Queries as Kiira Motors spends Shs800m on assembling each electric bus

MPs on the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) have questioned officials of Kiira Motors Corporation over the Shs20Bn they had allocated for the assembling of 25 electric buses (Kayoola), with some MPs saying the cost of producing each bus is three times higher than importing a bus in the country.

The legislators’ concerns followed a query raised in the December 2023 Auditor General’s report of Kiira Motors Corporation, which indicated that several planned activities, including the manufacture of 25 electric buses valued at Shs1.960B, hadn’t been implemented at the end of 2022/23.

This prompted Martin Muzaale (Buzaaya County) to ask the officials from the Corporation to justify the cost that had been lined up to produce each single bus.

Isaac Musasizi, the Chief Executive Officer of Kiira Motors Corporation, while appearing before the committee on Thursday, informed the MPs that although the total allocation for the manufacture of electric buses had been Shs20Bn, but at the end of the financial year, only Shs5Bn had been spent and the buses produced are of two categories, and not all funds earmarked for this activity goes towards the manufacture of the buses.

“While the money goes into the production of buses, there are certain things which don’t go into the bus, for us to produce in Nakasongola, there are some tools we buys because that plant in Nakasongola wasn’t set up for that purpose. Under this category, we had 8metre buses and it has a carrying capacity of 56 passengers, then we have 10 meter buses with a sitting capacity of 70 passengers, these are for moving in the city,” explained Musasizi.

However, MPs weren’t convinced by the explanation given, prompting Medard Lubega, Chairperson COSASE to ask Musasizi to provide a breakdown on the cost of production for each bus.

Gerald Nangoli (Elgon County) questioned the continued existence of Kiira Motors Corporation if the cost of producing its buses in Uganda has proved to be higher than the ones imported into the country, raising doubts if the current trends will stop Uganda from importing buses as it had been envisaged ahead of the establishment of the entity.

“If I import a bus from Japan or wherever, the cost of a good bus is between Shs300M-Shs350M, and if I modified in Kenya along Mombosa Road, it would cost me around Shs250M. The essence of us having a manufacturing plant here, to make our own buses, was to bring our cost down so that Ugandans could also afford and also other people from the East African region but when you look at the cost of production, manufacturing a bus according to his own submission, it is three times the cost of importing a bus outside Uganda including taxes, so what are we really doing? Are we really in business? Are we trying to save the country out of importation?” Gerald Nangoli (Elgon County).

“Actually, there is a bigger question, whether that bus gives us value for money. Because when you tell me on the face of it, 25 buses for Shs20Bn, when we sell them, how much do we get? For you to justify the expenditure? We want to know of these 25 buses, which one is of which specification and therefore, the attendant cost?”