President Museveni (in white)disembarks from one of Uganda Airlines CRJ900 Bombardiers at Entebbe International Airport in 2019. PHOTO/FILE
The Uganda Airlines revival process has been hit by turbulence forced
by major fights involving top management and board of the national flag
carrier and officials at the Ministry of Works and Transport.
The
groups have clashed over jobs, money and multimillion procurement deals
involving media and publicity services, jet fuel, uniforms and control
of agencies outside Uganda to manage ticket sales for the corporation.
Sunday Monitor has learnt that the fights began even before August 2019 when the airline launched operations with flights from Entebbe to regional destinations Nairobi, Mombasa (Kenya), Mogadishu (Somalia), Juba (South Sudan), Bujumbura (Burundi), Dar es Salaam and Kilimanjaro (Tanzania).
The
fights culminated in suspension on April 28 of top management team,
including chief executive officer Cornwell Muleya, finance director Paul
Turacayisenga, director of marketing Rogers Wamala, human resource
manager Joseph Sebbowa, and director of safety Bruno Oringi.
A week
later, the seven-member board of directors led by former junior minister
for Local Government, also former Rubanda East MP Perez Ahabwe, were
also sent packing.
Along with Mr Ahabwe also exited Benon Kajuna, Mr
Godfrey Ssemugooma, Ms Catherine Asinde Poran, Ms Rehema Mutazindwa, Mr
Charles Hamya, and Mr Stephen Aziku Zua.
The suspensions, Sunday
Monitor has learnt, were forced by multiple dossiers sent to President
Museveni by all interested parties.
In the immediate aftermath of
the suspensions, the former minister of State for Transport, Ms Joy
Kabatsi, under whose supervision the airline fell, indicated she too had
been taken by surprise.
“I had called the board and the executive
director for a meeting but they did not turn up. I did not hear from
them again, only to hear what you are hearing,” Ms Kabatsi told Sunday
Monitor earlier this month.
A few days later, the outgoing Works and
Transport Minister, Gen Edward Katumba Wamala, said the group had been
forced to take accumulated leave.
But on Monday last week, while
addressing MPs after the election of the Speaker and Deputy Speaker of
Parliament, President Museveni revealed that it was on his instructions
that the management team and the board were sent packing.
“The
airline was infiltrated immediately (it was revived) by some corrupt
elements – employing their relatives, overbudgeting, inflating
procurement costs, terrible! Terrible things! When I got the
information, I dispersed the whole group,” Mr Museveni said.
But which terrible things did the management and the board commit?
Procurement fights
In
his speech on Monday, Mr Museveni simply said the senior managers and
members of the board had been dabbling in inflation of procurement
costs, but if the contents of a January 27 report that Mr Muleya handed
to Gen Salim Saleh for onward transmission to the President is anything
to go by, the problem is perhaps much bigger than the President made it
appear.
Mr Muleya indicated that some members of the board had
been pushing “for the promotion of self-interest” and in other cases
colluded with some managers to make quick bucks.
“In procurement
specifically, management has witnessed cases where board members have
met with some members of the management team with a view to find[ing]
ways of invoice loading and other money-making schemes…This attempted
collusion... has tended to divide the management team and has brought
inefficiency...” he wrote.
Ms Joy Kabatsi and Gen Edward Katumba
Mr Muleya further pointed out that procurement managers have been colluding with people in government to steal from the airline.
Mr
Ahabwe, the chairperson of the board of directors, declined to be drawn
into a discussion about the accusations made by Mr Muleya.
“Merits
or demerits of his allegations have been overtaken by events. The
President has already suspended all of us and instituted an
investigation. What you are talking about is part of the issues under
investigation. If we invoke the principle of sub judice, we will be
interfering with the investigation,” he told Sunday Monitor on Friday
evening.
Mr Ahabwe, however, revealed that he, together with other
members of the board, had written to the President and copied in
ministers of Finance, and that of Works and Transport, rebutting some of
the accusations levelled against them.
Sunday Monitor was able to access a copy of the said letter, in which the board explained that the standoff between Mr Muleya and the board was as a result of the board’s decision to query the extremely high insurance premiums that the airline has been paying to insurance agents.
“The board directed the management to present justification for the high prices being paid to contractors, some of whom were procured in an uncompetitive manner…It is probable that such board inquiries and formal direction to the management to review the above contracts is being perceived as interference in the procurement process,” the board’s document read in part.
