9 November 2018

Uganda: MPs Direct KCCA to Compensate Basajja for City Abattoir Losses

Kampala — Members of Parliament have asked Kampala Capital City Authority to "buy residual interests" of Basajjabalaba Hides and Skins (BHS), following forceful loss of interest in the city abattoirs by the later.

The recommendations contained in the report of the Parliamentary Committee on President Affairs, have also asked KCCA to repossess the abattoirs and tender them out to City Abattoir Traders Development Association (CATDA).

"KCCA management should with immediate effect earmark funds to purchase BHS Co Ltd residual interest in line with Article 26 (2) of the Constitution of the Republic of Uganda," reads part of the recommendations.

The report also notes that "it is incumbent upon the government to compensate BHS Co Ltd fairly and to have thousands of the vendors interests in the facility protected."

The committee report by Mr Fred Mwesigye (former chairman) declared that it would be unfair for a nation with a policy of promotion of the local "content to turn around and frustrate her local entrepreneurs."

The resolve was made to fit in a presidential directive which placed the abattoir in the hands of the vendors under their umbrella, City Abattoir Traders Development Association following spontaneous clashes and disagreements with Mr Hassan Basajjabalaba.

If the report is adopted, Mr Basajjabalaba is likely to walk away with huge sums of money in compensation.

The committee confirmed that Mr Basajjabalaba is the rightful owner of the abattoirs located on Plot 1 and 3 Old Portbell Road, which he obtained through a lease obtained from Kampala City Council in March 2001.

"Basajjabalaba Hides and Skins Co. Limited is currently the registered proprietor in respect of the sublease and the said sublease is still subsisting; the allegations of irregular/secret award of the lease have never been a subject of adjudication in court," reads the report.

Contract with KCC

The MPs note as the lease holder, Kampala City Council (KCC) entered into the management contract with company for five years renewable on condition that the latter fulfils a monthly payment of Shs20 million exclusive of taxes.

In June the same year, KCC subleased the abattoir to Basajjabalaba's company for 49 years at a premium payment of Shs600m, a going concern of Shs900m and annual ground rent of Shs2.9m with immediate effect.

A going concern is an accounting term for a company that has the resources to continue making enough money to stay afloat for the foreseeable future.

However, save for the payment of premium and initial ground rent, the company has never made subsequent payments, including an outstanding balance worth Shs450m for going concern and ground rent, citing frustrations and illegal occupation of the facility by the vendors association.

The facility continues to be occupied by the trader's association on permission of KCCA.

The committee also faults KCCA for harbouring the trader who frustrated the "construction of ultramodern slaughter and meat handling facility" through "an illegal and forceful take over."

Whereas the traders association contended that their action was against the government policy of tendering markets and parks to sitting tenants who derive sustenance from such facilities, the lawmakers noted in their report that "there was no law preventing KCCA from subleasing the property to Basajjabalaba [and that] the alleged irregularities therefore did not constitute illegalities and cannot affect the interests of the company."

Background to Basajjabalaba-CATDA woes

After acquiring the 49 year lease Mr Basajjabalaba subleased the same facility to a one Dan Kwatampora. Drama ensued when Mr Kwatampora wanted to change the land use from abattoir to a bus terminal something that angered the vendors who united under their umbrella of City Abattoir Traders Development Association (CATDA) Limited to evict Basajjabalaba's company and Mr Kwatampora.

Mr Kwatampora subsequently sued Mr Basajjabalaba, winning a settlement fee of Shs1.5b.

With continued adamancy of the traders' associations which is backed by a presidential directive, the investor, Mr Basajjabalaba announced a loss of interest in the facility and demanded his compensation, something the MPs supported.

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