The National Enterprise Corporation (NEC) has not received its agreed share of fines from Uganda’s digital number plate system because its partnership with Joint Stock Company Global Security (JSC GS) has not taken effect, Parliament has heard.
Defence and Veterans Affairs Minister Kiryowa Kiwanuka said a November 22, 2023, cooperation agreement entitled NEC to five per cent of fines and penalties collected through the Intelligent Transport Monitoring System (ITMS).
However, he said the company has never taken part in implementing or operating the system.
Kiwanuka appeared with NEC’s board before Parliament’s Physical Infrastructure Committee to explain the corporation’s dealings with JSC GS over the digital number plate project.
“Notwithstanding the execution of the Cooperation Agreement, NEC has never been effectively involved in the implementation or operation of the ITMS project,” he said.
The minister told MPs that several provisions of the agreement remain unfulfilled. The project did not use land NEC had committed to provide. The parties also failed to establish the planned joint venture or bring NEC into the system’s operations.
As a result, NEC could neither perform its intended duties nor access its agreed share of fines and penalties.
Kiwanuka said JSC GS’s failure to fulfil obligations needed to activate the partnership raised concerns about non-performance or a material breach of the agreement.
The arrangement followed an earlier memorandum of understanding signed on March 22, 2019. That document sought to open talks on technology transfer and establish a framework for negotiating a joint venture.
Kiwanuka said the memorandum expressly stated that it did not constitute a contract. It covered six months and did not create a continuing contractual obligation between the parties.
NEC and JSC GS resumed their engagement four years later. Their 2023 cooperation agreement covered the creation, installation, upgrading and operation of the transport monitoring system.
The minister said this agreement created a separate contractual framework and provided for NEC’s participation in the project.
Despite signing it, he said, NEC has never helped create, install, upgrade or operate the system. The failure to establish the joint venture has also blocked the corporation from earning its expected commercial returns.
