19 November 2012

Rwanda: K-Club in Fight for Survival

Hardly has the controversy of the threatened closing down of the popular Papyrus nightspot in Kimihurura by Kigali City Council died down than a new one bubbles up.

Officials have given K-Club - the upscale nightclub in Nyarutarama - less than a couple of months to wind down operations and vacate their building. The reason given is that since K-Club operates just next to a service station, it is a safety hazard.

These days K-Club proprietor Emmile Murego together with his wife Betty - who also is his partner in running their businesses - are spending sleepless nights after a senior official called Mrs. Murego in the evening of Monday 5 this monthto give them the notice. The official, whom we shall not name (the notice given K-Club has only been verbal and not communicated in writing, and the official conveying it was just the messenger for a meeting chaired by Prime Minister Pierre Damien Habumuremyi)talked to Mrs. Murego on the phone but did not send any written communiqué for the decision.

A source who attended the meeting with the Prime Minister - a meeting composed of Kigali City Mayor Fidel Ndayisaba, Private Sector Federation Chairman Faustin Mbundu, Gasabo Mayor Willie Ndizeye, Acting Rwanda Development Board CEO Clare Akamanzi among others - told The Rwanda Focus that not all these officials were comfortable with the idea of closing down the only nightclub in the country popular with expatriates, tourists bringing hundreds of thousands of dollar to Rwanda, well-remunerated Rwandan professionals, ministers, permanent secretaries, bank executives, foreign dignitaries coming to Rwanda for the first time, and other members of the high-income demographic. Our source informs us the person most enthusiastic about the idea of putting the club out of business was Mayor Ndayisaba. Closing K-Club, according to our sources, was an idea pushed by Kigali City Council.

The building housing K-Club is known to many in Kigali for being the one where the brash, sham tycoon Barry Ndengeye first set up shop in this city before later falling out with his business partners and banks over money issues, and falling into bankruptcy. Murego who had been living in London for sixteen years decided with his family to come back home, which was three years ago.As he put it to The Rwanda Focus, "Rwanda is our home and we cannot live in other countries forever; we decided to come back and build our lives here as well as contributing to rebuilding our country. Murego is a highly qualified lawyer, holding two masters degrees from prestigious universities in London. At the time of their decision to come home they were making a comfortable living in the British capital, with Emmile working in the legal department of Linpac, a London-based firm, while Betty worked as a schoolteacher.

Setting up shop in Kigali

Once in Kigali, the couple - who already had a house here - went about exploring their way around, looking for things to do. Should they find employment since their skills are highly needed in Rwanda? Should Emmile work for one of the big international organizations in Kigali? Many options were open to them. But they finally decided employment was not the way to go. Setting up a business to employ themselves as well as very many other Rwandans was what they embarked upon. Barry Ndengeye had fled to Goma in the DR Congo when his problems became such that he would be headed back to the jail, where he had spent a stint earlier on money-related issues.

The building was vacant; it was readily available and it was in an opportune place with a hinterland of residences for some of the most affluent individuals in town. The Muregos then went about acquiring all the necessary papers and documents from the Gasabo District as well as the city authorities. They first set up a supermarket on the ground floor of the building. After that the enterprising couple looked at the second floor and saw even more opportunities to expand into new ventures.

Ndengeye had for a couple of years been running a nightclub called B-Club on the now vacant second floor space, and the landlord looking for someone to rent it out. He immediately agreed to Murego's suggestion that the latter could refurbish it into a brand new and, better still, high-end club. "The way I saw it", Murego told The Rwanda Focus, "A certain class of people had been put off clubbing because the options available were not to their taste, and I thought this was a ripe market to be catered to." Murego uses careful, almost lawyerly language in talking of the available options not being satisfactory to a "certain class of people". What this translates to is that almost every dance club in Kigali before K-Club came was a dive; that is sweat-filled places of tasteless décor, sometimes unruly revelers, smelly carpeting and other off-putting signs of seediness to anyone looking for class.

