Karim ordered to refund sh4b for CHOGM
Aug 14, 2009
IMPERIAL Royale Hotel Kampala faces court action if it fails to refund $1.6m (about sh3.4b) which the Government advanced to it for the accommodation of the Commonwealth Heads of Government Meeting (CHOGM) delegates in 2007.
By Anne Mugisa
IMPERIAL Royale Hotel Kampala faces court action if it fails to refund $1.6m (about sh3.4b) which the Government advanced to it for the accommodation of the Commonwealth Heads of Government Meeting (CHOGM) delegates in 2007.
Several attempts to recover the money had failed, the foreign affairs ministry said and it was time to sue the hotel. Accordingly, the ministry has asked the Solicitor General to take legal action against the hotel, which is owned by city tycoon Karim Hirji.
Solicitor General Bill Kainamura said: “We will give them notice and if they fail to act, we will file the case in court.â€
In a letter of July 6, 2009, Permanent Secretary James Mugume said Imperial Botanical Hotel, Entebbe, which also belongs to Karim Hirji, owed the Government an unspecified amount of money advanced to it to host the youth forum of CHOGM.
Sources said Imperial Royale Hotel, on its part, received $2,6m (about sh5.4b) from the Government to guarantee accommodation. The hotel would recover the amount by charging the guests. CHOGM guests were charged about $500 a night.
However, the ministry said, the hotel was not ready for occupation when the meeting started and the guests were forced to find accommodation elsewhere.
Now the ministry says the money must be refunded. “Take legal steps towards recovery of the money,†Mugume said in the letter.
Karim Hirji’s hotels were not the only beneficiaries of the policy. Other private investors got millions of dollars to upgrade their hotel facilities. Some of the hotels, such as the Speke Resort Munyoyo, Serena, Golf Course and Sheraton Hotel, all located in Kampala, have paid up.
The ministry said 217 of the 300 rooms at the Imperial Royale Hotel should have been occupied by journalists. The other 100 rooms were booked for the business community.
Efforts to get a comment from the management of the five-star hotel were futile. However, in their correspondence with the ministry, they said their facility was ready, but the guests either did not come or sought cheaper accommodation elsewhere.
The management also noted that some of the guests, especially journalists, opted to stay elsewhere to avaoid the strict security detail of the Queen, who was staying at Serena Hotel, metres away from the Imperial Royale. As such, they said, the hotel cannot be blamed for this. Instead, the management advised the ministry to recover $400,000 in Value Added Tax (VAT) from the Uganda Revenue Authority since the rooms were never occupied.
However, Mugume said VAT refund could only be made to the service provider and not to a third party and the hotel management had not yet sought the refund.
IMPERIAL Royale Hotel Kampala faces court action if it fails to refund $1.6m (about sh3.4b) which the Government advanced to it for the accommodation of the Commonwealth Heads of Government Meeting (CHOGM) delegates in 2007.
Several attempts to recover the money had failed, the foreign affairs ministry said and it was time to sue the hotel. Accordingly, the ministry has asked the Solicitor General to take legal action against the hotel, which is owned by city tycoon Karim Hirji.
Solicitor General Bill Kainamura said: “We will give them notice and if they fail to act, we will file the case in court.â€
In a letter of July 6, 2009, Permanent Secretary James Mugume said Imperial Botanical Hotel, Entebbe, which also belongs to Karim Hirji, owed the Government an unspecified amount of money advanced to it to host the youth forum of CHOGM.
Sources said Imperial Royale Hotel, on its part, received $2,6m (about sh5.4b) from the Government to guarantee accommodation. The hotel would recover the amount by charging the guests. CHOGM guests were charged about $500 a night.
However, the ministry said, the hotel was not ready for occupation when the meeting started and the guests were forced to find accommodation elsewhere.
Now the ministry says the money must be refunded. “Take legal steps towards recovery of the money,†Mugume said in the letter.
Karim Hirji’s hotels were not the only beneficiaries of the policy. Other private investors got millions of dollars to upgrade their hotel facilities. Some of the hotels, such as the Speke Resort Munyoyo, Serena, Golf Course and Sheraton Hotel, all located in Kampala, have paid up.
The ministry said 217 of the 300 rooms at the Imperial Royale Hotel should have been occupied by journalists. The other 100 rooms were booked for the business community.
Efforts to get a comment from the management of the five-star hotel were futile. However, in their correspondence with the ministry, they said their facility was ready, but the guests either did not come or sought cheaper accommodation elsewhere.
The management also noted that some of the guests, especially journalists, opted to stay elsewhere to avaoid the strict security detail of the Queen, who was staying at Serena Hotel, metres away from the Imperial Royale. As such, they said, the hotel cannot be blamed for this. Instead, the management advised the ministry to recover $400,000 in Value Added Tax (VAT) from the Uganda Revenue Authority since the rooms were never occupied.
However, Mugume said VAT refund could only be made to the service provider and not to a third party and the hotel management had not yet sought the refund.