Minister Bramukama says the facilities will be used by the government for several activities including monitoring and fitment of digital registration plates.
Motor vehicle inspection and testing company, SGS Uganda Ltd has handed over seven Vehicle Inspections Stations to the government following the termination of their Mandatory Vehicle Inspection contract in 2020.
After the termination, an evaluation process for the buyout of the company commenced and the Cabinet decided to compensate SGS of their total investment in 2023.
According to the Ministry of Works and Transport, the compensation amount of 109.9 Billion Shillings was arrived at.
Following the payment of the first 30 billion Shillings, the company was supposed to reinstall the vehicle inspection equipment, which has now led to the completion of the handover of the facilities by SGS to the Ministry.
The government is in advanced stages of reinstating mandatory motor vehicle inspection.
In 2015, the government signed a contract with SGS (Societe Generale De Surveillance) of Switzerland to carry out routine mandatory vehicle inspection, however, the agreement was terminated shortly, after Parliament found irregularities in the manner in which it was signed.
According to Fred Byamukama, the state minister for transport, the Cabinet approved the payment of 109 Billion Shillings to the investor in compensation.
The cancellation of the contract followed a parliamentary probe report that followed concerns over the way the contract procurement was made. It then pointed out several questionable clauses, especially regarding costs to motorists which the MPs said were unfair and prohibitive.
They reported what they called evidence of connivance between top Ministry of Works officials and SGS in contravention of the provisions of the Public Procurement and Disposal of Assets laws.
They stated that it was wrong for ministry government officials to work as consultants to the contractor and at the same time negotiators for the Ministry.
Another query was why the contract was drawn without the oversight of the Attorney General after the Solicitor General said he was not part of the processes as should have been.
Another clause provided for automatic renewal of the contract for another five years upon satisfactory performance, and for the monopoly and protection of SGS’s exclusive rights throughout the contract period, unfairly locking out local companies to compete.
On finances, the report cited clause 4.1 of the contract that required SGS to pay a monthly 10 percent of the gross turnover payable every month.
However, by the time of the investigations, the contractor had yet to clear 214,026,695 Shillings concession fees in addition to VAT worth 385,248,032 Shillings.
The Stations are located in Gulu, Kawanda, Nabbingo, Namanve, Namulanda, Mbale and Mbarara, which will now be integrated under the Integrated Transport Monitoring System (ITMS).
These stations will be used for mandatory motor vehicle inspection and as fitment centres for Digital Registration Plates under the ITMS Project, according to the ministry.
“This will in turn improve road safety and protect the environment through the mandatory inspection of all vehicles in the country for roadworthiness and environmental compliance.”
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