Govt defends Uganda Air Cargo, UAE firm aviation deal

KAMPALA - The Government has defended the joint venture between Uganda Air Cargo Corporation (UACC) and Alpha MBM last year.

Alpha MBM Aviation is a helicopter Maintenance, Repair, and Overhaul (MRO) firm based in Dubai, United Arab Emirates.

The company is reportedly controlled by Sheikh Mohammed Bin Maktoum Bin Juma Al Maktoum, a member of the United Arab Emirates (UAE) royal family.

On the other hand, Uganda Air Cargo Corporation (UACC), which was established by an Act of Parliament in 1994, offers local, regional and international chartered cargo and passenger flight services.

Summon

The deal, notably, was at the centre of last week’s engagement between MPs on the House Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) chaired by Busiro East MP Medard Ssegona (NUP) and UACC officials led by Lt. Gen. Nakibus Lakara.

In its parting shot, the committee summoned Defence Minister Jacob Oboth and his team to appear in person and further elaborate on the joint venture deal.

Air asset constraints

Addressing MPs on Tuesday, July 29, 2025, Permanent Secretary (PS) Rosette Byengoma dismissed fears of impropriety, explaining that the agreement came at a time when UACC was grappling with longstanding air asset constraints.

She noted that alternative options, such as leasing or direct acquisition of aircraft, had been under consideration but proved unfeasible.

For instance, she pointed out that aircraft were often not readily available on demand to transport UPDF troops and equipment to and from mission areas such as Somalia.

“On top, Uganda Air Cargo Aircraft C-130 was most of the time grounded due to technical and mechanical defaults, which made it unreliable for the transportation of troops and equipment,” Byengoma pointed out.

“Number three was that the joint venture partner offered a better option. Not only to Uganda Air Cargo corporation but for the entire transportation industry of Uganda. The joint venture through MBM proposed to bring seven aircrafts and they were supposed to start with two of them. This was for Uganda Air Cargo’s business,” she further explained.

This was to be done while UACC was upgrading its aircraft and related facilities, such as hangars. Hangars are large structures for storing aircraft. Which, in their opinion, would also be used by other players in the aviation industry, like Uganda Airlines.

Adding that MBM had also committed to promoting Ugandan goods abroad. An arrangement they considered more favourable in terms of medium- and long-term business prospects.

“For example (deal), it would entail training of Uganda Cargo Corporation staff by the joint venture and at their own cost. There was also a leasing or direct acquisition of aircraft, which was too expensive for us and, financially, untenable due to, of course, our financing constraints,” Byengoma disclosed.

“Because you know that we've been before parliament, before requesting for money to support Uganda Air Cargo Corporation. And, we're given some money, yes, but which up to now we haven't received,” she alluded.

Medard Lubega Sseggona (Busiro East), the COSASE chairperson, is chairing the committee meeting. (Credit: Edith Namayanja)

President Museveni, Maktoum meeting

Amidst these developments, one may ask: how was this deal struck and by whom?

According to permanent secretary Rosette Byengoma, the decision for Uganda Air Cargo Corporation (UACC) to partner with Alpha MBM originated from a discussion between President Yoweri Museveni and His Highness Sheikh Mohammed Bin Maktoum Bin Juma Al Maktoum.

During their meeting, the two leaders agreed that the Maktoum would invest in UACC.
Following this high-level engagement, a delegation led by Sheikh Mohammed visited Uganda and held a follow-up meeting with officials from the defence ministry on May 11, 2023, at the Kampala Serena Hotel.

Representing Uganda at the meeting were the Minister of Defence and Veteran Affairs, the Permanent Secretary, the General Manager of UACC, a representative from the Attorney General’s Chambers and a finance officer from UACC, among others.

“Pursuant to that meeting and decision and following the approval of the joint venture by cabinet, the Ministry of Defence and Veteran Affairs generated the draft joint venture agreement in collaboration with Uganda Air Cargo Corporation, the Ministry of Finance, Planning and Economic Development (MOFPED), the Ministry of Works, Ministry of Lands and the Attorney General, drafted the joint venture agreement,” Byengoma disclosed.

“The joint venture agreement was cleared by the solicitor general, for signature by the parties and thereafter executed by the parties on 05/22/2024.”

According to Byengoma, UACC was fully involved and participated in all the processes leading to this right from the beginning. Such as one of June 7, 2023, that took place at Uganda Air Cargo Corporation Boardroom in Entebbe and several others with President Museveni at State House and at the Prime Minister’s office.

Particulars of the company

The joint venture company known as Uganda Air Cargo International Limited was duly incorporated on March 28, 2025. According to Oboth, the aforementioned entity is a special-purpose vehicle which shall handle business between Uganda Air Cargo and Alpha MBM. Under the arrangement, Alpha MBM holds 60 percent while UACC has 40 per cent shares.

“They will have a joint account. Everything, the way it should be run, is all incorporated there,” he explained.

Delayed implementation

However, Bukimbiri County MP Eddie Kwizera raised concerns about the obligations of both parties.

It then emerged that Uganda had failed to meet its commitments under the agreement. While MBM was reportedly ready from the outset, MPs were told that Uganda had yet to fulfil key obligations, among them, providing land at Entebbe Airport.

“Honourable chair, land was allocated. But there were issues because it was close to the VVIP hangar. So, we wrote to the Uganda Civil Aviation Authority (CAA) for allocation of land elsewhere, away from the VVIP hangar…It wasn’t provided,” Lt. Gen. Lakara admitted.

“Can you share a letter from Civil Aviation because they are also coming here?” Ssegona ordered.

Another unresolved issue is the flagship and route rights, which are yet to be granted. MPs also heard that an aircraft MBM had brought to Entebbe, intended to demonstrate the company’s capacity, was flown back to Dubai and has not returned since.

This, according to Committee Chairperson Medard Ssegona, may have forced UACC to resort to chartering and leasing aircraft, thereby placing an undue financial burden on taxpayers.

“You are here negotiating a joint venture in which you are going to be provided with seven aircraft. You are at the same time in the United States of America, negotiating to get an aircraft that you are more or less going to get for free. You were negotiating with a view to leasing or even purchasing it in the event that the owner is interested. Why is it that you are working on two fronts?” Ssegona inquired.

“Did you have board approval. You will provide us with minutes,” he ordered.
However, Lakara explained that this was something that had been long in the pipeline.