Funding slows Namanve development
A FUNDING hitch has hit the Uganda Investment Authority (UIA), threatening the due completion of the Kampala Industrial and Business Park (KIBP) projec
By Joel Ogwang
A FUNDING hitch has hit the Uganda Investment Authority (UIA), threatening the due completion of the Kampala Industrial and Business Park (KIBP) project.
The joint venture, sitting on 896 ha of land at Namanve, about 11kms along the Kampala-Jinja highway, is estimated at $150m (about sh350b) and funded under a credit agreement between the Government and the World Bank.
Sources at UIA intimated that under-funding was holding back the industrial parks development.
This would also leverage UIA’s five-year investments strategy of creating at least a million jobs by 2012 and fast-tracking Uganda as a middle-income economy from the present ‘third-world’ status.
KIBP is one of the 22 zoned industrial parks the Government plans to set-up in the country in a hearty move geared at creating more jobs and widening national taxable-base.
Gulu, Arua, Lira, Mbale, Moroto, Tororo, Iganga, Rakai, Mubende, Luwero, Jinja, Nakaseke and Soroti will house the other parks.
Status of KIBP
The project’s first phase of earth works and major works, was from a $26m (about sh60.5b) loan from the World Bank, that commenced in June 2008. It wound-up in March 2010.
“We used part of the funding (from the Bank) for earthworks that involved opening-up internal road networks to sub-grade level,†said Dr. Maggie Kigozi, the UIA Executive Director. Other works included digging River Namanve drainage, setting-up materials testing laboratory, engineers’ and UIA offices.
Spencon services Ltd won the sh10b deal, with TYPSA as the consulting agency. The money that remained was carried forth to finance major works, projected to last 24-months.
It will involve paving roads, construction and installation of water distribution networks and sewerage.
An underground power distribution network, a fibre communication infrastructure and a fly-over across the highway, connecting the north estate (Coca Cola plant) to the south estate (UIA liaison office), will also be erected.
Expected output
Once completed, the $2.9b in investments will be realised from the 272 large companies that intend to establish their plants at Namanve, creating 70, 000 jobs directly,
“We need to encourage big investments to create jobs and raise government revenues through the taxes they pay,†Kigozi.
Funding hitch
“If we had all the money, we would finish everything in four-years at most. But we have funding challenges,†says Arthur Bwire, the UIA industrial parks development division director.
Apparently, UIA needs about sh178b to wind-up KIBP. UIA plans to sell and lease land to the 272 companies to cut on the deficit.
UIA is offering industrial land at $80, 000 (about sh184m) an acre after cabinet in April 2009 approved a land pricing policy.
Some of the companies that got land based on PPDA guidelines are Roofings rolling mills, National Housing and Uganda Baati.
UIA intends to garner sh128b from land sale and lease, but a shortfall of sh50b would stay. The investments regulator expects the government and donors to step-in and fix the shortfall.
“We are still talking to government about it, but you know this is an election period. We can’t do much,†says Bwire.
Second phase in offing
Kigozi says there are adequate resources to kick-start the second-phase.
The contract for major works has already been advertised. It will soon be awarded subject to clearance from the Solicitor-General, says Kigozi. “We already have some money to work on South A, B and C, but we are still waiting for a no-objection from the World Bank to flag-off major works,†she says.
It was expected that this would come off by January 2011, but hasn’t come forth. But the bank says KIBP works contract delayed for over two years due to insufficient technical capacity at UIA to provide oversight in preparation of the bidding documents.
Following this delay, the bidding document was only submitted for the bank’s review in August 2010 instead of the previously envisaged date of August 2008, says Steven Shalita, the World Bank’s Africa Region External communications specialist
“Subsequently, bids for civil works were received on October 13, 2010. The World Bank received the Bid Evaluation Report on November 9, 2010,†he says.
Based on this review, on February 18, 2011 the Bank requested further clarification and are still awaiting a response from UIA.†The size and complexity of the contract requires extensive due diligence on the part of the Bank and the Government.
“If UIA had strong project and procurement experts from the start, the delays could have been minimised,†he says.
To fast-track potential investors, UIA has established a liaison office that will also showcase available space at Namanve. “It will ease our communication with potential investors who want to acquire industrial land at Namanve,†says Bwire.