It never occurred to Murego that the fact there was a service station right next to the building could be a problem at all. "Look here," he says: "Ndengeye operated a club in here for a long time and the petrol station was there all that time. It never became an issue, and I never thought it would become an issue, and in fact if it had the potential to become a problem then I would never have gotten the go-ahead from the local authorities to build." In fact several months later, when Murego completed a very expensive upgrade of B-Club and renamed it K-Club, none other than the mayor of Gasabo and other dignitaries were on hand for the opening ceremony, praising Mulego to the high heavens as a savvy, good and innovative investor.

When Murego and his wife undertook to build a club they deemed worthy of Kigali's better off classes, they did not pinch francs. They went to the bank and offered up their house as collateral for a big loan. They came up with the rest from their hard-earned savings and refurbished the former B-Club to the tune of Rwf 250 million. Builders stripped everything seedy from the floors and walls and ceilings of the former B-Club and installed new carpeting, new wall decorations, installed flat screen TVs, state of the art speakers and strobe lights, clean leather seating and velvet cushions; they gave the outside a thorough make-over and the staircase leading up to the club was tastefully redecorated, with the K-Club logo prominent in synthetic looking wood facing the staircase. The reaction of the first clubber to enter was, "Woooow!"

Getting pushed out abruptly

Kigali had gotten a new happening place; a red-hot new happening place. People who had been put off clubbing for very long due to luck of a better choice now began doing so again, in droves. Kigalians who would occasionally board planes to Kampala to club in places like the Ugandan capital's Ange Noir nightclub now had their own first class establishment right here at home. No more need to take their money to Uganda!

But now, barely one year after the club opened, the investors are being told to close their business down. And not a single authority is telling Murego and his wife what they are to do next. Neither Mayor Ndayisaba, nor Gasabo Mayor Ndizeye is offering them a new place to work from. None of them is offering compensation for all the money the couple sunk in their venture. All they are telling them is: "close down immediately after New Year, and move!"

Someone has looked at a petrol station (a Kobil) that employs 5 people and decided that is reason to drive away investors who have sunk over Frw 550 million in their businesses (in addition to the club and supermarket there is, on the second floor a classy beauty centre) and are employing 105 Rwandans. And the Muregos are investing even more; they have commissioned construction of a new wing to the building that, by the time it is completed in February 2013 will house an even fancier extension of K-Club, additional parking space, a new bakery, a new coffee shop, and they will be employing 180 Rwandans, and their investments will have come to a total of Frw 800 million. Murego has shown this newspaper his plans, detailed down on paper. We have seen the loan documents from his bankers. In fact when the government official called Betty Murego to inform her they have to close shop, her husband was in London to purchase, and negotiate transportation of new equipment for their businesses. The Rwanda Focus has seen prospectuses from different London-based dealers in equipment the Mulegos need. Murego was very upset when his wife told him of the closure notice, and he abruptly cut short his trip to the UK, to return home to see how best to deal with the problem. "I am shocked because I never imagined in a hundred years that we would be told to close and move, really shocked," he said.

Gasabo Mayor Willie Ndizeye in media reports insists it is against the law for a club to be less than 100 meters from a service station. But he does not say why it is now that they have realized such a danger exists; he does not explain why Mulego got the go-ahead to build in the first place, and he explains nothing about what the businessman should do now, or whether there are any plans to help with relocation or compensation. The message this sends to Emmile and Betty Murego is: just shut down your business and go away!

The Prime Minister's governance adviser Fabien Majoro in a phone interview with The Rwanda Focus said it was his view too that a nightclub in close proximity to a service station is a safety hazard. Majoro was careful to tell this newspaper he was talking in his personal capacity, and not for the Prime Minister or the Prime Minister's office. But his answers too did not address the issues of compensation, or help with relocation, or why it is only recently that the safety issue has come up. We tried to raise Kigali Mayor Ndayisaba in the phone but failed to get him; he was caught up in meetings all the time.

Murego thinks someone "is just insisting on the closure, even when we have tried to find a compromise with management of the petrol station." He says they had reached an agreement with the Kobil country manager, one Mr. Ngugi, whereby the service station would be operating from seven in the morning up to eight in the evening, when traffic noticeably slows down, then K-Club would be open from then up to 6 in the morning. But, says Murego, City authorities were not willing to listen to this suggestion. The Rwanda Focus repeatedly tried to have an interview with the Kobil country manager but, after we told him who we were, we did not succeed in raising him on the phone again.

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