Meeting with Uganda Railway Corporations (URC)
Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on November 12th, 2014
The meeting was chaired by Hon. Ibrahim Ssemujju Nganda and the management of URC was represented by the acting General Manager, Mr. Charles Kateeba, the acting chief finance officer Ms Pamela Rucecerwa and Mr. Iyamureme. The meeting was held to hear reponses to the queries that arose in the Auditor General’s report, some queries in the report include;
Non-compliance with the international financial reporting standards (IFRS), which in section 7 requires an entity to disclose the significance of financial instruments for the entities financial position and performance, the nature and extent of risks and how the risks are managed. Management promised to carry out a risk assessment exercise.
The audit report also noted that URC last carried out a revaluation exercise for its assets in 1988 which constitutes as non-compliance with revaluation requirements of IAS 16. It was therefore hard for the audit to determine whether the value of the property, plant and equipment as stated in the financial statements was indeed true.
It was noted in the audit that two boats; MV Barbus and MV Mvule worth 1.6 billion that belonged to URC were impaired and for several years had been docked at Portbell with no economic benefits to the corporation. No impairment exercise was carried out for these assets and there was no sign if disposing of them either. Some MPs alleged that maybe the reason the Corporation did not want to sell these assets was that a senior government official had deposited a sum on one of the boats. Management claimed to not know anything on the matter but promised to look into the matter.
On the issue of the long term loans received by the corporation from government that had no correspondences, management told the committee that these debts went was far back as 1988 and they were looking into the archives to get information to reconcile the anomalies.
The government also made contributions to the Corporation amounting to UGX 39.9 billion. The contributions were both in monetary and non-monetary /capitalization grants used for asset acquisition. Management maintained that these still date as far back as 1988 and 1989. Government just transferred shares from East Africa Railways and Harbor after it collapsedand were treated as government contributions, Ministry of finance treats them as loans. URC was also undertaking further discussions with the Parastatal Monitoring unit into the matter.
The audit report also brought to the committee’s attention the fact that URC incurred a net loss of UGX 2.27 billion and that its current liabilities exceeded the current assets by UGX 141.73 billion. The total liabilities were more than total assets by UGX 71 billion. Management said this was as a result of the corporation being undervalued, the corporation is valued at a figure used in 1988 and 1989.
The chairperson asked URC on their next encounter with the committee to come with documented evidence to support their claims.