READ: Uganda Airlines CEO, top bosses suspended
Minister Kabatsi case
Two
days after the suspensions of the board and management team had been
announced, Ms Kabatsi revealed the executive was not happy with the
airline’s post-lockdown recovery.
“There are problems with the
airline. Reports from there have not been good for a long time now. We
are not moving in the way that we would have wanted to move. We needed
to have the planes moving. The planes should not be parked,” Ms Kabatsi
said.
The board is, however, of the view that Ms Kabatsi’s comments were driven by ill feelings.
“The
recent outbursts by Ms Kabatsi… is derived from the fact that in
December 2020, she did not only call the chief executive officer
demanding $50,000 (about Shs177m) to fund her campaigns for MP, but sent
her personal assistant in person to the airlines head offices in
Entebbe to pick up the money from the chief executive officer…” the
document further reads.
Ms Kabatsi denies the accusation, saying she found Mr Muleya very rude and difficult to engage on anything other than work.
“You can only ask when you are friendly. Somebody you don’t talk to, how do you ask for money?” Ms Kabatsi asked.
In
the same document, members of the board accused Ms Kabatsi of meddling
in the process of recruiting an Ethiopian national, a one Abebe, and
trying to halt the process of recruiting a new commercial director
following the firing in October 2019 of Ms Jennifer Bamuturaki Musiime
on grounds of poor performance and conflict of interest. Ms Kabatsi
denies that too.
“Did I force them to hire him? I do not even know
the person they are talking about. We were just looking at the CVs,” Ms
Kabatsi said.
Media and publicity
One of the
biggest causes of friction has been management of the lucrative media
and publicity docket, which falls under the commercial directors’
office.
According to the board, the directorate blew up
Shs778,728,483 for hosting 600 people when the airline received the
first CRJ900 Bombardier.
The average unit cost of maintaining each guest stood at Shs1,297,876, which the board said was excessive.
Most of the money is believed to have been swindled by sections of the management team.
More of the cause of tensions at the airline are expected to be revealed when the ongoing investigation ends.
Fight for jobs
Sources
familiar with the revival of the national flag carrier have since
revealed that senior government officials and highly connected people
started lining up their children and relatives for jobs in the national
airline almost immediately after the June 23, 2016 inaugural address to
the new Cabinet. The President had then directed then Works minister
Monica Azuba to resurrect the airline.
Sunday Monitor has learnt
that before the airline put out its first advertisement in September
2018 inviting applications for several positions, a senior Uganda
People’s Defence Forces (UPDF) General handed one of the ministers a
list of names of people who he said were qualified to be employed by the
airline.
The matter of staff recruitment is said to have become a
subject of heated exchanges, which resulted in a decision by Cabinet to
allow the airline use both headhunting and interviews as a means of
hiring its staff.
According to sources at the airline, one of the ministers had initially struck a deal with a local firm to supply the airline with fuel, but the board shot down the deal on grounds that the terms were not favourable as the local firm was demanding advance payments after every two weeks
The fights for jobs have, however, continued to be a major cause of clashes between the top management and the board.
Mr Muleya alluded to this problem in his report.
“Internally,
our areas of concern on the recruitment angle are two-fold - the
involvement of the board at all levels of recruitment, which has tended
to make the recruitment processes slow and labourious to meet the needs
of a commercial entity like an airline,” Mr Muleya wrote.
Inflated air tickets
According
to the board, some of the agencies who were recruited were found guilty
of selling tickets at inflated prices and pocketing the margin. An
audit report, attached to the board’s report indicates that the airline
lost $26,991 (about Shs95m) between August 2019 and February 2021.
“Some
of the general service agencies that were recruited outside Uganda were
involved in a money-making racket. The person who appointed them was
making sure only people who would engage in mischief would be
recruited,” the source revealed.
Jet fuel
According
to sources at the airline, one of the ministers had initially struck a
deal with a local firm to supply the airline with fuel, but the board
shot down the deal on grounds that the terms were not favourable as the
local firm was demanding advance payments after every two weeks.
“The
airlines management [then] went to Dubai, United Arab Emirates, and
procured MixedJet, which was offering a better deal. That set the
management on a collision course with the minister, the source revealed.
But the board is now questioning the rationale for the procurement of MixedJet, which they claim is supplying fuel at a higher cost. The board is recommending that a local firm be procured. Such a move, it says will help the airline save between 10 and 20 per cent of what it is paying on fuel.
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