Russian company, M/S Joint Slock Compony Globol Security, will take the biggest share of the money paid as fines by Ugandan road users.
The fines, being charged under the recently launched Automated Electronic Penalty System (EPS), form part of the Intelligent Transport Monitoring System (ITMS).
The EPS is being implemented for traffic offences like over speeding, red light violations, and other breaches captured by automated number plate recognition (ANPR) cameras.
Motorists have been complaining about hefty charges, and unreasonable speed limits, and multiple fines levied a day, most of which attract large surcharges.
But an agreement between the Government of Uganda (GoU) and the Russian firm Joint Stock Company Global Security indicates that the heavy fines have to be paid so that the investor can have his money as shown in the revenue sharing agreement.
Up to 80 per cent of the revenue generated from traffic fines will be given to the Russian firm Joint Stock Company Global Security.
Government of Uganda will get 15 per cent while National Economic Council (NEC) will have five per cent. Over a period of 10 years, traffic fines are expected to generate USD 510 million (about Shs1.8 trillion).
Although opposition MPs on the joint committee of defence, internal affairs and physical infrastructure, which scrutinized the implementation of the ITMS raised red flags on the traffic fines, parliament went ahead and approved the controversial deal for the Russian firm.
The opposition argued that the risk from the deal was high for the government and less for the Russian firm.
“The Committee observes that, the private firm will take the largest share of revenues from fines of 80% compared to the government’s 20%,” wrote the MPs in their minority report, seen by The Pearl Times.
“However, the revenue sharing is not proportional to the risks borne by the shareholders. The only risk the private company faces is low revenues, which is well mitigated in the assumptions to guarantee a return. However, the revenue-sharing arrangement does not consider the various risks the government faces including hate and rage from the populace. This will imply that the private investor will use all the government facilities including land for almost free and take all the revenue.”
The other concern was that government would not reap as much from the deal.
“The model proposes that government will share only on revenue generated from fines, leaving out the other revenue source from services i.e. number plates and other services which is to the tune of USD 486,017,392.21,” the report, seen by The Pearl Times, further read.
“This implies that Government won’t get any share from this revenue stream leaving the whole of it to the investor hence leading to a huge revenue loss to the Government Uganda.”
It should be remembered that the awarding of the juicy digital number plates deal to the Russian company was as controversial as it was suspicious. First, when its details came out they were as shocking as the revelation that the company was bankrupt. (See Details Here, There and Over There).
Then the questionable but juicy multi-billion deal led to an ugly fight between two of Museveni’s ministers, both former bush war fighters. One of the ministers even claimed that the mafia at State House had hidden a letter he wrote to Museveni exposing the dirt in the digital number plates’ deal. (See Details Here and There).
For comments on this report, story tips or sponsored content, send us a Whatsapp message on +256 705 690 819 or E-mail us on pearltimesug@gmail.com).
Please Follow our Whatsapp Channel for More Stories Here
