Yasiin Mugerwa
9 November 2007
Kampala — A SINISTER plot to grab a large plot of prime land in Bugolobi has been exposed.
A whistle-blower on Wednesday night volunteered information to the Parliamentary Public Accounts Committee that the land occupied by the failed Apparel Tri-Star venture is about to be taken by an alleged Libyan dealer pushing to illegally share the property on 60:35:5 percent basis between himself, the government and Mr Velupillai Kananathan (the former boss of Tri-Star).
The Public Accounts Committee has of recent been at pains to explain to the Executive that the government cannot enter such a venture without an Act of Parliament.
"Without Parliamentary approval, this is robbery," Kawempe South MP Ssebuliba Mutumba said yesterday.
"In fact, at this rate of secretive government deals, our country is virtually losing everything when Parliament is not 'dead'. We are going to block this because our people deserve better," Mr Mutumba, the Vice Chairman of PAC told Daily Monitor yesterday.
The MP added, "Why should Parliament be bypassed when there is nothing fishy about this deal! One wonders who determined the value for this land and the decision to illegally give away public land in such a clandestine manner."
The move comes after the government recently sold a 60 per cent stake in Tri-star to Libyan Africa Portfolio Investments in an attempt to salvage the company. The government took 30 per cent of the shares, while the proprietors of the original company led by Mr Kananathan retained 10 per cent.
Quoting a whistle-blower, Mr Ssebuliba told a committee session yesterday that State Minister for Finance (General Duties) Fred Omach, Deputy Secretary to the Treasury Keith Muhakanizi and Mr Billy Kainamura, the Commissioner Contracts and Negotiations - Directorate of Legal Advisory Services in the ministry of Justice are involved in the deal.
He added that the Libyans want to establish Pearl Textile factory to replace Apparel Tri-star.
The committee heard that the deal is already in advanced stages and that a Memorandum of Understanding has already been signed. The only outstanding issue, according to the whistle-blower, is signing an agreement that confirms the sharing percentages.
The said land is about nine hectares (25 acres) of the former Coffee Marketing Board [Plot 1-7 Kalitunsi Road and 29A-41A Spring Road] located in Bugoobi, a Kampala suburb about 2 kilometers from the city centre.
While meeting officials from the Ministry of Finance yesterday, Committee Chairperson and Budadiri West MP Nandala Mafabi, demanded that Mr Muhakanizi explains his involvement and why the government land is being given out without neither the Public Procurement and Disposal of Public Assets Authority nor a Parliamentary resolution to clear the process.
However, Mr Muhakanizi said the issue would be appropriately handled by his minister Omach in another Parliamentary Select committee that is investigating the collapse of Apparel Tri-Star factory.
Mr Muhakanizi said, "I am a civil servant who cannot comment on this matter because it's a policy issue that requires a minister." Efforts to speak to Mr Omach by press time were futile as the minister's cellular phone was switched off.
But the committee's lead counsel, Bunyaruguru MP Gaudioso Kabondo said, "If this is true, then it will be a criminal offence and whoever is responsible should prepare to explain."
Mr Mafabi ruled that the committee drafts urgent summons for Mr Omach, demanding that he explains the circumstances under which the government land is being secretly parceled out.
"The committee would like to know who cleared the process and why the Attorney General, Mr Khiddu Makubuya, was sidelined in this deal. This is against the Constitution and we are going to follow this issue to the last detail," Mr Mafabi said.
He added, "We cannot allow individuals to use their offices to dish out government property in a clandestine manner. If they got directives from somewhere else, we shall also need to know this. I assure you that this time, there is no turning back on this matter."
Citing hand-written whistle-blowers testimonies among others, Mr Mafabi said Mr Kananathan, the former Managing Director of Apparel Tri-Star, should be arrested and brought to book for causing financial loss amounting to over Shs20 billion in taxpayers money.
"It's unfair for this man to be given another 5 per cent yet he owes a lot of money. Parliament should interest itself because even the whereabouts of this land is not explicit. The IGG should also take up the matter before it is too late," Mr Mutumba quoted the whistle blowers as saying.
The government loaned over Shs20 billion to Apparels Tri-Star (U) Ltd run by Mr Kananathan.
The troubled company, incorporated in Uganda in 2002 to export textiles to the United States under the African Growth and Opportunities Act (AGOA), took loans from the Uganda Development Bank (UDB) and dfcu Bank, guaranteed by Bank of Uganda. But the two banks seized the BoU securities in 2005, after the company failed to service the loans.
The government was also paying 71.5 per cent of all taxes on railway transport charges for all the company's raw materials and finished products to and from Mombasa. It also offered the company free premises and contributed a substantial subsidy towards the training of workers.
While defending the government's heavy subsidies for the factory, President Yoweri Museveni argued that Agoa had the potential to earn Uganda billions of shillings from garment exports to the US, offer jobs to thousands and invigorate Uganda's cotton production.
But none of these seems to have happened. Instead, the company became more known for its alleged mistreatment of workers than the export of textiles. Initially, 1,000 girls were recruited from across the country, trained and offered jobs.
But the number kept diminishing and by its closure, only about 350 were employed.
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