The government’s controversial digital number plates project has suffered another setback after Sam Mayanja told Parliament that the agreement with Russian firm Joint Stock Company Global Security is null and void, arguing that it never met the fundamental conditions required to be legally binding. Appearing before Parliament’s Physical Infrastructure Committee, chaired by Mwine Mpaka, Mayanja questioned how the government could commit itself to a multimillion-dollar arrangement without satisfying key technical and financial requirements. “As the Attorney General, I see no contract to commit to here. There is no contract that binds the State of Uganda because none of the conditions that go to the root of the matter has been fulfilled,” Mayanja told the committee. His assessment raises serious questions about the legal foundation of the Intelligent Transport Monitoring System (ITMS), a project designed to introduce digital number plates and vehicle-tracking technology across Uganda. It also puts renewed scrutiny on an arrangement where motorists pay for the new plates, while the private investor is expected to recover its investment partly through revenue collected from traffic offences. At the centre of the controversy is a question that has followed the project for years: how much will Ugandans ultimately pay, and what exactly are they getting in return? Joint Stock Company Global Security was expected to invest $257 million in the project. According to figures the Ministry of Finance presented to the committee, the company had invested $115 million by July 2026. Officials, however, could not establish how much of that investment had already been recovered. The committee also questioned a financial model under which the investor was reportedly expected to receive Shs 3.3 trillion. More troubling to MPs was the apparent absence of documents that would ordinarily help the government determine whether the arrangement was financially sound. According to information presented during the committee’s investigations, the project lacked a satisfactory feasibility study, risk assessment, analysis of financial commitments, value-for-money assessment and examination of future contingent liabilities. These are not merely administrative requirements. A feasibility study helps establish whether a project is practical and financially justified. A value-for-money assessment considers whether the public is receiving reasonable benefits for the costs involved. An assessment of contingent liabilities examines financial obligations that government could face if particular risks materialize. Without those safeguards, MPs questioned how officials could confidently approve a project involving substantial private investment and potential claims on public revenue. Mayanja argued that the missing technical and financial models went to the heart of the agreement. He also questioned the proposed reliance on traffic fines to repay the investor. Under the arrangement described to Parliament, the company would receive 80 per cent of revenue collected from traffic offences to recover its investment. The committee raised concerns that this conflicted with the Road Fund Act. Mayanja challenged the assumption that motorists would continue committing offences at levels sufficient to finance the project. “I have driven cars for over 40 years, but I have never committed any traffic offence. So, if I was included in those fees, then they are wrong,” he said. “You anticipated that you were going to recover the money through fines. What if we learn and change our behaviour and stop paying these fines because of a change in behaviour and become good citizens? Where are you going to get the money to pay for the contract?” His argument exposed a fundamental tension in the financing model. A traffic-monitoring system is supposed to encourage compliance with road rules. But if the investor’s repayment depends heavily on fines, improved driver behaviour could reduce the revenue available to finance the arrangement. Mayanja further argued that traffic fines are government revenue that should go into the Consolidated Fund. Redirecting such revenue into private contractual income, he said, would require an appropriate legal framework. He maintained that provisions contradicting existing law could not stand. HOW MUCH DOES A DIGITAL PLATE REALLY COST? The committee’s investigation has also exposed confusion surrounding the Shs 714,300 cost of the digital number plates. MPs demanded a detailed breakdown of the figure and questioned officials over the benchmarking allegedly used to justify it. The controversy intensified when Parliament Police’s Criminal Investigations Department reportedly apprehended two officials, Moses Bekabye, a technical adviser at the Ministry of Finance, and Nathan Negesa, a principal secretary in the Office of the President. They were accused of failing to provide a credible breakdown of the costs and of misrepresenting a benchmarking exercise that MPs said had not taken place. The committee also alleged that information submitted to support the project’s pricing was generated using artificial intelligence. “We have looked at the phone belonging to Negesa. All the information they have been giving us as a committee was generated using artificial intelligence. Up to now, we are not sure of the breakdown of Shs 714,300, which is the cost of the digital number plates,” Mpaka said. Negesa acknowledged using artificial intelligence to generate information that he shared with the Permanent Secretary in the Office of the President. “I kindly seek your indulgence. I had erroneously stated those figures and, with your permission, I wish to state Shs 116,000 because I was trying to balance the cost of the digital number plate,” he said. The committee questioned the explanation, including the suggestion that Shs 116,000 represented the VAT component of the charge. “You are telling us that each Ugandan is paying Shs 116,000 of the Shs 714,300 in VAT. We asked you for details on the number of people who have received the new number plates,” Mpaka said. The dispute goes beyond whether officials used artificial intelligence. The more important question is whether figures submitted to Parliament were accurate, independently verified and supported by reliable financial records. For motorists, the issue is straightforward: a compulsory charge must have a defensible cost. A SECURITY PROJECT WITHOUT AN ECONOMIC CASE? Officials from the Ministry of Works and Transport also appeared before the committee as MPs sought to establish who had approved the project’s financial model. Winstone Katushabe, Commissioner for Transport Regulation and Safety, warned against attributing the decision solely to the technical ministry. “It has some implications if a model is approved without the technical ministry,” he said, indicating that the Ministry of Finance had played a significant role. Hajji Yunus Kakande, the Permanent Secretary in the Office of the President, offered another explanation. “It was approved as a security project. They never approved any economic issues, they tell me. It was only security,” he told the committee. That distinction has become central to the investigation. A project may serve a legitimate national security objective, but that does not remove the need to establish its financial costs, contractual obligations and longterm sustainability. The committee wants the Ministry of Finance and the Office of the President to produce the technical report supporting the financial model. Another finding challenges how the public has understood the project. Following an oversight visit to police headquarters, the committee said it had established that the number plates themselves cannot be tracked. Instead, the system relies on a separate tracking device installed in the vehicle. “We have analyzed the number plate and all its features. During installation, a tracker is fitted in your vehicle alongside the number plate, meaning there are two components. The number plates cannot be tracked, but the tracker can,” the committee was told. The distinction matters because it separates the physical number plate from the technology used to monitor a vehicle. Private tracking companies have also questioned the capabilities of the equipment supplied under the project. They claimed that the trackers have limitations, including an inability to establish when a vehicle’s engine is started or switched off. “They just connect the negative and positive wires, and you cannot know when the engine started or whether it was running,” one source said. Other concerns included limited access to the device and installations that were not sufficiently concealed. These are claims by competing industry players, however, and require independent technical assessment before they can be treated as established defects. The project was also intended to build local capacity. Under the arrangement described to Parliament, the National Enterprise Corporation (NEC) was expected to take over after 10 years through a transfer of knowledge and technology. The committee was told that four years remained under the contractual timetable. Yet MPs questioned whether the promised transfer was happening. Security Minister Kiryowa Kiwanuka said NEC had effectively been sidelined, leaving Uganda without the capacity it was supposed to acquire. “There is no capacity being built within NEC, which was expected to be the successor to the project,” he said. Committee members noted that NEC should already have been working with the Russian company on manufacturing chips for the digital number plates. The concern is that Uganda could complete a costly technology project without developing the domestic expertise needed to maintain or eventually operate it independentlyThe post Minister: Digital plates deal is unlawful appeared first on The Observer Media Ltd.