Govt will pay airport loan on time, AG tells lawmakers

The Attorney General, Mr Kiryowa Kiwanuka, has defended the terms of the $200 million (Shs711b) loan Uganda borrowed from China to upgrade and expand Entebbe International Airport.
Mr Kiwanuka was appearing before the Committee on Commissions, Statutory Authority and State Enterprises (Cosase) on Wednesday, a day after MPs summoned him to respond to concerns raised by Finance Minister Matia Kasaija about the loan.

Under the terms of the deal signed in March 2015, Uganda would lose its only international airport if it defaulted on the loan. But Mr Kiwanuka told MPs there was no cause for alarm.
“We don’t hold the view that it is a bad contract,” he said. “Contracts are bad when you put out obligations that are impossible for performance. The obligations in this contract, in our view, are all capable of performance and, therefore, we don’t see where the challenge to [Uganda] Civil Aviation Authority (UCAA) is.”

The AG, who is the government’s chief legal advisor, confirmed that officials from UCAA, which manages the airport, wrote to him expressing fears over some of the clauses in the loan agreement. 
The agreement, among others, requires UCAA to put revenues earned from the facility in an escrow account from which the lenders can recover their money until the loan is paid off. In response to concerns from MPs about this arrangement, Mr Kiwanuka argued the account would promote transparency.

Noting that the country was still enjoying the loan repayment grace period, he said: “Maybe we should thank God for this account. It is giving us transparency. Anyone who wants to fight this account is one who does not want transparency. “The first installment of the loan is to be remitted on April 1 next year and, therefore, there is no need for Ugandans to worry. In our view, the contract is manageable and enforceable under the circumstances,” he said.

Debt burden
MPs expressed concerns about the country’s rising debt burden and asked why the Attorney General’s office had not caught the clauses complained about by UCAA officials before the loan agreements were signed.
In response, Mr Kiwanuka threw the ball back into the precincts of Parliament, saying MPs had not raised any prior objections about the loan terms or the decision to borrow.

“The Attorney General’s chambers cannot overturn the decision to borrow made by Parliament,” he said. “When these loans are brought, they are first approved by Parliament. At that point, it is not the obligation of the Office of the Attorney General to tell Parliament that we are exceeding our debt burden.”
Committee chairperson Joel Ssenyonyi (Nakawa West) countered: “By the time Parliament approves a loan, there is a series of events. For instance, the Ministry of Finance comes to Parliament; it shows cause for the loan and, in so doing, we believe the Ministry of Finance has done its due diligence.”
In October, Finance Minister Kasaija told MPs on the committee that some of the terms of the loan were bad and needed to be renegotiated.

The matter returned to Parliament on Tuesday, the same day this newspaper revealed details of the agreement for the first time, when Kasilo County MP Elijah Okupa (FDC) raised the matter during plenary, demanding an explanation from the Executive.
The matter was, however, referred to the Ssenyonyi-led committee. Committee members say they will interview other officials connected to the matter before reporting back to the House as directed by Deputy Speaker Anita Among.