Mukula Company’s Ringfenced Deal to Import Fuel Hangs in Balance as Museveni Government is Dragged to Court

Legal Brains Trust, whose leader is city lawyer Isaac Ssemakadde, has dragged the Museveni Government to court for granting Indian firm Mahathi Infra Services Private Limited and its Ugandan subsidiary Mahathi Infra Uganda exclusive rights to transport petroleum products on Lake Victoria.

The Ugandan subsidiary of Mahathi Infra Services Private Limited is linked to former minister and ruling NRM party bigwig Capt Mike Mukula.

In their petition, Legal Brains Trust alleges that on July 31, 2015, government authorized the two companies to carry fuel by barges by granting them exclusive rights.

The exclusive deal had a life span of one decade.

LBT accuses government of secretly signing agreements with Indian firm Mahathi Infra Services Private Limited and its Ugandan subsidiary Mahathi Infra Uganda and breached contract laws.

The documents presented before court in LBT’s petition filed on November 19 include: a redacted copy of the agreement, a petroleum facility construction permit dated March 29, 2016; certificate of approval by the National Water Management Authority dated March 18, 2016; and a Mahathi Infra letter dated December 2016 requesting project approval from the Ministry of Works and Transport.

According to an affidavit sworn by LBT Project Officer Anthony Jumba, there were no clear safeguards to protect the independence, sovereignty and territorial integrity in the agreements between Uganda and the Indian firm as well as its Ugandan subsidiary.

Jumba also opposes the government move to keep Ugandans in the dark regarding the contract as well as dodge parliamentary scrutiny and approval.

“Accordingly, it will have the deleterious effect of undermining efforts to build national strength in the political, economic and social spheres and exacerbate out undue dependence on other countries and institutions,” argues Jumba.

“Having analyzed the clear provisions of the agreement… I have come to the conclusion that its dominant purpose is to cause the respondent/Attorney General to facilitate the unmitigated exploitation of the Ugandan people and their resources by the handpicked company and its special purpose vehicle.”

LBT also faults government for flouting procurement laws by not putting in place a bidding process.

“The respondent/Attorney General flouted its obligation to carry out the requisite due diligence for the selection of a company to develop an oil transport on Lake Victoria and in fact it does not possess a due diligence report that can stand up to scrutiny, or at all,” Jumba went on.

“The impugned conduct of the respondent/Attorney General goes beyond the permissible exercise of state power in regulating business, and is blatantly discriminatory, plainly unlawful, and unacceptable and demonstrably unjustifiable in a free and democratic society.”

Among the orders sought by LBT is a declaration that the said agreement/contract, cabinet resolution or directive that put in place the agreement granting Indian firm Mahathi Infra Services Private Limited and its Ugandan subsidiary Mahathi Infra Uganda exclusive rights is illegal, null and void; as well as an injuction blocking the implementation of the contract.

Last month, LBT, represented a Chinese widow who had put the Indian firm Mahathi Infra Services Private Limited and its Ugandan subsidiary Mahathi Infra Uganda over the death of her husband who worked for them.

Additional Reporting: Courtesy