluded before he took office. Muhwezi said the areas of concern were that Uganda has signed a contract with a firm facing insolvency/bankruptcy charges in Russia, that public money was committed without due diligence; meaning without examining the Russian company’s capacity, and that the personal privacy of Ugandans would be invaded when tracking devices are fixed on the motor vehicles and motor cycles they own or drive. Muhwezi told parliament the Russian company had assured the Uganda government that allegations that it was facing insolvency/bankruptcy charges in Russia were the work of rival firms to tarnish its image. He said, in any case, the agreement with the Russian company provides for termination of the agreement “if a competent court has issued a decision declaring the contractor bankrupt (insolvent) or liquidated.” “Once we have concrete evidence that the firm has been declared bankrupt, GoU will then invoke this provision,” said Muhwezi who is a lawyer. Muhwezi explained that no money from the government of Uganda was risked in the contract because the agreement stated clearly that the Russian company will at its own expense, design, install, and operate the tracking system. He said, under the agreement, the Russians would only be paid a fraction from the money they will raise from traffic offenders identified by the tracking system. On the issue of intrusion of personal privacy upon fixing tracking devices on every number plate, Muhwezi said the agreement does not offend the data privacy laws of Uganda and is covered under the Data Protection and Privacy Act of Uganda. Muhwezi explained that due diligence was done on the company. “On the basis of this report, my predecessor and the above mentioned firm entered into a Memorandum of Understanding to operationalize the ITMS,” Muhwezi told parliament. According to a briefing document to the new Minister for Security dated June 23, 2021 which we have seen, in December 2018, President Yoweri Museveni dispatched a due diligence team to Russia led by Engineer Gerald Lutu from the National Enterprises Corporation (NEC) which is the manufacturing arm of the UPDF and Noah Baalessanvu from the Ministry for Security to specially eliminate fears noted by the technocrats. The President directed the team to check whether the tracking system can easily be hacked, is not independent of the Russian state as this would pose a sovereign risk to Uganda, and finally if the Russian company does not exist or lacks experience. The team returned to Uganda on December 24, 2018 and reported that the Russians were well established and able to do the work. But clearly that was over two years ago and that status appears to have changed. Muhwezi’s mistake Muhwezi is right to apportion responsibility for the project to his predecessor, Gen. Elly Tumwine. But that is only up to a point. The bigger question for Muhwezi is why he hurriedly, and some would say recklessly, signed an agreement that his predecessors had shelved for four years? Why were questions raised by technocrats; especially from the ministry of Finance, regarding the intricacies of the financial model described as “unnecessary questions” in one of Muhwezi’s memos? Why was the clause of piloting the project first thrown out? A February 26, 2019 memo from the then-Deputy Attorney General, Mwesigwa-Rukutana to then-Minister for Security, Elly Tumwine, raised some of the issues now causing trouble for Muhwezi. It pointed out the lack of background information regarding the Russian company and how it was sourced without following even the most basic Public Procurement and Disposal of Assets (PPDA) procedures. It questioned whether legal, commercial, technical due diligence was done on the company. It noted that even basic information about the Russian company such as its operations, address, and legal status etc. were missing. It also pointed out that, under the current law, motor vehicle registration is the mandate of the Ministry of Works and Transport and not Ministry of Security. This means Muhwezi, as Minister for Security, should not have been the one pushing the deal. Various correspondences between the political heads and technocrats involved in the project show that from the beginning when he first pushed for JSC Global Security in May 2018, President Yoweri Museveni was in a rush to see the project implemented. This was soon after the Arua Municipality MP Ibrahim Abiriga was assassinated in June 2018. By this time, a number of prominent people had been shot-dead assassination style. They included AIGP Felix Kawesi, Maj. Muhammad Kiggundu (2016), Assistant Director of Public Prosecution Joan Kagezi (2016), and DPC Mohammad Kirumira (2018). Most of the assassins sped away on motorbikes and murder by shooting was seen to be on the rise. So the Russians were invited to meet Museveni chap-chap in September 2018. In March 2019, an MOU was signed between the government and the Russians and in September 2019, feasibility was completed and awaited approval by the Solicitor General. Despite Museveni’s rush, however, the technocrats dilly-dallied and left project plans on the shelves between September 2019 and August 2020. No Ministry or department was willing to take responsibility and sign on dealings with the Russians. According to several documents, the technocrats noted that there was lack of transparency and information sharing around the project. The project’s accounting office; the Secretary Office of the President, Yunus Kakande, was only brought in around February this year despite the project planning starting in 2018. Many technocrats, apparently, did not see the benefits being proposed under the project; such as gathering real time intelligence, revenue generation, and national vigilance. The technocrats noted that the proper procurement process had not been followed and that the project was too big for one entity to implement and needed to be broken up so that each ministry or department handles a part under its mandate. They also said the strategic benefits of the project are not clear. The technocrats wanted Third Party Insurance not to be linked to the project and also noted that implementation of the project requires new laws to be passed by parliament and statutory statements by relevant ministries; including the Ministry of Finance. Enabling the tracking devices to be installed on private vehicles will require a new law. The new system will also have to be connected to the existing CCTV system