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AYOTA: NSSF has not purchased Nakigalala land yet, clarifies on Sh400b budget claims

Ayota briefing the committee. PHOTO PARLIAMENT UG

Kampala, Uganda | THE INDEPENDENT | The National Social Security Fund (NSSF) Ag. Managing Director Patrick Ayota has clarified that the purported purchase of Nakigalala land has not yet taken place, and UGX 400b was budgeted for 2 pieces of land – one at Nakigalala and another at Nakawa following a proposed partnership with Uganda Police.

Gender Minister Betty Amongi had alleged that the Fund budgeted to purchase land at Nakigalala at UGX 400 billion whereas she had obtained a valuation of UGX. 246 billion for the land.

But while appearing before the Parliament Committee investigating corporate governance failures at NSSF, the  Ag. Managing Director Ayota and his managment team, refuted the minister’s claims.

“The prospect of the acquisition of the Nakigalala land has been ongoing since 26th February 2019. The Fund’s Management evaluated the prospect, via the established processes and procedures, and initially deemed it attractive but was mindful of the risks and the need for thorough due diligence. A provision for UGX 250 billion, including VAT and other contingencies, was made initially in the 2019/2020 budget paper. The Fund considered the purchase subject to resolution of all the legal due diligence issues and compliance with the procurement regulations,” he said.

The probe committee is chaired by Mbarara City South MP Mwine Mpaka. Other members include Workers MP Charles Bakkabulindi Karim Masaba (Industrial Division, Mbale City), Michael Kakembo (Entebbe Municipality), Fortunate Nantongo (Kyotera District Woman), Laura Kanushu (Persons with Disabilities), and Amos Kankunda (Rwampara County).

“As part of the Fund’s efforts at sourcing for new land, on 9th August 2021, the Fund received a letter from the Inspector General of Police requesting a meeting to discuss a potential partnership with the Fund for the development of key infrastructure for a potential purchase of approximately 40 acres of police owned land in Naguru. A budget of UGX 150 billion including VAT and contingencies for the Naguru land (including existing developments) then informed a budget estimate of UGX 150 billion.

“The budget amount for both Nakigalala (UGX 250b) and land at Naguru (UGX 150b) informed the total amount of UGX 400 billion for “Strategic land Purchases” in the FY 2022-2023 budget paper that was submitted to the Minister of Gender for approval”, NSSF Chief Investments Officer, Gerald Kassato also told the committee.

Former Managing Director Richard Byarugaba also confirmed the same information while facing the committee and insisted that what was indicated in the budget was “purchases” for 2 pieces of land and not “purchase” for a single piece.

Ayota also told the Parliament Committee that it is important to note that the land has not yet been and will follow all due diligence if at all the Fund goes ahead to undertake the transaction.

“The Fund uses a zero-based budgeting methodology meaning that all spend in the year must be anticipated and budgeted for otherwise without which, no procurement can be undertaken. The budgets reflect an intention to deploy resources on strategic and operational activities, in practice, due to the lengthy due diligence and approval processes, it does not always happen. In the case of Nakigalala, the due diligence reports indicate numerous claims on the property and the transaction is on hold until further notice” Ayota said in his submission to the Parliamentary Committee.

In his written submission to the committee, Ayota affirmed that the Fund will have to go through the process of approvals before the final decision is made.

“The Board has not yet approved the procurement of the Nakigalala land pending the completion of the due diligence process per the Board’s earlier directive. The due diligence process has not yet been concluded mainly due to multiple claims on the land which have not yet been resolved by the potential vendor,” he said.

 

 

 

 

 

 

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