The Observer | UNRA probe questions Shs 18bn compensation to Businessman Ntaganda
Uganda National Roads Authority (Unra) awarded businessman Ephraim Ntaganda Shs 18bn in compensation for his 2.5 acres located in Lubigi wetland.
The compensation, approved by the Ministry of Works and Transport includes; Shs 8.8bn for loss of business in three years even though no business was in place for the construction of Entebbe Express Highway. It also included Shs 4bn in disturbance costs, Shs 1bn in land-take arising from severance among others.
Unra Commission of Inquiry is questioning how the Shs 18bn figure was arrived at. Ntaganda told the commission that he purchased the said land in 2012 with a plan to start a soap factory, but his plan could not be achieved because of the construction of the Entebbe Express Highway. In 2013 gazetted all protected lands including forests and wetlands.
“I had this business plan in mind way before the proposed construction of the Highway and I had projected profits that would accrue from the business. That was the basis of the figures I asked for as compensation for loss of business,” Ntaganda said.
Evidence before the commission however shows that Ntaganda’s planned Excellent Assorted Manufacturers Ltd was never cleared by the National Environment Management Authority (NEMA).
NEMA Executive Director, Dr Tom Okurut says the application for a soap factory to be constructed on the said wetland was made but never ‘cleared’. Instead, NEMA certified Ntaganda to change his Hides and Skin warehouse near the Busega Wetland into the soap factory.
“Our certificate was clear, the factory was to be set up on dry land and not in the wetland and we instructed him to first construct a waste treatment plant,” Okurut said.
Richard Mungati, one of the probe commissioners says the financial audit of the Skin and Hide business should have been used as a formula for the amount to be paid in compensation for loss of business.
“I think this evaluation of yours, I think, you just have to accept that it is based on fake figures. The cash flows that you have used as a basis for your compensation are unrealistic and as such I think they’re kind of speculative.”
“Otherwise, you would have first of all referred to the real figures that have come from the audited financial statements where they have made profits. Because if they have made profits, they would kind of indicate the net cash flow flowing in into the business. And then you would have used that figure maybe projected for the next few years and then use that as a basis for the calculation of the business losses but you have not demonstrated this at all”, Mungati said.
The Chief Government Valuer, Moses Magala says he used the international standards and formula of calculation to come up with the business loss.