Namboole Stadium in crisis as NRM, Mukula fail to pay rent worth Shs1.1b

The Mandela National Stadium commonly referred to as Namboole Stadium is in a financial crisis after four of its tenants failed to pay rent worth Shs1.18 billion.

The major debtors are Fortune Energy Limited owned by Captain Mike Mukula to which Mandela Sports Hotel was outsourced at Shs735 million, the National Resistance  Movement (NRM) (Shs150.8 million), Federation of Uganda Football Associations (FUFA) (Shs205 million) and Pioneer Easy Bus Limited (Shs91 million).

The Stadium’s Managing Director Jamil Sewanyana listed the debtors in documents he submitted to Parliament’s Public Accounts Committee (PAC).

PAC Chairperson Nathan Nandala Mafabi had demanded for the documents, for an inquiry to be carried out following a revelation in the June 2018 Auditor General’s report that the Stadium had accumulated domestic arrears worth Shs875.3 million.

The directive followed allegations by some lawmakers that there were plans to privatize the Stadium, when Moses Mwase, the Director Privatization Unit in the Finance Ministry told the committee last month that the Stadium had not declared any dividends due to capitalization issues and had not been making profits.

Mwase told MPs that consultations to bring a private developer on board had kicked off and that this would require funds to be availed by government, for the Privatization Unit to carry out an analysis. He said that they were looking at partnering with the Private Sector, because there were no plans of selling it.

In the documents presented to the committee, the stadium management says that they lack adequate financial resources to facilitate all its activities as well as fostering development and maximizing the use of the National Stadium due to the outstanding old debts and a long history of creditors.

“The stadium infrastructure has aged and no major renovations have been made to the main stadium structure for the last 20 years. The company has repositioned itself. However, it needs recapitalization so that it can achieve total self-reliance,” the document reads in part.

Sewanyana says the company’s capacity to meet its long outstanding financial obligations has continued to be constrained because of uncollected money from the debtors including Fortune Energy Limited, NRM Party, FUFA and Pioneer Easy Bus Limited.

Fortune Energy Limited signed a contract for rent and management of Mandela Sports Hotel. The hotel management was taken over in June 2016 and rental invoicing started with effect from January 2017 since the developer was given six months grace period for mobilization and set up.

However, documents before PAC indicate that out of Shs141.6m for premium, only Shs50m was paid constraining the stadium in terms of cash flow as the staff who were laid off had to be paid immediately.

“While invoicing is being done and revenue recognized, Fortune Energy Limited has not paid any rent let alone non-payment of the balance for premium and utility bills. The Company will now instruct legal redress for any breach of contract,” reads the document.

According to the stadium management, the hotel debt as of June 2018 stood at Shs735 million part of which Shs91.6 million is balance of premium, Shs637.2 million for rent from January 2017 to June 2018 while the water and electricity bill stands at Shs6.6 million.

The stadium also hosted the NRM delegates’ conference in September 2010 and Shs123 million was not paid. However, in 2014 before the party’s delegates’ conference, Shs60 million was paid and a balance of Shs63 million is still outstanding.

“NRM also booked the hotel for its youth elections and Shs65 million was also not paid. NRM further hired a store to keep its electoral material in financial year 2016/2017 where Shs22.8 million is still outstanding,” Sewanyana said.

FUFA owes the stadium Shs205 million arising from various matches and other events hosted at the stadium.

According to the documents before PAC, the stadium board resolved that FUFA be sued and that the court case was resolved by the Commercial Division of the High Court on June 12th 2017 by way of consent judgment. FUFA has since paid the first and second instalments with the stadium hoping the plan is adhered to.