Land bonanza?
The media has, in the recent past, been alleging that none of the investors had paid for land at Namanve.
At present, only Century Bottling Company, the manufacturers of Coca Cola beverage products and Roofings Rolling Mills, are in business.
“If an investor wants land, he/ she pays for it,†says Kigozi. “It is not true that investors have refused or failed to pay for land, but the cost of land is small money. We are interested in their billions and jobs.â€
Roofings acquired a 30-acre land at Namanve and invested $8.5m in making galvanised wires and razor-wires for fencing and chain links a month later. President Yoweri Museveni commissioned it in September 2010.
“We have three phases and when all are executed, we will have invested $112m and created 800 jobs directly,†says Anoop Kumar, the manager.
Nonetheless, UIA has offered firms dealing in priority areas like agro-processing & value addition, information and communication technology (ICT).
However, the cost of KIBP land varied against other countries courting investors, is a giveaway, says Kigozi.
“In other countries like Kenya, industrial land goes for $150, 000 (about sh350m). But we are offering a subsidised rate of $80, 000 for an acre to attract as many investors as we can,†she says.
A side from the funding hitch, the long procurement process is also a draw-back to the project.
When contacted for the initial lifespan of the project that started in 2008, Bwire responded: “Funds allowing, we would complete everything in three years, but you have to incur another year for the procurement processes which is disturbing,†says Bwire.
However, the Public Procurement and Disposal of Public assets Authority blamed the UIA for this.
“The procurement process lies in their (UIA) hands. If you know that the procurement process will be long, you have to start it earlier so as not to be late or take longer time. They (UIA) should blame themselves, not PPDA,†says Edgar Agaba, the PPDA executive director.
As well, the National Water and Sewerage Corporation and Umeme, the national power supplier, have been accused of not fully facilitating KIBP with water and electricity.
Dr. William Muhairwe, the NWSC chief, dismissed the allegation, saying there is a water pipeline that runs from Ggaba to Seeta and Mukono towns through Namanve.
“If there is any company that wants water, they should approach us. If there is a special project in which we have to deliver water, we should be included at the planning stage,†he said.
A FUNDING hitch has hit the Uganda Investment Authority (UIA), threatening the due completion of the Kampala Industrial and Business Park (KIBP) project.
The joint venture, sitting on 896 ha of land at Namanve, about 11kms along the Kampala-Jinja highway, is estimated at $150m (about sh350b) and funded under a credit agreement between the Government and the World Bank.
Sources at UIA intimated that under-funding was holding back the industrial parks development.
This would also leverage UIA’s five-year investments strategy of creating at least a million jobs by 2012 and fast-tracking Uganda as a middle-income economy from the present ‘third-world’ status.
KIBP is one of the 22 zoned industrial parks the Government plans to set-up in the country in a hearty move geared at creating more jobs and widening national taxable-base.
Gulu, Arua, Lira, Mbale, Moroto, Tororo, Iganga, Rakai, Mubende, Luwero, Jinja, Nakaseke and Soroti will house the other parks.
Status of KIBP
The project’s first phase of earth works and major works, was from a $26m (about sh60.5b) loan from the World Bank, that commenced in June 2008. It wound-up in March 2010.
“We used part of the funding (from the Bank) for earthworks that involved opening-up internal road networks to sub-grade level,†said Dr. Maggie Kigozi, the UIA Executive Director. Other works included digging River Namanve drainage, setting-up materials testing laboratory, engineers’ and UIA offices.
Spencon services Ltd won the sh10b deal, with TYPSA as the consulting agency. The money that remained was carried forth to finance major works, projected to last 24-months.
It will involve paving roads, construction and installation of water distribution networks and sewerage.
An underground power distribution network, a fibre communication infrastructure and a fly-over across the highway, connecting the north estate (Coca Cola plant) to the south estate (UIA liaison office), will also be erected.
Expected output
Once completed, the $2.9b in investments will be realised from the 272 large companies that intend to establish their plants at Namanve, creating 70, 000 jobs directly,
“We need to encourage big investments to create jobs and raise government revenues through the taxes they pay,†Kigozi.
