Gerald Tenywa
3 January 2009
Kampala — The National Forest Authority timber yard that stands on part of land that is at the centre of the dispute
A dispute has emerged between the National Forestry Authority (NFA) and the Virco Holdings Limited, a private company granted a 49-year 'licence' to operate on one hectare piece of land at Nakawa forest reserve.
In a sudden turn of events, Virco applied for a leasehold title over the one acre piece of land without the consent or knowledge of NFA and this has prompted angry reactions from the forestry authority.
In a December 15 letter, a senior official of the forestry authority said the NFA licensed one hectare of land at Nakawa central forest to Virco holdings limited for purposes of establishing a timber drying plant and modern artisan training centre.
"Thus, Virco Holdings applying for a leasehold title is a breach of the licence agreement with NFA," said Paul Buyerah Musamali. "This is, therefore, to inform you that NFA does not agree to Virco Holdings Limited applying for a leasehold interest in the said land."
He was reacting to a letter dated December 11 from the secretary of the Uganda land Commission, KSB Mubbala, in which it was noted that an application from Virco to lease had been submitted to the commission, but Virco's letter was not copied to NFA.
"The purpose of writing to you this letter is to let us know whether you agreed to the processing of the leasehold title for the one hectare of land," Mubbala said in the letter.
This comes in the awake of complaints that NFA offered the licence without competitive bidding, contrary to the National Forestry and Tree Planting Act, 2003 as the process was neither open nor competitive.
Baguma Isoke, the chairman of the board of trustees, defended their decision to make a direct offer to Virco, saying NFA wanted to avoid speculators and that their investment was an innovation. "They had a good idea. When they approached us we discovered that they had an innovation." Asked whether NFA would consider cancelling the deal since the company has intentions of owning the land, Baguma said he was not aware of that development. "I have not looked at the letters that are raising this, but we shall study the contents when the board convenes in February," he said.
In the agreement obtained by Sunday Vision, the investor will pay sh400m in two instalments and an annual sh10m licence fee.
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