ENRICA PINNETI, The visible hand in public procurement

ENRICA PINNETI, The visible hand in public procurement

Enrica Pinneti, a not so known Italian investor has for the last month been at the center stage of scrutiny in Ugandan media. She is the face reportedly behind Finnasi company, the Italian firm contracted to manage the construction of the Lubowa specialized Children’s hospital.

Pinetti, the controversial investor also happens to be the same face behind the Uganda Vinci Coffee Company Limited (UVCCL) which recently signed a contentious agreement with Government of Uganda giving the Italian-owned company exclusive rights to buy all Uganda’s coffee. SecretsKnown believes that Enrica Pinneti is merely a façade and is a financial intermediary being used by the true beneficiaries of these deals.

The common thread between both these controversial deals is that these companies were both single-sourced as opposed to competitive bidding which should have been the ideal method of procurement. These procurements nakedly showed Uganda’s flawed procurement process given their shady nature which lacked openness, transparency, and due diligence.

According to the Inspectorate of Government (IGG), Uganda loses about UGX 10 trillion ($2.7 billion) to corruption and 80% of it is through procurement, which is the commonest form of procurement. Public procurement should ideally save the waste of public resources however in the case of Uganda, it is different.

Absurdly, the scenarios in case are not a one-off but a precedent in how government business is handled.

The secret known is that in Uganda, single sourcing seems to be synonymous with big-ticket procurement deals which usually have a threshold of huge chunks of money involved. Some other familiar examples of companies that were single-sourced and had enormous funds involved include Joint Stock Company Global Security, the Russian company government contracted to supply, install and monitor tracking chips on all vehicles and motorcycles.

In 2010, German firm Muhlbauer High Tech International also won the lucrative deal to make the national identification cards through an executive decision by the president. 

It is important to note that close to 80 percent of the budget is expended through procurement which is why most of the corruption scandals that are grand in nature have something to do with procurement. This should be an area of concern for every citizen because that is where the economic hitmen are targeting.

In 2003, the Public Procurement and Disposal Act (PPDA) was enacted in 2003, and the PPDA Authority was set in place as the statutory institution mandated by parliament with the responsibility of superintending over all forms of public procurement including the ones that may provide room for single sourcing.

The authority has however been sidelined hence has become irrelevant in this particular aspect. If looked at critically, the PPDA Authority seems to be suffering from the same malaise of state capture of institutions just like the other institutions in the country.

SecretsKnown has also noticed that in many of the cases where single sourcing has been applied, there is usually a firm upper hand involved despite a lot of resistance by a section of legislators, the public, civil society and academia.

In the case of the coffee deal between UVCCL and government of Uganda, the president himself identified the investor in 2014 after she visited the statehouse and sampled some of her coffee.

In this case, the head of state had the final say in determining who was awarded the contract. When do we however draw the line between influence peddling (a classified form of corruption) in procurement processes and well-intended presidential directives?

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