MPs want driving permit contract reviewed
MPs on the Public Accounts Committee (PAC) want the Ministry of Works and Transport to review the renewed contract awarded to Face Technologies Ltd, the company that was contracted to issue driving permits.
A review of the contract, the MPs believe, will reduce the overhead costs following a discovery by the Auditor General John Muwanga that the contractor is spending nearly 21% of the contract amount on rent but continues to claim that they have failed to recoup the money invested in the project.
According to the Auditor General’s June 2017 audit report, between February 2011 to November 2016, Face Technologies spent $1.4m (Shs 5.1bn) to rent a warehouse facility at Kyambogo for its offices.
The rental expenditure translates to 21% of the total contract amount $6.8m (Shs 24.8bn) as at November 2016.
The rental expense is bound to significantly increase given that the contract has been extended to 2020.
The Auditor General blamed the Ministry of Works for not doing enough to save government revenue yet several alternatives would have been sourced from within government.
Muwanga pointed out the former AGOA facilities in Bugolobi or former works offices in Entebbe which would have served the purpose, instead of extending the contract due to rental expenses.
Muwanga told MPs that the high rental expenses have significantly delayed the recovery of the outstanding amount of the contractor leading to the contract extensions.
The Permanent Secretary, Ministry of Works Begeya Waiswa, acknowledged that indeed rent was the biggest overhead cost of the project, citing the tenancy agreement for housing the CDP project which provides that the rental costs will increase biannually by 5%.
He said that based on the cost benefit analysis, a decision to construct new premises at Transport Licensing Board was adopted and the facility will accommodate the drivers permit facility and also become a one stop centre office for issuance of licenses for PSVs and driver badges, motor vehicle registration is yet to be implemented.
The Ministry accounting officer told MPs that they envisage that by the time the contract for Face Technologies expires in May 2020, the facility will be ready to shift.