6 September 2012

Uganda: Hilton Hotel Set to Open in March 2013

After a lengthy delay and several postponements, Hilton Hotel Kampala developed by the Aya Group is set to start operations early next year, company officials told President Museveni during a visit to the site in Nakasero today.

The projected date for the opening of the 24-storey hotel, which has fundamentally changed Kampala's skyline, is March 2013. Upon completion, it is expected to employ 2,000 people permanently and generate an estimated $45m (approximately Shs 113.4bn) annually. According to a statement from State House, Museveni suggested the company had seized an opportunity to utilise a dormant asset.

"There were old government buildings for the ministry of information here, but Uganda was not earning anything; instead, it was spending money to maintain them," the President said. "Then these people said the spot was underutilised and that it could bring in more money. If a woman is barren, you don't chase her away, but you devise ways to get one who produces."

Construction of the hotel started in 2006, with some suggesting that it was to be one of the hotels to host guests during the November 2007 Commonwealth Heads of Government Meeting.

This never happened. In November 2008, Muhammed Mohd Hamid, one of the group's directors, told The Observer that the hotel would be completed in September 2009. This also never happened. The developers now say it will be ready in about six months.

Unlike other investments by private investors, President Museveni has shown unusual interest in this hotel, often visiting the site and publicly attacking critics he accuses of hostility toward investors, particularly Aya Group.

Nonetheless, the statement from State House said during his visit yesterday, Museveni "regretted the delay (to complete the hotel) caused by what he described as a confused lawyer."

The President said he is considering taking the lawyer to the Law Council to be investigated for professional misconduct. According to Museveni, the lawyer "confused documents for a stakeholder from the Industrial Development Corporation in South Africa and delayed project implementation."

Although the statement does not name the said lawyer, he is understood to be former Aya attorney, Muzamiru Kibedi, who has previously dragged Aya Group to court over non-payment of his legal fees amounting to $2.5m (about Shs 5bn).

The fee arose from a $41.5m (about Shs 1.04 trillion) loan that Kibedi helped Aya Group secure from the Industrial Development Corporation, a South African finance company, to complete the hotel structure.

Citing the Advocates Remuneration Rules, Kibedi argued that as a lawyer, he was entitled to five percent of the loan secured for his client, as legal fees. Later, the High Court issued a certificate of taxation, requiring the Aya Group to pay Kibedi $2.5m.

The proprietors, who had earlier offered Kibedi $3,000 (Shs 5.1m) which he rejected, then accused him of conniving to defraud them. However, the matter was later settled amicably in the High Court.

New advisor

Kibedi told The Observer yesterday that he was not aware of the President's remarks, but said Museveni was free to petition the Law Council.

"He is free to make allegations, however wild they may be. But as for me, I have no claim against Aya Group; they also have no case against me," he said. "That matter was settled amicably in the High Court."

The President also announced that he had appointed a senior advisor on investment who would deal with all investor complaints, including bribery claims.

"For the investors, if you come across some corrupt officers asking for bribes, I have appointed a senior advisor on investments with a hotline for reporting anyone who asks for bribes or frustrates investments. If caught, they will be put in the freezer," he said.

Lindah Nabusaayi, the deputy presidential press secretary, told The Observer that Museveni would reveal the new advisor soon.

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