Government sued over sh640b
Aug 18, 2008
UGANDAN taxpayers may foot $400m (over sh640b) if the Government loses a case against an Indian investor.
By Hillary Nsambu
UGANDAN taxpayers may foot $400m (over sh640b) if the Government loses a case against an Indian investor.
Dura Cement Ltd sued the Government in the Commercial Court seeking to recover the money as compensation for allegedly canceling their cement mining lease concession without notice or explanation.
The claim is for costs and expenses incurred, loss of earnings and damages.
They said the Government had leased 473.5 hectares of land in Burahya, Kamwenge district to them to also construct dams for electricity generation.
Dura added that they did surveys and submitted a business plan for the establishment of another cement factory in the area.
The firm said it spent money to pay statutory fees like stamp duty and license fees and bought an additional 30 acres of land to build staff houses plus training and medical centres.
The investors have asked court to compel the Government to reinstate their lease and declare that the cancellation was illegal.
However, in a written defence, the Attorney General (AG), denied the allegations and asked the court to dismiss the case with costs.
The AG argued that that if there was cancellation of the lease, it was done lawfully and in national interest to boost the existing factory, Hima Cement.
To this, the investors responded that by calling them to start the factory, the Government had indicated that it wanted to save funds spent on importing cement from Kenya.
The State also argued that it wanted to enhance competition by ending the monopoly of the Lafarge Group/Hima Cement.
However, when the case came up for mediation on Friday at the court, the registrar, Vincent Mugabo, threw out journalists at the lawyers’ request
Peter Kabatsi, Sam Mayanja and Joseph Matsiko of Kampala Associated Advocates, represented Dura Cement, while senior state attorney, Henry Oluka, represented the Attorney General.
A source said it was after the Lafarge Group failed to mobilise resources to take the deal that the Government invited Dura Cement to establish the factory.
UGANDAN taxpayers may foot $400m (over sh640b) if the Government loses a case against an Indian investor.
Dura Cement Ltd sued the Government in the Commercial Court seeking to recover the money as compensation for allegedly canceling their cement mining lease concession without notice or explanation.
The claim is for costs and expenses incurred, loss of earnings and damages.
They said the Government had leased 473.5 hectares of land in Burahya, Kamwenge district to them to also construct dams for electricity generation.
Dura added that they did surveys and submitted a business plan for the establishment of another cement factory in the area.
The firm said it spent money to pay statutory fees like stamp duty and license fees and bought an additional 30 acres of land to build staff houses plus training and medical centres.
The investors have asked court to compel the Government to reinstate their lease and declare that the cancellation was illegal.
However, in a written defence, the Attorney General (AG), denied the allegations and asked the court to dismiss the case with costs.
The AG argued that that if there was cancellation of the lease, it was done lawfully and in national interest to boost the existing factory, Hima Cement.
To this, the investors responded that by calling them to start the factory, the Government had indicated that it wanted to save funds spent on importing cement from Kenya.
The State also argued that it wanted to enhance competition by ending the monopoly of the Lafarge Group/Hima Cement.
However, when the case came up for mediation on Friday at the court, the registrar, Vincent Mugabo, threw out journalists at the lawyers’ request
Peter Kabatsi, Sam Mayanja and Joseph Matsiko of Kampala Associated Advocates, represented Dura Cement, while senior state attorney, Henry Oluka, represented the Attorney General.
A source said it was after the Lafarge Group failed to mobilise resources to take the deal that the Government invited Dura Cement to establish the factory.