4 February 2013

Uganda: High Court Saves Treasury Sh40 Billion

The commercial division of the High Court has thrown out a case for which a Canadian group, Uganda Gold Mining, sought to block the ongoing sale of the Kilembe Copper Mines.

The firm asked court to order the Attorney General to enforce an order which would necessitate it to take over the mines after it had abandoned it seven years ago.

Uganda Gold Mining had also presented a claim of $15m (about sh40b) as out of court settlement to drop interest in the copper mines.

However, Justice Christopher Madrama, in his ruling, said: "The order sought would interfere with the privatisation process prescribed by Parliament on the basis of an agreement to which the Government is not party."

"The state is entitled to carry out the privatisation process under the Public Enterprises Reform and Divestiture Act," the judge ruled.

Privatisation Unit spokesperson Jim Mugunga hailed the judgment.

"We now look forward to ensuring a speedy divestiture of Kilembe Copper Mines," he said.

"This long-standing case has been one of the major stumbling blocks hindering revamping the mines.

"There have been frustrations and the President has openly voiced his concerns. Since our government upholds the rule of law, we had to see through this court process and finally justice has been delivered."

Mugunga noted that if precaution had not been taken by the Privatisation Unit to patiently and diligently pursue the court case, Uganda would have forked out over sh40b to settle the matter out of court.

"Given well documented incidents where the Government has persistently lost cases, it is refreshing to note that some public servants still have what it takes to save tax payers' money," he observed.

Addressing the NRM Members of Parliament during a recent retreat at Kyankwanzi, President Yoweri Museveni blamed "timid political elements and indifferent, if not compromised, civil servants" for the delay to revamp and upgrade Kilembe Mines.

In a related development, the Cabinet subcommittee on privatisation, the Divestiture Reform and Implementation Committee (DRIC), has approved a list of five shortlisted bidders for Kilembe Mines and recommended that they proceed to the final stage of the divestiture process.

The bidders, who will now be required to submit detailed technical and financial proposals, are; Sino-Steel (China), Tibet-Hima Group(China), Konkola Copper Mines PLC (Zambia), Shree Minerals (Australia) and Gingko Energy Investments Co. (China).

Jim Mugunga confirmed the DRIC action. "It is true they (DRIC) met on Monday and gave the no objection. We are now ready to issue the Request for Proposal document to the prequalified bidders and undertake due diligence as required."

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