SHS12B ELECTION CAR DEAL SPARKS ROW IN UGANDA

 By Eriasa Mukiibi Sserunjogi

KAMPALA.

Big car dealers Toyota Uganda Ltd, Tata Uganda Ltd, Motorcare, Victoria Motors and Cooper Motors, have lost out on tenders to supply vehicles to the Electoral Commission (EC) worth $4,071,375 (about Shs12b) with the biggest winner being a smaller company, causing key industry players to question the process.

An EC document that officially went on display on March 12 shows that Haks Investments Ltd scooped two deals worth $2,215,925 (over Shs6b) in total, which is more than half of the contract sum, with the rest of the deals being shared between four other companies.

The other companies that won supply deals are Mitsubishi suppliers, Victoria Motors ($1,279,650), General Motors’s representatives MAC East Africa Ltd who deal in Isuzu vehicles ($435,000), Nile Fishing Co ($75,900) and Achelis ($64,900).

The other items to be supplied include omnibuses, trucks, station wagons, motorcycles and forklifts. They are meant for use in next year’s general elections.

If the contract is finalised, Haks will supply 15 escort and 38 general-purpose brand new Toyota Vigo pick-ups to the EC at an average price of about Shs100m per vehicle.

Haks says on its website that it was incorporated and licenced in 2006 “with the purpose of providing warehouse, customs clearing and forwarding, tax consultancy, imports and exports and car dealership.”

The company mostly deals in used vehicles.
Car industry players link Haks, which deals mostly in used vehicles, to businessman Hassan Basajjabalaba. But Mr Constantine Opiro, the Haks General Manager, said Mr Basajjabalaba “moved out of the business long ago”. Mr Basajjabalaba could not be reached for a comment on the matter because his known telephone number was unavailable.

The concerns 
The early uproar about the bidding process has centred on Haks, which various industry players say lacks capacity to supply the 53 pick-up trucks and that it did not fulfil some of the contract conditions.

Most people from the different car dealerships we talked to spoke anonymously because they said they intended to challenge the process administratively and later probably in court. An executive at Toyota Uganda, for example, only said: “We have looked at the best evaluated bidder and we have obvious concerns but we shall address them through the right channels.”

Toyota lost out, according to the EC document, because “...the bidder’s delivery period is not specific (it has a condition of subject to stock remaining unsold) and the delivery point of Toyota Uganda Kampala Bond is not in conformity with the required EC headquarters as stated in the solicitation document.”

Toyota Uganda showroom is on 2nd Street, Industrial Area in Kampala, half a kilometre away from the EC headquarters.

The EC said Cooper Motors, who hold the franchise for Ford vehicles, was eliminated for failing to provide manufacturer’s authorisation to supply the pick-up trucks, Victoria Motors, who hold the franchise for Mitsubishi, would take longer than the three months EC provided for to deliver the vehicles, while Motorcare was eliminated for not meeting the air-conditioning requirement. Other big bidders were eliminated for failure to meet the specifications of EC.

Most of the “concerns”, Sunday Monitor has learnt, are based on whether Haks meets some of the requirements stated in EC’s tender solicitation document, a copy of which we have seen.

The successful bidder needed to have manufacturer’s authorisation to supply the goods, had to be in position to offer a two-year warranty and had to have a workshop in Kampala and workshops or service vans in different parts of the country.

The winner also had to have been in the business for at least five years, having handled a contract of a similar magnitude before.

Several industry players doubt that Haks secured the manufacturer’s authorisation to supply Toyota vehicles in Uganda. Toyota Uganda, Sunday Monitor has learnt, officially represents the manufacturers in the country.

Acquiring the authorisation of the manufacturer to supply vehicles in a certain region, industry players say, goes hand-in-hand with being in position to provide warranty for the vehicles.

A mechanical engineer at one of the workshops, who asked not to be named, said manufacturers customise vehicles to certain regions, meaning that vehicles made for the temperate regions will be different in some aspects from those made for tropical regions.

