Members of Parliament (MPs) have criticised the National Agricultural Advisory Services (NAADS) for violating the procurement law when it directly procured Horyal Company Limited to support Atiak sugar cane factory.
The MPs on the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) learned that the agricultural body paid Horyal Company Limited Shs15 billion to clear 15,000 acres of bush land in Lamwo district for sugar cane growing.
This was during a meeting with the NAADS Secretariat led by the Executive Director, Samuel Mugasi on Wednesday, 09 August 2023.
The committee is scrutinising the report of the Auditor General on financial statements of NAADS for Financial Year 2021/2022.
Eunice Katto, the NAADS Head of Procurement told the committee that Horyal was directly procured because it was A rainy season and yet the open bidding process is lengthy and time consuming.
“There was also a Memorandum of Understanding between Horyal and the women groups to provide labour,” Katto added.
The Committee’s lead counsel, Hon. Ronald Ndyomugenyi (Indep. Rukiga County) however, said that Katto’s justification did not suffice and violates the Public Procurement and Disposal of Public Assets Act, which requires bidding for a contract of such magnitude.
“Are those the reasons you can give for a direct procurement? What are the conditions in the PPDA Act for direct procurements?” Ndyomugenyi asked.
Hon. Bumali Mpindi (Indep., PWD) wondered why bush clearing qualified for direct procurement adding that Shs15 billion is too high for the said activity.
“What kind of bush clearing is this? is it different from others? Why didn’t you subject it to bidding to allow other companies to participate? Your justification for direct procurement is lacking,” he said.
This prompted the NAADS ED, Mugasi to reveal that the decision was made following a letter from the Minister of Finance, Planning and Economic Development directing the Agricultural body to undertake a direct procurement.
“The first letter was from the Prime Minister requesting us to work with Horyal and then another one in 2018, which talks about financing of sugar cane project,” he said.
In this letter, Mugasi said that the Minister of Finance instructed NAADS to enter into a contract with Horyal and provide funds to complete the sugar cane out growers scheme.
Government is a minority shareholder in Atiak Sugar factory with 40 percent shares.