By Judith Alowo
Kampala: The Auditor General has recommended an investigation at the Uganda Railways Corporation following the mismanagement of a case involving the theft of railway material.
Reports indicate that a Chinese company, Tian Tang, was found in possession of railway material, and a case was reported in court.
However, in a twist of events, Uganda Railways withdrew the case, allegedly for an out-of-court settlement.
“During the year, the Managing Director of Uganda Railways Corporation (URC) instituted an investigation on the stolen and recovered railway materials from two steel companies,” the Auditor General wrote in his 2022/2022 report.
“However, the review of the investigation reports and other documents related to stolen and recovered railway materials revealed that URC went into an out-of-court settlement, which resulted in a total compensation loss of UGX 12.76 billion from both the two steel companies and an indication that the legal cases were mismanaged,” he adds.
The report indicates that URC gave excuses such as “it is difficult to prove that the two companies were responsible for vandalizing sections of the line, yet the materials recovered were not for the whole section.”
In the end, “The factory in Mukono negotiated to pay less as it claimed to be on the verge of bankruptcy due to COVID-19.”
This did not go well with the Auditor General, who advised the Board to review the process of out-of-court settlements to ensure transparent and verifiable procedures.
“In the event that collusion is identified, appropriate action, including recovery measures from responsible parties, should be instituted,” the Auditor General wrote.
URC sued a Chinese firm, Tian Tang Group Limited, for alleged theft and vandalism of railway materials valued at more than Sh12 billion.
URC accused Tian of destroying 14 tons of railway materials that were recovered from the Chinese factory in Mbalala, Mukono district.
The evidence before the court indicated that URC, which is in charge of maintaining all railway infrastructure, installations, locomotives, and equipment on behalf of the Ugandan government, faced the challenges of vandalism on a number of occasions.
“Following a tip-off and a court-sanctioned search of the defendant’s/Tian Tang premises at Mbalala Mukono conducted by the Uganda police, 14 tons of the plaintiff’s railway materials and equipment were recovered at the defendant’s aforesaid premises and in a state where they were not re-usable, neither could they be reinstalled by the plaintiff, thereby occasioning the plaintiff colossal financial loss,” read the suit.
In 2021, Mukono grade two magistrate Steven Waidhuuba issued an order to search the premises of Tian Tang for rail sleepers, steel rails, and Kyaci materials.
According to URC, Tian had converted some of the materials for different uses.
“The plaintiff shall aver and contend that all of the said actions of the defendant were illegal, callous, criminal, detrimental to a public good railway works infrastructure, and in most material particular, the defendant facilitated vandalism of the plaintiff’s railway installations, equipment, and materials by providing a black market for the same reason for which the plaintiff shall propose to the court that the defendant be condemned to punitive damages,” the suit added then.
It is not clear how the above case was withdrawn from court.