Our attention is drawn to the media articles about the withdrawal of land from a company Universal Granite and Marble in Kampala Industrial and Business Park, Namanve. Whereas it is not our policy to publically conduct the Authority’s affairs in the media, Uganda Investment Authority (UIA) wishes to correct the several inaccuracies that were reported in that story.
It is true that Universal Granite and Marble (UGM) was licenced in 2014 under investment licence no SSD 112522/48219 for setting up a granite polishing factory. The shareholders of the company who are from India where and submitted documentation relating to their experience and capacity in handling similar businesses. Hence a land offer of 10 acres in Namanve was made to the Company in March 2015. The Land offer was free of charge on condition that the company invests USD 7.5 Million Dollars, employs 500 Ugandans and commences physical construction of the factory within 18 months from date of offer.
Four years later, the Company had still failed to utilise the land for the intended project contrary to tThe UIA land allocation guidelines which only allow the Company 18 months to start the physical construction of the project. Three notices were sent to the Company informing them about the intended cancellation of lease offer and responses were unsatisfactory however in the spirit of investor facilitation, UIA extended their lease for another two and a half years beyond the mandatory 18 months and still no development happened.
Instead of developing the land, Universal Granite applied to mortgage the vacant land with Barclays Bank ltd and later applied to transfer the land to Bothra Finvest Ltd. This was clear indication that the company had not yet gained financial capacity to develop the factory.
It is true that three land withdrawal notices were sent to the Company however these are not targeted to Universal granite alone and in fact the January 2019 withdrawal lot had Eight affected companies whose development time had expired. were affected. The reasons for withdrawal of Universal Granite were very clear as indicated below:
– There was no physical development on the ground four years after land had been offered. The company hadn’t even bothered to process a land title over their allocated land.
– Universal Granite had applied for a transfer of 99% of their shares to another Company Bothra Finvest Private Limited indicating they had no funds to run the project.
– Universal Granite also submitted a request to mortgage the Government land to secure financing of 2.5 Million Dollars from Barclays Bank Uganda and execute a legal mortgage over the land before developing the land. This was contrary to the UIA policy.
– It took the Company over one year to secure a performance bond bank guarantee which ordinarily is submitted in 30 days. This indicated lack of capacity and willingness to develop the land. The guarantee expired on 31st July 2018 without any development on the ground.
– The Company had failed to secure mining licences to start processing the raw materials for the factory.
– UIA had already issued 3 withdrawal notices over a 3 year period for non-development of the land.
Faced with the overwhelming number of land applications from ready investors, the land was finally withdrawn in January 2019 and reallocated to another investor.
It is at the point that the company started processing building plans approval which were tendered in to UIA in February 2019 and the investor attempted to now start clearing the land well knowing that the rights to this land had been rescinded by the Lessor.
It is false to state that the Company had injected 3 Billion shillings in developing building plans in Mukono District and an EIA report from NEMA. The actual cost of processing these two documents does not exceed 10 million shillings and these are processed within a maximum of three months and not four years as indicated by Universal Granite.
The Company was stopped from accessing the land when they attempted to bring a grader in February 2019 after the land rights had been withdrawn and the land already reallocated to a different investor for the development of an agricultural machinery and equipment assembling plant which is equally important to the Ugandan economy. The trespass fine fees charged were three hundred thousand shillings (UGX 300,000/-) and NOT ten million as alleged by the investor.
UIA allocated this land free of charge to Universal Granite and the intention was to create employment for Ugandans, generate taxes and introduce new technology from India. All these were never realised in the four years that the company held the land hence there was all justification to reallocate this land and in fact the new investor took possession of the vacant site and commenced site development within three months only to be halted by Internal Security Organisation (ISO).
Universal Granite submitted documents relating to purchase and shipment of the factory machinery in 2014. Industrial Machinery doesn’t take 4 years in transit from India to Uganda. If the machinery was meant for the Namanve site then it would already have been installed and running but at time of withdrawal the site was vacant and undeveloped.
UIA’s land withdrawal policy has worked effectively on weeding out speculators that were holding land without any activity. Since 2013, UIA has withdrawn land from 123 idle Companies in the Industrial Park which has been reallocated to ready investors. As a positive result, Namanve alone currently has 50 operational industries and another 120 industries are in the construction stage awaiting to be commissioned by February 2020. H.E the President has already launched 10 operational industries in the Industrial Park and more projects have been shortlisted for launching within the second quarter of 2019/20. The Industrial Park has to date created over 20,000 direct jobs and an additional 120,000 indirect jobs along the value chain. With this positive trend, Uganda is surely headed towards the realisation of the middle income status as planned in the NDP II.
On 26th February 2019, UIA received an appeal from Internal Security Organisation (ISO) to reconsider Universal Granite for land stating that they were now ready to move on with the project. UIA advised the company to reapply with evidence of financial capacity to carry on the project and hence in June 2019, the Company was offered a fresh land offer of 5 acres for an available plot in the Park. The investor has still not taken possession of the new plot of land and has instead resorted to a media response as the permitted development time starts ticking away.
ISO has deployed armed military personnel in the Industrial Park which has interfered with Investors development projects and UIA continues to engage the ISO leadership to allow the UIA to exercise its mandate as given by the Investment Code Act 2019. ffffffffffff