KAMPALA, UGANDA: Parliament’s Committee on Tourism, Trade and Industry has recommended a forensic audit of the services and supplies, management and financial transactions of Soroti Fruit Factory Limited.
In August 2012, government represented by Uganda Development Corporation-UDC together with Korea International Cooperation Agency-KOICA entered into a memorandum of understanding to invest in the factory, injecting an initial 29.6 billion.
President Yoweri Kaguta Museveni launched the factory in April 2O19, before the factory started commercial operations in October 2019 to add value to the underutilized fruits, address the high post-harvest loses, provide market for farmer’s produce, create job prospects and diversify household incomes in Teso.
However on February 8th 2022, Jonathan Ebwalu, the Soroti City West Division MP raised on the floor of Parliament several allegations of gross abuse of office and resources, unfulfilled financial obligations characterizing the factory.
Accordingly, the Deputy Speaker of Parliament Anita Among directed the committee led by Mwine Mpaka, the Mbarara City South MP to investigate the claims. Under the Rules of Procedure of Parliament, the committee summoned UDC and the factory officials for cross examination prior to their field visit on 16th and 17th February 2022.
From the fact-finding visit, the committee findings unearthed several irregularities among which included rotting of the farmers fruits due to limited capacity of the factory to consume the fruits being harvested and supplied to them.
“The Committee noted with grave concern that farmers’ fruits were rotting as the demand by the factory which was to provide market for the fruits had limited ability to consume all the fruits harvested. Out of utmost frustration, many farmers had truly cut down trees on their farms,” the report read in part.
During their visit, the committee established that UDC also used Willis International Engineers and Construction Limited to defraud government. The engineering firm constructed the factory wall fence and a one kilometre road at a cost of 1.1 billion.
“The committee during the oversight visit observed that the contractor did shoddy work which has left the wall with cracks, sinking foundations and plaster on the walls peeling off,” said the report. They want the Auditor General to carry out a value for money audit and report back to Parliament as soon as possible.
Also, a contract worth 121.8 million between Uganda Investment Authority-UIA and M/S AIM Engineering Uganda Limited was signed to carry out the provision of detailed engineering designs and documentations for 6.4Kms of road at Soroti Industrial and Business Park.
But the design contractor failed to take into account the swampy nature of the terrain that required rock fill which later cost government 269 million to do the rock fill. In spite of that, MG Engineers and Constructors Ltd which was supposed to execute the road works sued UIA for delays which attracted another cost of 342.7 million in outstanding contract balance and 20 million in damages.
Mwine Mpaka, the Committee Chairperson explained that farmers at Gweri sub-county reported exploitation to the committee that a double sack of oranges weighing about 120kgs is bought from them by TEFCU between 15,000-20,000 without weighing, and later the Union sells the same quantity to the factory at 72,000 shillings.
Whereas government which has invested 44.17 Billion as of the financial year end June 2O21, holds 80 percent shares in the factory, the committee was shocked that that TEFCU, which has invested two million owns 20 percent shares of the company without evidence.
The committee was concerned that government has so far invested in the factory a total of 44.1 billion, in addition to the KOICA grant of 29.6 billion, yet the venture has not yielded any profits casting doubts whether the factory may sustain itself.
Notably, the government through UDC procured and delivered 240 motorized spray pumps for the factory at a total contract sum of 528 million. The committee established that TEFCU undertook an irregular process charging farmers 200,000 shillings per pump payable to the Board of Teso Farmers’ Cooperative Union.
According to Mwine, Teso Farmers’ Cooperative Union should refund each of the farmers’ money amounting to 200,000 that was charged per pump or be prosecuted for extortion, obtaining money by false pretense, corruption and theft among others.
The committee recommends that a fully constituted board of 5 members be appointed with immediate effect as opposed to the current interim board consisting of 3 members who have served over 2 years on interim basis, and contracts of all the staff reviewed.
They also want Inspectorate of Government to investigate Douglas Ndawula, the Factory CEO and the entire management for possible inflation of the cost of operations and other related expenditures. For instance, the public relations and advertisement costs incurred 722 million to generate annual sales of 818 million, implying he spends about 60 million every month to generate 68 million.
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