“Cars made for the tropics will have heavier duty suspension than those meant for use in Europe and those made for Europe will have lighter radiators than those made for Uganda,” the engineer said.

He said the danger with not using the official distributor of a car manufacturer is that another distributor may source the vehicle from anywhere in world and in the process probably supply vehicles meant for use in a different region which are not ideal for the environment in the specified country.

This means, the engineer said, such a car being used in a region where it was not meant for use would be more prone to mechanical problems, making it difficult for the manufacturer to provide a warranty for it.

And, he said, should the vehicle be defective and needs to be recalled and replaced by the manufacturer, it may only be possible if it was sold by the manufacturer’s official supplier and in the right region. 

Haks responds
Mr Opiro, the general manager of Haks, however, said the criticism against his company emerging the best evaluated bidder to supply pick-up trucks is driven by “business jealousies”.

He singled out Toyota Uganda for scorn. “Toyota Uganda claims to be the sole distributor of brand new Toyota cars in this country, but how come Walusimbi’s Garage have been supplying the same cars for a very long time?” Mr Opiro said. 
Walusimbi’s Garage also competed for the deal but it was eliminated because it “...gave a condition of 40 per cent initial deposit and (payment of ) balance upon delivery” which the EC said was against the rules.

Speaking to us at Haks’ offices in Industrial Area, Mr Opiro said he would have shown us copies of the manufacturer’s authorisation and the warranty had his boss, Mr Francis Kasumba, who he said is one of the directors, not locked them up in his offices.

He said on Friday Mr Kasumba had already travelled to Thailand to place orders for the vehicles. Haks sources Toyota Vigo pick-up trucks from Thailand.

The EC document announcing the best evaluated bidder, which went on display on March 12, shows that the electoral body intended to sign contracts with the best evaluated bidders after 10 working days, which elapse on March 25. 
This means that during that time anything could happen, including reversing decisions.

Mr Opiro admitted that they do not have a workshop or service van in or outside Kampala, saying they outsource the service.

“The modern way of doing business is that one has to be creative and outsource what he cannot do well,” Mr Opiro said, adding, “Right now we have our Land Cruiser being serviced at Toyota Uganda, so why are they complaining?”

Mr Opiro could not explain how his company managed to emerge the best evaluated bidder despite not fulfilling that requirement.

Asked whether Haks has ever supplied 53 vehicles in a contract worth over Shs6b, Mr Opiro said that whereas they do not have a lot of money, “we have a very good relationship with our bankers and by the end of June those cars will already be here, trust me”.

He said they have beaten Toyota Uganda in similar deals before. He said in 2013 they won a contract to supply 15 pick-up vehicles to the Ministry of Health.

“All the vehicles we supplied are still in good working order. We serviced them for the mandatory 100,000kms and we fully handed over to the ministry,” Mr Opiro said.He said they have also supplied eight vehicles to the American Embassy and “other clients.”

Arguments on priceThe other complaint about Haks has centred on price and the reasons for kicking out some of the other competitors, especially Toyota Uganda.
Haks’s bid price of $2,029,135 for the 53 vehicles was only the fourth lowest, with Cooper Motors (1,824,622), Victoria Motors (1,941,608) and Nissan suppliers Motorcare (1,996,147) coming in with lower price bids. Toyota Uganda (2,156,632) bid slightly more than Haks. 

The Electoral Commission (EC) did not respond for this article. Officials at the EC procurement department kept in touch, promising to get back to us with a response since Friday afternoon, but they had not done so by the time we went to press yesterday afternoon.

Bidding companies

• Miracle Motors Co. Ltd
• CFAO Motors Ltd
• Victoria Motors (U) Ltd
• Motorcare Uganda Ltd
• Toyota Uganda Ltd
• Haks Investments Ltd
• MAC East Africa Ltd
• Tata Uganda Ltd
• Walusimbi’s Garage Ltd
• Honda Uganda Ltd
• Cooper Motors Corporation (U) Ltd
• Mantrac Uganda Ltd
• Nile Fishing Co. Ltd
• Achelis Uganda Ltd

CREDIT: DAILY MONITOR