The Independent Uganda: You get the Truth we Pay the Price
Amuru, Uganda | THE INDEPENDENT | Horyal Investments Holding Co Ltd, the majority shareholder in the Atiak Sugar factory has criticized the Uganda Development Corporation (UDC) over its limited participation in the management of the joint venture.
In 2018, the government through UDC invested $5.5 million in exchange for a 10.1 percent stake in the Atiak Sugar factory which was established by Horyal Holding Investment Co Ltd.
Government stake has since grown to 49 percent with a direct and indirect investment of 553.7 billion shillings through UDC and National Agricultural Advisory Services (NAADS).
However, Mohamud Abdi Ahmed, the Director of Planning and Investment at Atiak Sugar Factory notes that amidst the challenges the investment is facing, its partner UDC hasn’t been actively participating in its management.
In 2022, Atiak Sugar Factory temporarily closed down its operation due to shortages of sugarcanes from both the plantations in Amuru and Lamwo districts coupled with repeated fire incidences.
Speaking during an oversight visit by the Leader of Opposition Joel Ssenyonyi and his shadow cabinet, Ahmed noted that most of the factory failures have been blamed on Horyal Investments Holding Company Ltd despite UDC being a shareholder.
Ahmed told the MPs who had queried about the management of the factory that when the government had just acquired shares in the venture, UDC had proposed to source for external managers which would limit their participation.
He requested the parliament to help in aligning the role of UDC so that it takes part in the day-to-day management processes of the factory arguing that the corporation can’t be an investor in the business but fails to regularly take part in its management.
According to Ahmed, since the factory closed production in March 2022, the factory has continued to produce electricity to run vital electrical units and use 200 litres of diesel fuel daily costing more than 800,000 shillings.
He also noted that with the installation of the irrigation system, the factory will require an additional 14 megawatts of electricity on top of the 6 megawatts it generates to run the whole facility efficiently.
Andrew Mugerwa, the Director of Investments at Uganda Development Corporation (UDC) acknowledges that while the corporation could have been absent in the past, it is currently actively engaged in the affairs of the investment.
Mugerwa noted that UDC is working hand in hand with Horyal Investments Holding Company Ltd management and other partners to ensure the factory gets back to commercialization from the current redevelopment stage.
He explained that UDC already has two members who have seats on the board of Atiak Sugar Factory who provide oversight to the company and regularly issue reports to the corporation.
Mugerwa however noted that whereas it had been known the investment is solely under UDC, the management approach involves key players consisting of the Ministries of Finance, Works, Water, and Agriculture.
Leader of Opposition in Parliament Joel Ssenyonyi during the oversight visit raised concerns to the investor on the persistent losses incurred in the investment and queried its viability since the taxpayer’s money has been sunk in it.
According to Ssenyonyi, his visit accompanied by the shadow cabinet was to understand the progress of the investment, and its challenges and find solutions that would see taxpayers get returns on the investment.
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The government since acquiring stakes in Atiak Sugar Factory has invested a total of 553.7 billion shillings. Out of the total investment, the government directly disbursed 483 billion shillings while indirectly, it injected 16 billion shillings in transport subsidy through UDC, and 54 billion shillings through NAADS sugarcane outgrowers.
In a bid to mitigate the labour shortages, and climate change and maximize production, Atiak Sugar factory through a 108 billion shillings supplementary budget commenced mechanization and installation of irrigation equipment.
The management of the factory has however requested additional funding from the government to connect the water pipeline from the river Nile to the plantation in a bid to restart full-scale operation. The project is projected to cost both the investor and government a total of 43 million US Dollars.
