Who owns Shimoni land?

Sunday June 16 2019

Development. Kingdom Kampala Shopping Mall that

Development. Kingdom Kampala Shopping Mall that was opened last month. The land previously hosted both Shimoni Core Primary Teachers College and Shimoni Demonstration School. PHOTO by ALEX ESAGALA.  

By Isaac Mufumba

In a period of nine months, between September 2005 and May 2006, ownership of the 14.5 acre piece of land that was previously the home of both Shimoni Core Primary Teachers College and Shimoni Demonstration School, changed a record three times.
First was in March 2006 when it was transferred from the hands of the Uganda Land Commission (ULC) into the hands of Speke Hotels Limited, before it went to Saudi Prince Alwaleed bin Talal al Saud of Kingdom Investments.

The land was initially allocated to Speke Hotels following the launch in September 2005 of the Kampala redevelopment plan through which government was to redevelop prime land in the city by allocating it to investors.
Speke Hotels applied for the Shimoni land on October 13, 2005, and obtained a lease on March 24, 2006, upon the payment of ground rent of Shs158 million. The school was to be relocated at a cost of Shs4.5 billion.

Forced transfer
However, in the same month, President Museveni met Prince Alwaleed bin Talal al Saud and committed himself to allocating land in the city for the prince to construct a five-star hotel. During a subsequent meeting at State House, Mr Museveni directed ULC to revoke the allocation to Speke Hotels and instead offered the land to the prince’s kingdom Kampala.

Speke Hotels was on the orders of the President allocated the 15 acres of the Chieftaincy of Military Intelligence’s (CMI’s) land in May 2006.
The schools were moved and buildings demolished to pave way for the construction of a $65 million (about Shs240b) Inter-Continental Hotel Kampala and Convention Centre, which was also meant to house offices and a retail centre.

Government gave huge incentives, including a waiver of taxes on all construction materials and equipment; a 10 year tax holiday; incurring the costs of removing tenants and paying for a 99-year lease in order to allow for completion of work on the hotel, which they desperately wanted to see completed in time for the Commonwealth Heads of Government Meeting (Chogm) in Kampala in 2007.
There were concerns that Kingdom Investments was causing unnecessary excitement. And it was not the first time that the President had been excited by the entry of a “big investor”.

Razed. The land after the demolition of both

Razed. The land after the demolition of both Shimoni Core Primary Teachers College and Shimoni Demonstration School in Kampala.

In March 2005, Source of the Nile Resorts Limited, an arm of the Malaysian firm, Persepec Prime, met President Museveni seeking close to two square miles of land near the Source of the Nile in Jinja to develop a 100-room hotel, a shopping arcade, an 18-hole golf course, recreational facilities and a health centre. The firm claimed that it was willing to stake $80 million (about Shs298b) and produced a bank performance guarantee as proof of its commitment. As it turned out, they were speculators.

Luckily, the size of the land they were demanding, the huge costs of compensating land owners and squabbles in the local leadership impeded allocation of the land, which included Jinja Club, the Source of the Nile Agriculture and Trade Show grounds, Victoria Nile Primary School and several plots of land along the banks of the River Nile right from the Source of the Nile to Kiira Bridge in Jinja.

During the same period, it was announced that 230 acres of land on which Kirinya Prison had also been allocated to a Malaysian investor, LAVIT, to construct a call centre and computer assembling plant. The prison, which houses a main and women’s prisons, a remand facility and a primary school was meant to relocate within 12 months from December 2007. The land title is, however, in the hands of “the investors”.
It was against such a backdrop that there were fears that the Shimoni land would be lost to speculators or that Kingdom Investments would soon sell and transfer to another party and make a huge profit off the $2 million (about Shs7.4b) it had paid for it.

During an August 2006 interview with Daily Monitor’s Business Power Magazine, Ms Maggie Kigozi, the then executive director of Uganda Investment Authority (UIA), said UIA could cause cancellation of the lease if it felt that the project was either time-barred or not moving according to plan.
Subsection IV of the terms and conditions spelt out in the guidelines for allocation of investment land by UIA required an investor to have started developing the land “within 18 months from the date of allocation”, short of which lease automatically lapses and land reverts to UIA.

In this case, the 18 months period elapsed in November 2007. Even when Prince Alwaleed wrote to President Museveni late in 2008 to communicate his withdrawal from the project on account of “poor financial health”, the title was not cancelled. The then Minister of State for Investments, Prof Ssemakula Kiwanuka, said the land would be repossessed if the project had not taken off by the close of 2009, which also did not happen.

