IN PRESIDENT’S HANDS: Museveni to Decide Fate of Russian Company as Ministers Disown it Amidst Deepening Digital Number Plates Scandal

The fate of the Russian company at the centre of Uganda’s controversial digital number plates project is increasingly hanging in the balance after two senior government ministers told Parliament that the firm has failed to meet key obligations under its agreement with the Ugandan government.

Attorney General Dr Sam Mayanja has gone even further, telling lawmakers that he sees no legally binding contract between the State and M/S Joint Stock Company Global Security (JSCGS), the Russian firm contracted to implement Uganda’s Intelligent Transport Monitoring System (ITMS).

Defence Minister Kiryowa Kiwanuka separately told the same parliamentary committee that JSCGS had failed to properly involve the National Enterprise Corporation (NEC), the commercial arm of the Uganda People’s Defence Forces, despite the corporation’s central role in the original arrangement.

The two ministers’ submissions have added fresh weight to Parliament’s increasingly critical examination of the 2021 agreement and placed the future of JSCGS’s involvement in Uganda before President Yoweri Museveni.

The Attorney General’s position was unequivocal.

“Before I came here, I looked through this contract. I think this contract from the onset contradicts many provisions of our existing law,” Dr Mayanja told MPs on Parliament’s Committee on Physical Infrastructure. “I don’t want at this point to go into a detailed reply to a contract which you know I know needs a lot of overhauling.”

The committee, chaired by Mbarara City South MP Mwine Mpaka, pressed Mayanja to explain the legal consequences of the defects he had identified.

He maintained that some of the problems went to the foundation of the agreement itself rather than being ordinary contractual disagreements.

“There are those things which go to the fundamentals of the contract itself which don’t exist here,” said the Attorney General. “I think I would go ahead and say, as Attorney General, ‘I see no contract here to comment on.’”

He emphasized: There is no contract which binds the State of Uganda because none of the conditions which go to the root of the matter have been fulfilled.’”

That assessment has potentially far-reaching consequences for JSCGS because the company’s operations in Uganda are based on an agreement signed with the government on July 23, 2021.

The deal was intended to establish the ITMS, including the production and deployment of mandatory digital number plates, vehicle-tracking infrastructure, cameras and other equipment designed to improve vehicle identification, crime detection and monitoring.

Under the arrangement, JSCGS was expected to finance, build, operate, maintain and upgrade the system before eventually handing over an operational platform at the end of the contract period.

But as Parliament investigates the project, questions are now being raised about whether the original agreement itself met the legal and technical requirements necessary for such a major government undertaking.

Mayanja is not the only senior government official to have raised concerns about JSCGS.

Defence Minister Kiryowa Kiwanuka told the committee that NEC, which was expected to participate in the project, has effectively been excluded from its implementation.

“NEC has never been effectively involved in the implementation or operation of the ITMS project,” Kiwanuka, Mayanja’s immediate predecessor in the office of Attorney General, submitted. “The land provided by NEC was not utilized for the intended project, and NEC has not been integrated into the implementation and operation as contemplated under the Cooperation Agreement.”

The omission is significant because NEC was not merely expected to provide land.

According to Kiwanuka, the corporation was supposed to participate in the project and acquire the technical and operational capacity necessary to play its designated role.

Its exclusion has also affected its expected financial returns.

NEC was supposed to receive five percent of revenues generated from fines and penalties under the arrangement. But Kiwanuka said the corporation has been unable to exercise its contractual rights because it was never properly integrated into the project.

“The failure by JSCGS to undertake the agreed obligations necessary to operationalise the partnership and involve NEC in the ITMS project raises significant concerns regarding non-performance and material breach of the cooperation agreement,” he said.

The Defence Minister’s testimony therefore places a second senior government voice on record questioning the way JSCGS has implemented the project.

JSCGS, however, has rejected the suggestion that it has abandoned its obligations.

The company’s representative, Damir Makhmutov, told MPs that technology transfer and training were already taking place, although he said formal transfer of the technology would occur later in the contract.

“Transfer of technology begins in 2031, but training has already started,” said Makhmutov.

“Ugandan staff make kits and install and maintain equipment and camera complexes; police officers are trained in Gelios.

By the end of the contract, Ugandan specialists are expected to be able to run and maintain the system on their own.”

The competing accounts have left Parliament with a fundamental disagreement over what JSCGS was required to deliver, when it was required to deliver it and whether those obligations have been met.

The committee’s investigation has also raised questions about the process that produced the agreement in the first place.

Lawmakers have established that no feasibility study was conducted to guide the final formulation of the contract currently being implemented.

That finding is particularly significant given the scale and structure of the project, which commits the government to a long-term arrangement with a single foreign company.

The legal dispute is unfolding against the backdrop of a much broader parliamentary investigation into the digital number plates.

The project came under renewed scrutiny after questions emerged over the cost of the plates, delays in their production and installation, the role of JSCGS and the government’s decision to give the Russian company a long-term arrangement to manufacture and supply the plates.

A new digital number plate for a vehicle was priced at Shs714,300, while replacement plates were set at lower rates depending on the type of vehicle.

The price has become one of the most contentious aspects of the project, with lawmakers demanding a detailed explanation of how the figure was arrived at and what exactly motorists are paying for.

The controversy escalated when government officials gave Parliament conflicting explanations about the pricing.

Two officials were subsequently arrested by Parliament CID officers after questioning over the matter.

The arrests further widened the inquiry from the performance of JSCGS to the conduct of Ugandan officials involved in the procurement, costing and implementation of the project.

JSCGS’s position has also come under scrutiny because the agreement effectively places the company at the centre of Uganda’s digital number plate production and ITMS operations for a decade.

Manufacturers and other stakeholders have questioned the structure of the arrangement, while MPs have sought to establish whether Uganda is receiving value for money from the project.

The parliamentary investigation has consequently moved beyond the simple question of whether motorists should acquire digital plates.

It is now examining how the project was conceived, how the Russian company was selected, whether the contract complied with Ugandan law, whether promised technology transfer and local participation occurred, how the price was determined and whether the government is receiving the benefits for which the system was established.

The NEC question has added another layer to the investigation because it raises questions about whether a Ugandan state entity was denied the role it was supposed to play in a project involving national security and vehicle monitoring.

With Mayanja questioning the very existence of a binding contract and Kiwanuka raising concerns over JSCGS’s failure to involve NEC, Parliament is now preparing to take the matter to President Museveni.

Committee chairman Mwine Mpaka confirmed that lawmakers have arranged a meeting with the President through the Office of the Speaker.

The committee has also summoned former and current officials who were involved in the procurement and contracting process to explain how the agreement was negotiated, approved and implemented.

The political and legal significance of the parliamentary inquiry has already changed.

What began as an investigation into the cost and availability of digital number plates has developed into a broader examination of the government agreement with a foreign company.

At the centre of that examination is now a striking contradiction: while JSCGS maintains that it is fulfilling its obligations and training Ugandans, the Attorney General says the agreement contradicts existing law, while the Defence Minister says a key government partner has been left out of the project.

With Parliament preparing to present its findings to Museveni, the President could ultimately face a decision on whether the Russian company should continue with the project under the existing arrangement, whether the agreement should be renegotiated, or whether the government should take a different course.

For now, however, JSCGS remains in Uganda under an agreement whose legal foundation the government’s own Attorney General has publicly questioned.

It should be remembered that two top officials were arrested this week over ghost trips and figures as reported Here.

OH UGANDA! Russian Digital Number Plates Maker in Crisis as ‘Tax Payers Lose Shs4bn Weekly’ in Controversial Project

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