Kampala — THE proposed licensing of a private company to manage the government-run Katugo forest reserve in Nakasongola under a 50-year concession has split top forestry officials.

A group of officials on the allocation committee of the National Forestry authority (NFA) ruled in favour of Nile Ply, which bid slightly above $9m (over sh16b).

This was contested by another group that wanted a rival company, New Forestry, that had offered $13m (over sh24b) to take the deal, but most committee members were of the view that "it had inferior credentials."

Their decision to allocate the 3,000-hectare reserve was reportedly based on "a sound track record of Nile Ply in sawmilling and it had presented all the necessary documents."

NFA estimated the value of Katugo at $9m, but sources say the deal could deny the government large amounts of revenue.

Sources said the infrastructure, including houses built with the support of Norwegians, was left out during the valuation.

"We know that the NFA works in a business manner, but we do not understand why they left out the assets for the private investor to take freely," sources said.

Sources want the inspector General of Government to intervene, saying the probe would curtail the impending loss of government revenue.

Olav Bjella, who heads NFA, reportedly referred the matter to the Public Procurement and Disposal of Assets before he left the country.

NFA spokesperson Gaster Kiyingi dismissed the problem as "worthless rumours" and declined to give details.

But Kiyingi emphasised that the deal would promote private investment in forestry.

He said the managing contract would entail harvesting and replanting of pine trees that take between 20 and 25 years to mature.