In a recent interface with the media, UIA’s director for Land Development Division, Mr Hamza Galiwango, indicated that 136 investors had between 2013 and 2017 lost the land they had been allocated in Kampala and Namanve Industrial Park for failure to develop the land.
“The withdrawn land is immediately reallocated to other prospective investors who are willing to develop it immediately,” Mr Galiwango added.

Why then is it that nothing was done to repossess the Shimoni land?
On Tuesday, the UIA spokesperson, Mr David Rupiny, said whereas UIA has over the years withdrawn a number of land offers that had been made to investors, the Shimoni land is outside its mandate.
“So that land does not fall under our mandate. We never allocated that land. It was the Uganda Land Commission. We only licensed the investor,” Mr Rupiny said.

The ULC acting secretary, Mr Robert Nyombi, said leases can only be cancelled if there are sufficient legal grounds to warrant such action, but hastened to add that each case is considered on its own merit. He, however, declined to be drawn to discuss matters around the Shimoni land.
Between April 2009 and December 2010, UIA and the minister for Investments were reading from very different scripts in as far as the ownership of the land and getting another investor for it were concerned.

Whereas Ms Kigozi was quoted in April 2009 as saying the Ministry of Finance had endorsed the Dubai-based Azure Holdings’ takeover of the land from Kingdom Investments, Prof Kiwanuka labelled Azure “incredible investors” and announced that the land had reverted to government.

Gone. Pupils move about in the compound of

Gone. Pupils move about in the compound of Shimoni Demonstration School before it was demolished in 2017. FILE PHOTO.


“Legally, the government has already taken back the Shimoni land. All the Asian speculators have purchased is a company in which the government has no interest. The government is not bound by any internal dealings between Azure and Kingdom Holdings,” he added.

Well, the January 2016 announcement that Kingdom Investments, the South African firm, Abland Africa and Crane Management Services (CMS) had entered a joint venture agreement to develop the land proved that the land had not reverted to government.
At this point, it is difficult to tell how many times the property has changed hands. During a May 2012 meeting between MPs and officials from the Ministry of Lands, Housing and Urban Development, Kira Municipality MP Ibrahim Ssemujju Nganda accused ULC of having secretly reallocated the land to businessman Sudhir Ruparelia, which the latter denied.
However, in a brief chat on Wednesday, Mr Ruparelia conceded that Kingdom Kampala, which was opened on May 19, is one of the Ruparelia family properties.

“The property is owned by Kingdom Kampala Limited and the shareholders are (the) Ruparelia family. This company is the owner of the building,” he said in a brief communication.
The CMS managing director, Mr Rajiv Ruparelia, declined to reveal when the property was acquired, from who and at what cost.
“We, Ruparelias never talk about money. What is important is that the property has been developed in line with the terms that government had spelt out when it was first leased out for investment,” Mr Rajiv said on Thursday.

What is, however, known is that Kingdom Holdings paid $2 million for the land, but sold it to Azure at slightly more than that in a deal that was endorsed by the Ministry of Finance. It is also certain that Sudhir Ruparelia got into the frame of things in January 2016 when it was first announced that his CMS had entered a joint venture with Kingdom Hotel and the South African firm, Abland Africa, to develop the land. Mr Ruparelia never denied the reports back then, but on Wednesday, he said the alleged joint venture had been “a rumour”.
Mr Nyombi declined to discuss issues surrounding the change of ownership, but was quick to say that no wrong had been done.
“Once (the land) is leased, it becomes property, which can be dealt in,” he said.

That suggests that for as long as one walks into town, convinces the powers that be to allocate him or her land, gets a lease for it, he or she can always keep it undeveloped for a couple of years like Kingdom Investments did and thereafter do with it whatever he or she pleases.

Background

Status of land. In 2014, Uganda Land Alliance, with funding from the World Bank, issued a report of the land governance assessment framework (LGAF), which was introduced to assess, among others, the status of land governance in the country. The report indicates that the biggest problem has been a failure by the custodians of the land to draw a line between public and government land.
“There is further a need to differentiate between government land and public land because the two serve different purposes. In Uganda, there is an assumption among policy makers that public land constitutes government land and, therefore, it can be made applicable to private use as government is a legal person that can do business,” reads the report, in part.

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