Taxpayers lose millions in row over Centenary Park ownership

The long-standing feud between Kampala Capital City Authority (KCCA) and city businesswoman Sarah Kizito over the lease to run Centenary Park is poised to cause taxpayers huge losses.

The sh717.5b Kampala Flyover Construction and Road Upgrading Project contract was signed on September 11, 2015.

But due to the unending fight for Centenary Parkland, the flyover project has delayed, yet the loan from the Japan International Co-operation Agency (JICA) has started accruing interest.

According to data on the JICA website, procurement of a contractor for the project was supposed to start in February 2016 and the flyover was scheduled to be completed by December last year.

The Uganda National Roads Authority (UNRA) media relations manager, Allan Kyobe Ssempebwa, acknowledged that the project has delayed, but he clarified that it is being implemented in two phases, each lasting three years.

He said the contractor for phase II of the project is expected to be got next year, implying that phase II will be completed in 2024.

The Government is to pay back the loan within a period of 40 years at an annual interest rate of 0.01%.

This means that annually, Uganda has to pay an interest of sh71.7m on the loan or sh5.9m per month.

The loan is likely to have started accruing interest since 2016, when Kizito obstructed the works, which means taxpayers will have to pay interest of sh287m for the four years when the works were not going on. Kizito, through her company, Nalongo Estates Limited, obstructed the works.

She is now seeking compensation for the buildings she put up at Centenary Park, even when construction of permanent structures was not permitted in her agreement with KCCA.

In September this year, the parliamentary committee on infrastructure resolved to meet the Solicitor General to resolve the matter after it emerged that the compensation dispute was holding the construction of the flyover project.

Although Kizito has been earning money from the park for the last 14 years, she is likely to walk away with billions in compensation.

Sources revealed that during an earlier meeting with the President, Kizito agreed to be compensated so that she leaves.

This was after she reportedly argued that she had made investments at the park over the years and that chasing her away with nothing would be unfair. "It was agreed that she should be paid after the Government valuer has calculated the value of the investments," the source revealed.

Traffic jam On October 22, KCCA executive director Dorothy Kisaka handed over the park to UNRA following directives from President Yoweri Museveni to commence construction of the flyover that will connect to the Kampala-Jinja Expressway. The flyover is aimed to reduce traffic jam in the city.

A 2017 World Bank study revealed that traffic jams cost Uganda over $800m (sh3 trillion) in lost Gross Domestic Product (GDP).

This is equivalent to the combined budgets for the ministries of health (sh1.2 trillion), agriculture (sh863b) and ICT (sh300b), plus a well-equipped secondary school from Senior One to Senior Six, complete with laboratories at sh600m and probably a primary school at sh400m.

Alternatively, one could construct 4,660 well-equipped secondary schools with the money lost in traffic jam. It is estimated that Uganda has about 560,000 vehicles today, a big number being commuter taxis.

The report noted that traffic congestions lead to prolonged travel times, high vehicle operation costs and environmental degradation.

They also result in high costs of doing business and are a disincentive to investors. The Kampala-Jinja Expressway, on the other hand, forms part of the northern trade corridor from Mombasa in Kenya, through Uganda to Kigali in Rwanda.

It is a strategic corridor since it serves as a trade link to the sea for the landlocked countries of Uganda, Rwanda and DR Congo.

Besides, the 95km road will also solve the chaotic jam between Nakawa and Mukono, which is compounded by trailers. The $800m (sh3 trillion) project, which will be built under a public-private partnership (PPP), is expected to start this financial year (2020/21).

What Kizito was earning from park At its peak, each of the entertainment places at Centenary Park was paying approximately sh4m per month and each of the over 10 tenants, who operated mainly restaurants and bars, plus a few shops for clothes and jewelry, had to pay six months upfront (sh24m).

This implies that Kizito has been earning not less than sh40m per month or more than sh480m per year since 2006.

This means that for the last 14 years, Kizito has earned over sh7b from the park, excluding the money she gets from her personal businesses there. Sources revealed that some tenants had renewed their tenancy with Kizito and had paid six months upfront.

With UNRA erecting mark stones at the park, Kizito now fears that tenants will ask for a refund.

IGG writes to Speaker Kadaga On June 14, 2017, the Inspector General of Government (IGG), then Justice Irene Mulyagonja, wrote to the Speaker of Parliament, Rebecca Kadaga, requesting her to intervene in the Centenary Park row.

Kadaga forwarded the matter to the parliamentary committee on state authorities and statutory enterprises (COSASE), but the issue failed to be resolved.

Besides the Kampala Flyover project, the fight for Centenary Park affected other projects, such as improvement of the existing sewerage infrastructure and relocation of the Uganda Electricity Distribution Company Limited power sub-station. Musisi opposes renewal of lease In July 2017, the then KCCA executive director Jennifer Musisi opposed a directive issued by the then Kampala minister, Beti Kamya, to renew leases.

Musisi, while appearing before COSASE, which was probing the controversial ownership of the park, said renewing the leases would result in loss of taxpayers' money by way of compensation.

In a letter dated June 22, 2017, Kamya said the decision to grant Nalongo Estate's request to renew the leases was reached after consultations with the President. Kamya noted that as a result of the impasse between the two parties, the country loses sh979m in contractor claims every month.

Kizito summoned In the same month of July 2017, Kizito found a hard time convincing COSASE over her continued stay at Centenary Park with an expired lease.

She appeared together with Nyakana and lawyer Anan Mutabazi. In her submission, Kizito told the committee that the KCCA council meeting that sat in Entebbe on May 18, 2017 resolved to renew the lease, as well as maintain the status quo at Centenary Park.

In response, Musisi told the committee that she was not aware of a council minute giving a directive on Centenary Park.

Left with no response to the factual issues raised, Kizito turned emotional and engaged the committee in issues regarding her investments that she risked losing if KCCA did not renew her lease.

The chairperson of the committee, Abdu Katuntu (Bugweri County), warned her not to politicise the issue. Sources said on sensing defeat, Kizito later sought an audience with the President so that she can be compensated.

Kizito confirmed that she met the President and that in a recent meeting with the President, attended by UNRA and KCCA officials, she was allowed to stay on the land for eight more months to recoup her money.

There was a heated exchange at Centenary Park after Kizito tried to block attempts by a team from UNRA from demarcating areas designated for the flyover. She said they had agreed that UNRA takes two acres, not 4.7 acres.

GENESIS OF CONTRACT

Registered in the name of KCCA, the 4.7-acre parkland is comprised of plots 96A-100A Kitante Road, plot 5 Park Link and plots 34E-38E Jinja Road.

In May 2006, city authorities and Nalongo Estates signed a 10-year management contract in which it was agreed that the latter would transform the property into a modern recreational park.

Kizito was to keep the park at all times free from obstruction, open for public use, and maintain it as a green space without any structures until the expiry of the contract in May 2016.

However, Nalongo Estates later erected permanent structures, restricted the park to public access, and failed to transform it into a modern recreational park.

As a result, KCCA terminated the agreement in 2011, accusing the company of failing to implement its terms.

When the company refused to hand over the vacant possession, KCCA attempted to physically repossess the land in 2012, but the exercise was stopped by trade minister Amelia Kyambadde.

Kizito and her husband, Godfrey Nyakana, formerly Kampala Central Division chairperson, have fought off KCCA law enforcement officers who have tried to repossess the park since 2012.

On the legal side, she dragged KCCA to the High Court, arguing that she had the right to be considered first if a new lease was to be awarded and she won the court case.