290 companies were erroneously contracted by South Sudan – World Bank
The select committee on South Sudan compensation is probing Uganda’s possible role in the infamous dura saga in which companies that received payments for cereals from the South Sudan government never delivered them.
The South Sudan government reportedly paid up to $1 million (Shs 3.7 billion) to hundreds of domestic contractors to supply food to state governments ahead of a projected famine in 2008.
Under the purchase, the government had sought to up a stockpile of dura (Sorghum), a staple of the South Sudanese diet. However, the food was never delivered, starting what was later referred to as the Dura saga.
A team of World Bank auditors established later that 290 companies were paid without signed contracts and another 151 were overpaid. It has since been established that many of the companies involved lacked the capacity to source the required amounts of grain, while others displayed high-risk red flags. Subsequent investigations have indicated that several of the companies involved were shell companies set up days and in some cases even hours, before being awarded contracts.
The committee on South Sudan compensation has now said that it will be reviewing the matter to ascertain whether there were Ugandan companies involved in the rip off and if any of them is now claiming compensation for supplies that were never made. It is also seeking to establish whether the government of Uganda knew about the scam.
Committee chairperson Ann Maria Nankabirwa says their intention is to find out whether some suppliers from Uganda could have supplied hot air, and are now making claims.
“When South Sudan established a food reserve, and earmarked money for it, it was abused. Some people supplied air; that is our investigation. Some people supplied air, others overshot their contracts, and the money on the vote got exhausted, the country ran into problems. That is why you find that somebody had a cheque… there were some guarantees in the banks, that the banks could not honour,” Nankabirwa said.
The committee has in recent weeks been reviewing a payment of $41 million (Shs 152 billion) advanced to 10 Ugandan companies that supplied goods and services to South Sudan between 2008 and 2013 when war broke out.
The 10 companies, under the Uganda South Sudan Grain Traders and Suppliers Association Ltd, supplied maize and sorghum to 10 South Sudan states under the Strategic Grain Reserves Suppliers for $56 million (Shs 208 billion) between 2008-2010.
Under the agreement, the money was to be paid in five installments. However, the South Sudan government only paid the first installment of $15 million (Shs 56 billion), leaving a debt of $41 million (Shs 152 billion) prior to the outbreak of the civil war in 2013.
The government has since secured parliamentary approval to clear the debt on behalf of the South Sudan government to traders who have been verified. The South Sudan government will then pay back the money based on a repayment schedule agreed upon in a five-year Bilateral Agreement that runs from 2018- 2022.
These companies that were subject to the 2010 Memorandum of Understanding between Uganda and South Sudan include Rubya Investments, Kibungo Enterprises, Aponye (U) Limited, Afro Kai Ltd, Swift Commodities Establishment Ltd, Sunrise Commodities, Ms Sophie Omari, Apo General Agencies, Ropani International and K.K Transporters.
Others that were not included on the list include; Roko Construction Company, Ake-jo General enterprise, JB Traders, Odyek Ejang Company, Dott Services, Gunya company limited, Premier company, MFK company among others.
The committee had earlier said that they had plans to meet South Sudan Government officials on the compensation.
Meanwhile, suppliers have called on the government to expedite the process of compensation saying they are losing their property and many of them getting out of business.
According to Geoffrey Okwir Gunya, who is demanding up to $88,000, several Ugandans have lost their capital and investments because of the nature of trading in South Sudan. He said Parliament should speed up the process to ensure that the traders are compensated equitably.