Ssenyonyi wants probe into Shs550b Atiak sugar deal
Ms Amina Hershi, the chief executive officer of Horyal Investment Ltd, displays some of the bags of sugar produced at Atyak Sugar Factory in Amuru District. PHOTO /FILE
What you need to know:
- The factory has not produced a drop of sugar since 2022 yet it reportedly continues to receive money from the government.
The Leader of Opposition in Parliament (LoP), Mr Joel Ssenyonyi, has tasked the government to conduct a comprehensive audit to establish how Shs553.71 billion that has been pumped into Atiak Sugar Factory was utilised, saying there is little to nothing on ground to show for the money.
For example, the factory has not produced a drop of sugar since 2022 yet it continues to receive money from the government.
In the oversight report tabled before Parliament yesterday, Mr Ssenyonyi wants the government to explain how the billions of taxpayers' money have been used, and how the facility benefits the country, especially communities close to the facility in Amuru District.
Mr Ssenyonyi and members of the Shadow cabinet visited Atiak Sugar Factory on October 7 in line with the core roles of the Parliament, to keep an eye on how the government uses public resources.
Atiak Sugar Factory, owned by Horyal Investments Holding Company Limited, was founded in 2013 and officially launched in 2020, but ran into financial challenges after failing to pay off its debts.
Its owners then sought a financial bailout from the government, and between 2017 and to date, with the open backing of President Museveni, has received more than half a trillion in taxpayers' money.
The proprietors of the company argued that the investment was strategic in promoting the welfare of citizens in the once war-ravaged northern Uganda, and particularly promoting women empowerment. In return, the government acquired preferential shares in the company.
The capacity of the plant in Phase One was targeted at 1,650 TCD (Tonnes of Cane crushed per Day), to be expandable to 3,500 TCD in Phase Two, and 5,000 TCD in Phase Three.
But according to his statement, what is on the ground in Amaru is not commensurate with the half a trillion so far invested, and is far from the pledged deliverables seven years later.
“Government should conduct a thorough audit of the company to establish whether it is a going concern. While the company is desirous to receive more money from the government, we think it is prudent for the already invested Shs553.71 billion to be accounted for first. There must be value for all this money before we think of investing more,” Mr Ssenyonyi said.
“The factory is currently non-operational, not producing any sugar, and this raises concerns given the government's intervention over the years. Management intimated that the reason for non-production is because sugarcane is not readily available. Despite the factory being non-operational for a couple of years, it spends 200 litres of diesel daily, running turbines, apparently to prevent the machines from rusting and malfunctioning. This regular expenditure is disturbing given that there is no production going on,” he added.
Mr Ssenyonyi also reported that the exact stake of government remains unclear, and tasked the Attorney General to furnish the House with an explanation.
Questions have persisted as to why the government with all the investment remains a minority shareholder at 40 percent while Atiak that has invested Shs120b owns 60 percent.
“Government through Uganda Development Corporation (UDC) needs to fast-track the conversion of its preferential shares into ordinary shares to increase its negotiating power, strong decision making and voting powers in the company,” Mr Ssenyonyi said.
He also demanded that the investigations zoom into how the government's investment arm, Uganda Development Authority (UDA), handles taxpayers’ money injected into entities such as the Atiak Sugar Factory.
“UDC should improve oversight and management of the factory’s operations through ensuring efficient management and transparency in the use of public funds, and put in place clear performance targets,” Mr Ssenyonyi said.
Mr Ssenyonyi also questioned why the company has abandoned the earlier model of planting 60,000 acres of sugar cane from Atiak across to Lamwo through farmer cooperatives, and instead resorted to planting 25,000 acres of sugarcane in Atiak, owned by the factory.
Earlier this year, President Museveni said he was pleased with the company, and sounded a warning to unnamed political leaders whom he accused of attacking the factory and trying to sabotage the investment.
In reply to Mr Ssenyonyi’s plea, Speaker Anita Among directed: “We will get a response from the Ministry of Finance and the Attorney General in terms of the conversion of the shares and accountability of the money that has been given.”
The State Minister for Finance in charge of General Duties, Mr Henry Musasizi, said: “We take note of the Leader of the Opposition's concerns and we undertake to respond in writing."
He added that it would be tabled "within two weeks."
