Madinah Tebajjukira
1 July 2009
Kampala — THE Government lost sh10b in unpaid rent for its buildings in Bugolobi which were occupied by Apparel Tri-star, a cloth making company, MPs heard yesterday.
The managing director of the Uganda Property Holdings Limited (UPHL), Albert Abaliwano, yesterday said the money accumulated from 2003.
UPHL manages the property, which belonged to the former Coffee Marketing Board, on behalf of the Government.
Appearing before the committee on commissions, statutory and state enterprises to answer queries raised in the auditor general's report for the years 2005-2007, Abaliwano blamed the Ministry of Finance for the loss.
He said the ministry instructed UPHL to renovate the canteen, dormitory and toilet in addition to providing a standby generator in 2002 at a cost of sh7.4b.
Abaliwano said the finance ministry raised about sh6.5b and UPHL raised the balance. However, by the time UPHL embarked on the renovation, the ministry had already allowed Tri-star to occupy the building, which made it difficult for UPHL to block Tri-star from accessing the premises.
Abaliwano explained that when renovations were completed, Tri-star's management refused to sign the tenancy agreement which spelt out the amount of money it was supposed to pay monthly.
"Whenever we called them about it, they referred us to the Ministry of Finance, which also dodged us several times," Abaliwano said.
He explained that UPHL also raised the matter to the Ministry of Finance and to the President's special committee on The African Growth Opportunities Act (AGOA) but they ignored them.
The textile industry was established to explore the African Growth Opportunities Act was supposed to pay sh131m per month, according to the Memorandum of Understanding which Tri-star declined to sign, UPHL board secretary Martin Kihembo said.
Tri-star closed business in July 2006 after mismanagement despite the fact that the Government gave them loans and subsides.
The firm has since been taken over by the Libyan Africa Portfolio, which acquired 60% shares in the firm. Tri-Star's former manager, Veluppillai Kananathan, has 5% shares in the new venture, while the Government owns 30%.
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