5 April 2019

Uganda Risks Losing Shs924b Cement Investment to Kenya

Kampala — The managing director of Hima Cement has told the Commission of Inquiry into Land Matters that Uganda is at the brink of losing $250m (about Shs924b) investment to Kenya because of difficulties associated with land acquisition in the country.

Mr Nicolas George said Hima Cement's parent company LafargeHolcim took a decision to invest $250m in Uganda, Kenya, Tanzania, Zambia and Zimbabwe.

"We have been wondering where to invest money and Uganda was our number one destination but it is likely to lose the opportunity to Kenya where it is easy to acquire land," Mr George said yesterday.

He was appearing before the land probe to explain his company's role in acquiring surface rights in Mwello Parish in Tororo District.

Mwello residents had petitioned the land probe accusing Hima Cement of buying their communal land from individuals at give-away prices.

Mr George said speculators had made the company's work difficult for seven years now, adding that it had tried to start a factory in Moroto but failed.

"Whenever we go as Hima, we are confronted by speculators who push land prices 20 times high," he said.

Mr George said for the last one year, he has tried to buy limestone deposits but speculators with exploration licences have made it difficult.

"When you go to talk to them they tell you to put down $2m (about Shs7.4b) before they allow you to carry out tests. I challenge you to find a square mile of land where someone does not have an exploration licence," Mr George said.

Concerns

He expressed surprise that some of the speculators holding exploration licences are closely linked to officers working with the Directorate of Geological Survey and Mines.

Mr George wants government to revoke exploration licences issued to persons who have no financial muscle to exploit minerals if not utilised within two years.

Mr George, who took over as managing director in February last year, took responsibility for the mess created by their agent while acquiring land in Mwello and accepted to hand back the land to the residents.

"Actions taken by our contracted agent in the acquisition of the land did not meet our high standards of due process and transparency. We, therefore, took a decision not to source our aggregate from the land," he said.

The company hired Optima mines and minerals to help them acquire surface rights on 29 acres of land in Mwello to extract stones to build their factory in Tororo and also supply the SGR railway.

Although Hima paid Shs600m to acquire surface rights from locals and another $100,000 (Shs370m) in fees to Optima mines, they lost the money to clear their image.

Mr George said the company had instituted internal investigations into the matter and decided that he negotiates with the community directly.

Justice Catherine Bamugemereire, the commission chairperson, welcomed the company's decision to return the land and promised to interact with Directorate of Survey and Mines to establish what went wrong.

She directed Hima lawyers to mediate with the affected residents to see how to resolve the issue.

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