Current and past executives of Uganda Airlines should be punished for mismanagement and flouting procurement regulations, MPs have recommended.
In a 50-page report seen by this publication, MPs on the Commissions, Statutory Authorities and State Enterprises (Cosase) committee say the airline’s chief executive officer Jennifer Bamuturaki, who has since changed her name to Jennifer Lenkai, should refund Shs156 million paid to online bloggers to burnish her reputation and that of the national carrier during a recent storm of bad publicity.
MPs say the controversial contract flouted procurement regulations and was mired in influence peddling. The name Lenkai, the report details, is linked to one Mark Arnold Odeke Lenkai, the chief executive of a public relations company—Abbavater—which Uganda Airlines hired in April 2019 to organise a function for receiving the first two Bombardier aircrafts. Abbavater was paid Shs779 million for the work.
MPs found that Ms Bamuturaki and Abbavater shared a postal address.
“The committee cited clear conflict of interest and influence peddling from Ms Bamuturaki in the award of the contract to Abbavater Ltd contrary to Sections 8 and 9 of the Anti-Corruption Act,” the report notes.
Ms Bamuturaki was fired as the airline’s commercial director for incompetence on October 24, 2019, but bounced back as chief executive in December 2021. Soon after, she hired a group of online bloggers at a monthly fee of Shs13 million without the knowledge of the company secretary.
The report details that Ms Bamuturaki then sanctioned payment of the bloggers Shs117m upfront backdated from April 2021 (when she returned office) to December 2019. The airline’s company secretary denied knowledge of the contract and did not sign it off as required.
“Management never discussed the need for online bloggers; it was a unilateral decision by the CEO to hire them, no wonder they focused more on fighting personal battles for the CEO, including disparaging Parliament,” the report notes.
“The online bloggers were hired outside the procurement guidelines envisaged under the [Public Procurement and Disposal of Assets] Act.”
Cosase kicked off hearings into operations of Uganda Airlines in July following red flags raised by the Auditor General. The committee wound up its probe in September but Parliament was sent on a month-long recess before it could present its report.
The leaking of the report before it could be tabled before the House came up during the plenary session on Wednesday. The Speaker of Parliament, Anita Among, tasked the Leader of Opposition Mathias Mpuuga to provide a report of circumstances of how the Cosase probe report leaked to the media.
“How do you leak a report before it is discussed? Why do we discuss what has gone out?” Ms Among wondered.
The Cosase hearings spotlighted operations of the national carrier dogged by scandals since the company was incorporated in 2018.
The airline has had three chief executive officers and two boards of directors since. The last board was sent packing early last year to pave way for an investigation into corruption and flawed procurement deals.
Cosase’s recommendation will test Parliament’s ability to stand up to the Executive, especially as Ms Bamuturaki was confirmed into the top job in July 2022 on President Museveni’s orders.
The [re]appointment came just after the UACL board had paid consultancy firm, PWC Shs98.1m to hire a new chief executive. Cosase says this was a “wasteful expenditure” which should be “recovered from individual board members.”
While the Auditor General put Uganda Airlines’ loss in Financial Year 2021/22 at around Shs232 billion, Cosase says it is almost twice as much, around Shs500b.
“The company’s losses and the ratios computed are an indication that UACL is currently not performing well in terms of profitability and ability to sustain the provision of services without further government intervention for funding and management strategies to improve revenue generation,” the report details.
Officials attribute the losses to the coronavirus pandemic which froze air travel for almost two years. However, MPs say the losses were made worse by the lack of management systems at the airline’s inception, including flawed recruitment, financial management and procurement processes.
In addition, the airline’s strategic business plan is not in sync with the National Development Plan III.
Cosase wants middlemen eliminated from the airline’s fuel procurement chain. They also want Ms Bamuturaki held accountable for the non-remittance of Shs16b as outstanding arrears for more than six months, and for the lack of a proper inventory of the airline’s assets in contravention of the Public Finance Management Act.
The committee highlighted several flawed procurements for which it recommended officials—past and present—to be reprimanded. The committee also wants further investigations into an alleged internal racket of phoney ticketing. MPs discovered 908 passengers with tickets worth Shs982m which were missing from the reported revenues.
The Daily Monitor
