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19 November 2012

Sale of Uganda Railways assets in Kenya halted

The sale of Uganda Railways Corporation’s assets in Kenya has been halted, Mr David Ssebabi, the director of Privatisation Unit, has said. Without elaborating, Mr Ssebabi said the Divestiture and Reform Implementation Committee (DRIC) had done this for ‘strategic reasons’.

URC has three residential houses in Kenya including Nyali Palm Gardens, a plush address in Mombasa, Mugoya Estates –middleclass apartments in Nairobi, and in Kisumu, which given their location, if sold at the market prices, could still have fetched Uganda a good sum of money. Mr Ssebabi said: “DRIC has decided that we should strategically stay the sale of those properties (in Kenya).” While appearing before the Parliamentary Committee on Commission, Statutory Authorities and State Enterprises yesterday, Mr Ssebabi, however, added that the assets that are non-core could be available for sale “if the government so wishes”. The committee said there is an encumbrance on the property in Mombasa, which means ‘Uganda’s interests are under threat”.

Mr Krispus Ayena, the Oyam North MP (UPC), said: “The Privatisation Unit has an oversight function over URC. The encumbrance has been in effect for one year. How come up to now government cannot explain why this is so?” The government, however, appears to be in the dark as far as the encumbrance is concerned. Mr Aston Kajara, the State Minister for Privatisation, said: “We shall have to find out why there is an encumbrance on the property.” Mr Moses Mwase, the head of legal affairs at PU, said the buck stops with URC. “URC is involved in day-to-day management of its assets,” Mr Mwase said. Promised feedback Mr Kajara, however, promised to provide an explanation the next time the committee summons his team, this despite the encumbrance having been in effect for one year.

But Mr Michael Mawanda, the MP for Igara East (NRM), said since even after a year the ministry could not explain why there was an encumbrance, then it could even it longer to provide the details. Government had conceded the properties to Rift Valley Railways, the concessionaire of Uganda and Kenya’s railway passenger and freight services. In the last quarter of 2011, MPs instituted an audit of all URC properties