President Yoweri Museveni is fighting tooth and nail to bail out the broke Swiss Roko construction firm. The President is justified in doing what he is doing. We are going to tell you why. The government has paid trillions worth of cash to Roko already, to work on a number of public projects. The projects are still work-in -progress.
One of such works is in regard to the extension of the Parliamentary Chambers. The other one is in respect of the gigantic court premises which Roko is currently erecting at the High Court premises in Kampala. For the record, the said works are, but just a few among the many public works which Roko is undertaking currently. Related to that, the regime has for many years now, been paying a fortune to Roko to carry out public works. That having been said and done, it will be a prudent move for the government to buy a stake in the now `bankrupt` Roko.
For one, if Roko goes into limbo, the taxpayer will end up losing trillions of funds paid already for works which are unfinished. Yet, if the government buys shares in Roko, the firm will hopefully regain a much better financial footing to complete the works previously paid for, but which are pending. Above all, after buying the shares, the government will henceforth gain a piece of Roko. And so, pay for any future works subject to the monetary worth of those shares.
But that is as far as the positive side of the coin can go. Let us now look at the negative side of the same. Due diligence is one of the cardinal rules when it comes to purchasing properties, shares, services as well as goods. The same is crucial since it helps the buyer to ensure value for money paid. If one wants to buy a plot of land, for instance, they will have to first carry out a search at land registry first.
That will be done to establish the genuineness of the ownership of the vendor plus the Title itself and also, to find out if the property is not subject to third parties’ claims and or encumbered. The prospective purchaser will also endeavor to establish the real cost of the land in order to avoid paying more and above the actual value. Now, we have been told that the government has never ever bothered to thoroughly carry out a due diligence in order to establish the financial status of Roko.
Supposing that is true, what yardstick did the government use then to determine the market value of the shares which it is committing the public to pay for? In absence of an audit report in respect of the present financial status of Roko itself, we might hit a dead end. In any case, is the government going to get a cool UGX200bn and pay it out anyhow without determining first, the true market value of the shares that it seeks to purchase for and on behalf of the public?
If so, who stands to gain from such a haphazard manner of doing business as this one that is being exhibited by the government in this transaction? Yes, Roko is broke, but so what! It has been broke for many years now. The firm owes money to quite many entities and people. Even so, those creditors have not asked the judges yet to wind up Roko or even sell off its properties. If they have, thank God, the execution hasn’t happened yet. Why the mad rush then?
Giving an opportunity to the Auditor General to determine the true market value of Roko and its shares, frankly speaking, isn’t certainly going stop the sun from moving from the East to the West as it always does. Crucially, no memorandum of understanding has been properly negotiated, entered or sealed, for that matter, between Roko and the government in respect of the transaction to which the public funds are being committed.
If at all one exists, neither has the government of Uganda cared to show such memorandum of understanding to the public, nor their representatives in Parliament. This is shocking given the fact that the government is supposedly doing all it’s doing on behalf of the public and for the public. Most crucially, the same government is at the end of the day, going to spend public funds to supposedly purchase those supposed shares from Roko.
Surely, if government isn’t hiding anything at all, it ought to be transparently carrying out everything in regard to these matters. Short of this, the government is going to end up being accused of foul play in regard to this transaction. But this is if, the government has not been accused so already, by some of the lawmakers and other politicians. The memorandum of understanding sets out what is due to who and in what quantities and for how much and for how long. Right?
Now, if the parties to the transaction, happen to lack such a vital piece of document, what then is going to govern their relationship and how? Yes, the president is doing a commendable thing by buying into Roko. The same is going to cut back on the costs of public works now that government is going to have a partner in construction. Yet, what is of great public concern right now is that the government is using a wrong procedure which is, in turn, going to surely achieve the unintended results.
By the way, why not pump what we are investing in Roko, into a public entity similar to the foreign Swiss company? After all, the entity is available. Uganda Housing and Construction Corporation (UHCC) is the name of the public entity.
UHCC is financially limping presently. It has been like that for many years now, owing largely to the government neglect. Yet given the kind of cash which the government is willing and ready to splash on Roko, UHCC will be able to do a good job as Roko which is being favored.
Let’s prove we are patriotic enough and that we support local content and BUBU by bailing out our local companies that are financially challenged. We left the Sembule Empire to its devices. It hence collapsed. Zzimwe construction curved in too, without the government doing anything to save it. Consequently, UHCC presents to us a huge challenge and opportunity to finally show that we really care.
But should we be constrained to bail out Roko, then the President should respectfully do the basics right in order for the good deal to fall in place. But we are, again informed that Deputy Speaker Thomas Tayebwa has since cleared the bail out to Roko. Butambala lawmaker, Muwanga Kivumbi alleges that Tayebwa told him that he cleared the bail-out because the President called him and directed him to. That Tayebwa waived all the known procedural norms of Parliament in order to do what the President directed him to do.
Tayebwa didn’t respond to what Muwanga alleges he told him. The Leader of Opposition (LOP) in Parliament, Mathias Nsamba Mpuuga vows to escalate the matters to the courts of law if the Speaker, Ann Annet Among doesn’t undo what her deputy did. All in all, it is never too late to correct a wrong if it’s indeed a wrong. Thank you and take good care of yourselves.
- Mr. Stephen Kasozi Muwambi is a seasoned crime investigative writer, majoring in judicial-based stories. His two decades’ experience as a senior investigative journalist has made him one of the best to reckon on in Uganda. He can also be reached via [email protected]
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