Failure to develop allocated industrial park land remains one of UIA’s biggest challenges. PHOTO | FILE
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Industrial park land allocated to ‘unserious investors’ - report
What you need to know:
- A lot of industrial park land remains idle because it has been allocated to investors who have no capacity to develop it, according to the Auditor General.
Large parcels of industrial park land continues to lie idle and undeveloped because they have been “allocated to unserious investors”, according to the Auditor General.
In a report by Auditor General John Muwanga, it was noted that industrial parks continue to face a number of challenges, among which include failure to develop land allocated to “unserious investors”.
However, the report does not explain what it means by “unserious investors” and how the Auditor General reached that conclusion.
“The [industrial] parks have been characterised by … idle land allocated to ‘unserious investors’ and misunderstandings between investors and park management staff,” the report reads in part, noting that beyond this, parks have been encroached on, invaded by farmers and cattle grazing and degradation of nearby swamps, resulting from large parcels of land remaining unallocated.
However, Mr Morrison Rwakakamba, the Uganda Investment Authority (UIA) chairman, at the weekend told Daily Monitor that they have been reviewing idle land already allocated with the view of understanding what the investors were doing to develop it.
“Of course, there are some investors who were allocated land and haven’t managed to utilise it. But what we are doing is continuously reviewing those investors on a case-by-case basis to see where they are in terms of securing financing to develop it. Those that we see have flouted the terms of agreement, we are withdrawing the land and allocating it to investors that show greater promise,” he said, noting that UIA has also established police posts in industrial parks to solve the issue of security as well as investing in infrastructure in all industrial parks.
Failure to develop allocated land remains a big challenge for UIA whose only option is to withdraw undeveloped land.
About two weeks ago State Minister in charge of Privatisation and Investment Evelyn Anite, told journalists in Namanve, Mukono District that government had withdrawn at least 377 acres of land from investors in the Kampala Industrial Business Park over failure to develop it within the stipulated time frame.
The land had initially been allocated to different investors, some of whom had not shown intention of developing it for more than 20 years.
Government provides investors at least 18 months within which they must have put in place a structured plan to develop offered land.
“What we have unfortunately seen as we manage [industrial park] land is that there are a number of investors who [have not been] able to execute their projects and the land has been sitting idle for long periods of time. As a result, we have withdrawn it,” Ms Anite said, noting that investors such as Mariana Agencies, which had been allocated 76 acres to establish a soap and vegetable oil factory in 2014, Surgipham Uganda, (allocated three acres in 2007), Divine Oils (eight acres), Tirupati Developers Uganda (eight acres but only utilised two acres) and Zamburi Holdings (0.5 square miles) were some of the investors from whom land had been withdrawn.
Mr Muwanga also noted that during his inspections across the country, he had observed that industrial parks lack or had inadequate infrastructures such roads, solid waste and sewage management systems, power supply and street lighting, which have made such establishment unattractive to investors.
Most roads, he said, are impassable and with inadequate lighting thus exposing parks to thefts and insecurity.
Funding challenges
The Auditor General also noted that some factories in industrial parks had set up their own infrastructure, which, apart from being unsustainable and causing a miss match in standards, may negatively affect the usage and utilisation of industrial parks.
Industrial parks across the country have had challenges over the years, failing to achieve envisaged results within set timelines.
The challenges have mainly resulted from lack of funding and corruption leading to failure to develop key infrastructure among them, roads, power lines and sewage systems.
For instance, in 2011, the World Bank World Bank withdrew about Shs350b ($125m) from the Kampala Business and Industrial Park in Namanve, citing fraud and unnecessary delays in the project’s implementation.
