Uganda

Uganda demands answers over aborted aircraft deal

Uganda Airlines plane before liquidation began in 2001.
A Uganda Airlines plane before it was recommended for liquidation in 2001. The government has begun the process of reviving the airline. FILE PHOTO | NMG 

Uganda is reportedly seeking an explanation from Export Development Canada (EDC) for its decision to pull out of the funding deal for the acquisition of four Bombardier jets for its national carrier.

Sources close to the Uganda Airlines project say the search for an explanation is likely an effort to avoid audit queries in the future, since the procurement will now be financed using more expensive sources.

“The project team has been evaluating alternative proposals, which included some ridiculously cheap money. On further scrutiny, these offers have been turned down in favour of more expensive but credible money. That is something that could raise questions in the future, hence the need for a record that EDC finance was not available,” a source explained.

Kampala is warming up for an April 2019 relaunch of its flag carrier but the procurement of the first four aircraft — Bombardier CRJ 900 series — was rocked by financing setbacks after the withdrawal of Canadian export credit support.

The withdrawal of the Canadians, whom Kampala had initially banked on, has sparked a swirl of rumours, with some commentators linking it to recent political events in Uganda that have seen a violent crackdown on opposition supporters.

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Keith Muhakanizi, the Permanent Secretary in the Ministry of Finance denied knowledge of a letter to the Canadians, but did not dispute the reports.

“Treasury is not an individual but an office. I have been away for 10 days, so I would need to first find out if any assigned officer wrote such a letter during my absence. What is not in doubt, though, is that we shall finance this project,” he said.

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