Govt must not repeat old mistakes
May 11, 2009
EDITOR—When the Government gave away two prime chunks of land to investors more than three years ago, there were mixed feelings. A section of society went up in arms and questioned the land allocation.
EDITOR—When the Government gave away two prime chunks of land to investors more than three years ago, there were mixed feelings. A section of society went up in arms and questioned the land allocation.
But the Government argued that the allocations were an effort to build hotels ahead of the Commonwealth Heads of Government Meeting (CHOGM) in November 2007. The hotels would also boost tourism and ultimately create employment, it was argued.
However, none of the hotels was ready by the time the CHOGM took place.
The Shimoni project has never taken off, but the Aya Group, in spite of many challenges, is finally delivering what is going to be Uganda’s biggest five- star hotel.
The land formerly occupied by Shimoni Primary School remains an eye sore and resurrects the question: What formula does the Government use when allocating land to investors?
Kingdom Holdings was supposed to build a five-star hotel and shopping mall as well as apartments.
There are many lessons to learn from the allocation of land to investors. Local investors who have been tested should be given priority. Probably if the Shimoni land had not been taken away from city tycoon, Sudhir Ruparelia, the project might have taken off.
The Government, in 2006, granted Aya Group a 15-acre piece of land in Nakasero. The $100m 22-floor hotel is nearing completion. On the other hand, Kingdom Holdings, a company controlled by Saudi billionaire Al Waleed bin Talal, the original promoter of the project, claims the prince was affected by the global financial crisis. Has the financial crisis not affected the Aya Group?
This is a clear case of lack of goodwill on the part of an international investor.
Initially, most people thought the Kingdom Hotel project was more reliable than the Kampala Hilton one. But the Saudi investor has turned out to be a joke.
The Aya Group, according to investment officials, has set the record as the biggest individual to invest such an amount of money over the last 15 years. It is possible that if Aya did not have other business interests, they would have abandoned the project, just like the Saudi prince did.
When President Yoweri Museveni visited the Aya site in November last year, he said he had gone to give moral support to the investor. At the time, Aya Group was involved in a court battle with a city lawyer, Muzamiru Kibedi who was demanding $2.5m (about sh5b) in legal fees after helping the investors secure a loan.
The investor was also under pressure from the media to complete the project as he had promised. Museveni said the Government would discipline newspapers which undermine investors through negative reports and accused the media of pushing what he called ‘illiterate interests’.
But the media should be commended for putting pressure on the investors to deliver what they promised. It is likely that the Saudi prince pulled out because of the pressure from both the media and the public.
The chairman of Aya Group, Mohamed Hamid, has confessed that he has been under pressure from the media. Up to now, it is not yet clear whether the Shimoni project will ever take off.
The only visible investment on site is an idle tower crane.
Reports that real estate developers Kensington Group had taken charge of the $80m (sh170b) project to build a five-star hotel and office complex were rejected by former investment minister.
A proposed new investor, Azure Holdings, is awaiting a legal opinion from the Attorney General. Like Kiwanuka Semakula said, the Government should not repeat old mistakes. Once beaten, twice shy.
Steven Kasozi
Kampala
But the Government argued that the allocations were an effort to build hotels ahead of the Commonwealth Heads of Government Meeting (CHOGM) in November 2007. The hotels would also boost tourism and ultimately create employment, it was argued.
However, none of the hotels was ready by the time the CHOGM took place.
The Shimoni project has never taken off, but the Aya Group, in spite of many challenges, is finally delivering what is going to be Uganda’s biggest five- star hotel.
The land formerly occupied by Shimoni Primary School remains an eye sore and resurrects the question: What formula does the Government use when allocating land to investors?
Kingdom Holdings was supposed to build a five-star hotel and shopping mall as well as apartments.
There are many lessons to learn from the allocation of land to investors. Local investors who have been tested should be given priority. Probably if the Shimoni land had not been taken away from city tycoon, Sudhir Ruparelia, the project might have taken off.
The Government, in 2006, granted Aya Group a 15-acre piece of land in Nakasero. The $100m 22-floor hotel is nearing completion. On the other hand, Kingdom Holdings, a company controlled by Saudi billionaire Al Waleed bin Talal, the original promoter of the project, claims the prince was affected by the global financial crisis. Has the financial crisis not affected the Aya Group?
This is a clear case of lack of goodwill on the part of an international investor.
Initially, most people thought the Kingdom Hotel project was more reliable than the Kampala Hilton one. But the Saudi investor has turned out to be a joke.
The Aya Group, according to investment officials, has set the record as the biggest individual to invest such an amount of money over the last 15 years. It is possible that if Aya did not have other business interests, they would have abandoned the project, just like the Saudi prince did.
When President Yoweri Museveni visited the Aya site in November last year, he said he had gone to give moral support to the investor. At the time, Aya Group was involved in a court battle with a city lawyer, Muzamiru Kibedi who was demanding $2.5m (about sh5b) in legal fees after helping the investors secure a loan.
The investor was also under pressure from the media to complete the project as he had promised. Museveni said the Government would discipline newspapers which undermine investors through negative reports and accused the media of pushing what he called ‘illiterate interests’.
But the media should be commended for putting pressure on the investors to deliver what they promised. It is likely that the Saudi prince pulled out because of the pressure from both the media and the public.
The chairman of Aya Group, Mohamed Hamid, has confessed that he has been under pressure from the media. Up to now, it is not yet clear whether the Shimoni project will ever take off.
The only visible investment on site is an idle tower crane.
Reports that real estate developers Kensington Group had taken charge of the $80m (sh170b) project to build a five-star hotel and office complex were rejected by former investment minister.
A proposed new investor, Azure Holdings, is awaiting a legal opinion from the Attorney General. Like Kiwanuka Semakula said, the Government should not repeat old mistakes. Once beaten, twice shy.
Steven Kasozi
Kampala