The National Social Security Fund (NSSF) investment plans in real estate have stalled over the last three years due to unwieldy bureaucracy, the fund’s managing director, Richard Byarugaba, has said.Because of this, NSSF top management has decided to invest in Kenyan bonds because they do not requi
By Moses Walubiri
The National Social Security Fund (NSSF) investment plans in real estate have stalled over the last three years due to unwieldy bureaucracy, the fund’s managing director, Richard Byarugaba, has said.
Because of this, NSSF top management has decided to invest in Kenyan bonds because they do not require seeking affirmation from a multiplicity of stakeholders, which often takes a long time.
For NSSF to invest in the real estate market in Uganda, management has to get a nod from the Solicitor General, Minister of Finance, Chief Government Valuer and the Public Procurement and Disposal of Public Assets Authority.
Projects that have been affected are Pension Towers and housing estates in Temangalo and Buloba.
“Investment in real estate in Uganda is such a hurdle because there are so many layers of offices whose approval is required yet they are beyond our control. The tendering process of these projects tends to be drawn out, which makes the fund lose investment opportunities,” Byarugaba said during the monthly CEO apprenticeship club at Serena Kampala Hotel recently.
Byarugaba noted that such red tape makes initial cost on potential investment hard to achieve as exemplified by the stalled multibillion Pension Tower project.
The project, whose contract was signed on in April 2008, had its cost first shoot up from sh36b to sh120b by 2008, prompting Parliament to summon NSSF chiefs to explain.
The then NSSF chairman, David Chandi Jamwa, attributed the rise to extensive changes in the project design.
But by the beginning of 2009, the cost had risen to sh147b and it is expected to shoot up to $120m (sh312b) upon completion.
The entire complex, which consists of three joint towers; two of them having 10 stories each, and another having 23 stories, will cover 60,000 square meters.
Byarugaba had in March 2012 said the second phase was expected to be complete within three years – meaning it will be finished by 2015, but the cancellation of the tendering process early this year by the Inspector General of Government is likely to affect it.
The first phase of the project was supposed to be completed in two years, but took longer after a retainer wall collapsed in October 2008, killing seven workers and leaving scores injured. The construction was supposed to begin on in April 2008 and end by May 2010.
But after the tragedy, the works dragged on up to January 2012 when Roko completed the first phase.
The CEO apprenticeship club is a special mentoring programme for potential leaders in the corporate sector launched in 2012 by Finance Minister Maria Kiwanuka.
Red tape frustrating NSSF investment plans