Funding hitch
“If we had all the money, we would finish everything in four-years at most. But we have funding challenges,†says Arthur Bwire, the UIA industrial parks development division director.
Apparently, UIA needs about sh178b to wind-up KIBP. UIA plans to sell and lease land to the 272 companies to cut on the deficit.
UIA is offering industrial land at $80, 000 (about sh184m) an acre after cabinet in April 2009 approved a land pricing policy.
Some of the companies that got land based on PPDA guidelines are Roofings rolling mills, National Housing and Uganda Baati.
UIA intends to garner sh128b from land sale and lease, but a shortfall of sh50b would stay. The investments regulator expects the government and donors to step-in and fix the shortfall.
“We are still talking to government about it, but you know this is an election period. We can’t do much,†says Bwire.
Second phase in offing
Kigozi says there are adequate resources to kick-start the second-phase.
The contract for major works has already been advertised. It will soon be awarded subject to clearance from the Solicitor-General, says Kigozi. “We already have some money to work on South A, B and C, but we are still waiting for a no-objection from the World Bank to flag-off major works,†she says.
It was expected that this would come off by January 2011, but hasn’t come forth. But the bank says KIBP works contract delayed for over two years due to insufficient technical capacity at UIA to provide oversight in preparation of the bidding documents.
Following this delay, the bidding document was only submitted for the bank’s review in August 2010 instead of the previously envisaged date of August 2008, says Steven Shalita, the World Bank’s Africa Region External communications specialist
“Subsequently, bids for civil works were received on October 13, 2010. The World Bank received the Bid Evaluation Report on November 9, 2010,†he says.
Based on this review, on February 18, 2011 the Bank requested further clarification and are still awaiting a response from UIA.†The size and complexity of the contract requires extensive due diligence on the part of the Bank and the Government.
“If UIA had strong project and procurement experts from the start, the delays could have been minimised,†he says.
To fast-track potential investors, UIA has established a liaison office that will also showcase available space at Namanve. “It will ease our communication with potential investors who want to acquire industrial land at Namanve,†says Bwire.
Land bonanza?
The media has, in the recent past, been alleging that none of the investors had paid for land at Namanve.
At present, only Century Bottling Company, the manufacturers of Coca Cola beverage products and Roofings Rolling Mills, are in business.
“If an investor wants land, he/ she pays for it,†says Kigozi. “It is not true that investors have refused or failed to pay for land, but the cost of land is small money. We are interested in their billions and jobs.â€
Roofings acquired a 30-acre land at Namanve and invested $8.5m in making galvanised wires and razor-wires for fencing and chain links a month later. President Yoweri Museveni commissioned it in September 2010.
“We have three phases and when all are executed, we will have invested $112m and created 800 jobs directly,†says Anoop Kumar, the manager.
Nonetheless, UIA has offered firms dealing in priority areas like agro-processing & value addition, information and communication technology (ICT).
However, the cost of KIBP land varied against other countries courting investors, is a giveaway, says Kigozi.
“In other countries like Kenya, industrial land goes for $150, 000 (about sh350m). But we are offering a subsidised rate of $80, 000 for an acre to attract as many investors as we can,†she says.
A side from the funding hitch, the long procurement process is also a draw-back to the project.
When contacted for the initial lifespan of the project that started in 2008, Bwire responded: “Funds allowing, we would complete everything in three years, but you have to incur another year for the procurement processes which is disturbing,†says Bwire.
However, the Public Procurement and Disposal of Public assets Authority blamed the UIA for this.
“The procurement process lies in their (UIA) hands. If you know that the procurement process will be long, you have to start it earlier so as not to be late or take longer time. They (UIA) should blame themselves, not PPDA,†says Edgar Agaba, the PPDA executive director.
As well, the National Water and Sewerage Corporation and Umeme, the national power supplier, have been accused of not fully facilitating KIBP with water and electricity.
Dr. William Muhairwe, the NWSC chief, dismissed the allegation, saying there is a water pipeline that runs from Ggaba to Seeta and Mukono towns through Namanve.
“If there is any company that wants water, they should approach us. If there is a special project in which we have to deliver water, we should be included at the planning stage,†he said.