The Ugandan government has agreed to pay a staggering Shs 109.9 billion to M/S SGS Company as compensation for the termination of their mandatory vehicle inspection contract in 2020.
The contract was initially awarded to SGS in 2015, with the company tasked with conducting mandatory motor vehicle inspections across the country. However, the contract was cancelled in 2020 following allegations of corruption and irregularities.
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Despite the cancellation, SGS claimed that they had invested heavily in the project, including the installation of vehicle inspection equipment at various locations across the country. The company demanded compensation from the government for the losses they incurred.
After negotiations, the government agreed to pay SGS a compensation package of Shs 109.9 billion. The payment is being made in installments, with 30% of the total amount already disbursed.
The Permanent Secretary of the Ministry of Works and Transport, Waiswa Bageya, confirmed that the government had agreed to pay the compensation to SGS. According to Bageya, the payment is for the installed vehicle inspection equipment that was never put to use.
SGS had initially demanded a much higher compensation package, reportedly in excess of Shs 200 billion. However, the government managed to negotiate the amount down to Shs 109.9 billion.
The compensation payment has raised questions about the government’s management of public funds and its commitment to transparency and accountability. Critics argue that the payment is excessive and could have been avoided if the government had properly managed the contract.
