The unending tale of Kampala Industrial and Business Park
Posted Tuesday, January 19 2016 at 02:00
The development of Kampala Industrial and Business Park has been riddled with a number of challenges for over a decade. Ismail Musa Ladu spoke to various experts on where the problem is, seeking possible solutions as well.
The story of Kampala Industrial and Business Park (KIBP) is largely a depressing one despite recent encouraging developments there.
This is because, in the last 12 years since the idea of KIBP, located at Namanve, 11 Kilometres along Kampala-Jinja highway, was mooted, so little has been achieved.
In fact, there is a unanimous agreement across the board that by this time all should have been up and running.
Rationale for the park
Interviewed for this article, the executive director Private Sector Foundation Uganda (PSFU), Gideon Badagawa could not understand why such a project with a greatness to transform the fortunes of this economy, is still dragging a dozen years after its was proposed.
“As private sector, we encouraged the establishment of industrial and business park because we know it will ease the cost of doing business, considering that our costs compared to Kenya, Tanzania and even Rwanda, are the highest,” Badagawa said.
He continued: “Investors do not want to do business where the burden and cost of fixing social services are on their shoulders. So, we thought the industrial and business park where everything - power, water and railway lines, among other facilities, would be readily available. But this does not seem to be the case.”
The industrial and business park, according to Badagawa, enhances linkages and promotes integration across the value chain.
“Everything you need will be there because the idea is to have everything under one roof, thus increasing our competitiveness.”
KIBP sits on 2,213 acres of land. Currently, all the land has been allocated to a total of 340 investors. If they all inject a total investment of at least $3 billion (about Shs10.5 trillion) as anticipated by Uganda Investment Authority (UIA), then more than 1million jobs could be directly created for the next couple of years.
What is amiss?
In an interview with the state minister for Investment, Gabriel Ajedra, last week, it became evident that the problem, just like many other government retarded projects, is lack of funds.
According to Ajedra, after the World Bank pulled out of the KIBP project years ago, citing environmental reasons, government bureaucracies and inflated costs, the government, despite taking over the project, did not have sufficient funds to continue with the project.
He said: “The delay in completion of the KIBP is as a result of delay of funds. Right now, we are talking with the Indian government and they have promised us $150 million (about Shs522.7 billion) which will be channeled through the Export-Import Bank of India (Exim).
He continued: “By this time we could have gotten this money - $150m. The challenge is that such funds come with strings attached. As a condition, all consultancies for the project must be done by them - Indian firms. Yet this is something we had already done. But soon all will be well and we shall have the funds.”
In another interview last week with the regulators of the industrial and business parks, UIA, it emerged that KIBP will take its proper shape after five years from now.
Industry leaders grumbling
Uganda Manufacturers Association (UMA), just like the private sector apex body - PSFU, are upset by the slow development of the KIBP, saying it has been unnecessarily delayed.
Importantly perhaps, the manufacturers’ leadership claims that process of acquiring land at KIBP has not just been problematic but very unfair as well.
Speaking in an interview last week, UMA manager for policy and advocacy, Michael Lawrence Oketcho, said: “For us (manufacturers), land acquisition has not been clear. To acquire land there now, you have to go through a third party who is selling his/ her land.”
In response, Echatu dismissed the claim saying the procedure for leasing KIBP land has been clear and that such allegations are peddled because of lack of accurate information on how UIA does its business.
When the same question was put to Ajedra, he said there are two classifications of investors owning KIBP land. He said: “Investors who applied for land to invest in ICT, extractions (minerals), agro-processing and tourism and hospitality will qualify for free land. Those outside that bracket will pay $80,000 (about Shs278.8 million).”
That is how it has been, at least according to Ajedra whose docket directly oversees the affairs of UIA and industrial and business parks in the country.
Encouraging though, while touring the park last week, it was evident that what has been achieved in the last two or so years as exemplified by the full time operations of industries such as Roofings, Coca-Cola and most recently, Diamond Trust Bank (DTB), is heartening.
So far, 60 - 65 per cent of the 2,216 acres of land at KIBP is accessible. By mid-year (2016), according Echatu, the entire park, divided into three estates, would be easily reachable by all the 340 investors through murram roads.
There is a conspicuous notice by UIA saying the investment regulator no longer accepts applications for land in KIBP, in Namanve, because it is full. This, according to the private sector leadership, is a testimony of how much the private sector wants this project to work out.
Although it is happening at a snail’s pace, Echatu said, in addition to the four kilometres of tarmacked roads at the industrial park, another 1.5 Kilometres will be added this financial year.
This will be in addition to two more kilometres of tarmacked road for investors such as Vince coffee, Steel and Tube factory and Mariana, among others.
It further emerged that the one railway line currently being utilised by Roofings at the park, will be upgraded to the standard gauge in the near future.
However, plans to have another line serve Mukwano Industries and the aforementioned companies will also be drawn.
On the status of land and investments that are yet to take off, Echatu, said all is well as there are attempts by major investors to start work as soon as possible.
Should everything go according to plan, Echatu said in the next five years, KIPB will be booming with businesses.
Lack of facilities
Over a decade down the road, proper infrastructure such as power, water, railway lines, proper roads and waste disposable facilities are yet to be installed at KIBP.
According to UIA inspector of works, Paul Echatu, only about four per cent of KIBP accessible roads are tarmacked. There is only one railway line there. Power remains a challenge as its supply is not only irregular but also insufficient to the few businesses there. UIA data shows only 30 per cent have been connected, and done on case by case basis.
The same situation applies to water. Only 30 per cent is connected and as it is the case with electricity, and connectivity is done on case by case basis. Concerning waste disposal facilities, the situation is even worse, considering that the cost of investments needed to fix it is more than the UIA annual budget.
At the moment the 40 investors operating at KIBP are managing their own waste disposal, but in future, Echatu said National Water and Sewerage Corporation will take up the central management of the waste.