Catch-22 in government compensation

By Agather Atuhaire

Accused of cheating ordinary landowners, the government must find way to move on with projects

Compensating affected persons is a major component of any government project. Up to Shs30 billion is budgeted to be spent on about 400 Project Affected Persons (PAPs) when the second phase of the Kampala Northern Bypass Highway starts. This phase is expected to cost 60 million Euros (Approx. Shs260 billion).

During construction of the first phase of the 23Km Bypass, compensation of PAPs added Shs20 billion or 18% to the Shs110 billion spent.

In another case, the Uganda National Roads Authority (UNRA) budgeted Shs100 billion to compensate about 700 PAPs on the 51km Entebbe-Kampala Expressway.  Although construction is underway, UNRA has not compensated all PAPs and is embroiled in court disputes; including a Shs5 billion suit.

Pamela Ayebare, the Land Acquisition Officer at UNRA blames speculators. She says landowners who have not been compensated on the Entebbe-Expressway have pending dispute and the money cannot be released before the rightful owner of the land is established.

Konde Posiano of Busawula Bukwenda village is one of those that have not been paid. He says his land was valuated three years ago, in 2012, but he has never received a penny in compensation. Instead, his father was displaced before government compensated him.

But Konde is anxious about something even scarier to him. He says he feels the money he might get finally might not be enough to get him another place to settle his family as land prices have shot up in the surrounding areas. He wants the government to consider that when it finally pays him.

Mujungu Haruna Walugembe, another affected person from Nalumunye parish, has suffered what Konde fears. He says his house was valuated and he was compensated. However, he remains dissatisfied because UNRA delayed to compensate him and when it did, the cost of the house he was to buy had gone up by Shs10 million.

The same thing happened on the Northern Bypass, according to David Kibuuka, the LC1 Chairman of Butikirwa Zone Bukoto 2 Nakawa Division. He says people were paid more than two years after the valuation was carried out and at rates determined two years earlier.

Desperation in Hoima

Whatever the reason, failure or delay to pay compensation has exposed some people to near destitution.

When it pays, the government is accused of paying unfair and discriminatory rates. A study done by the Civic Response on Environment and Development (CRED) in the Albertine region put the rate of unfair compensation at 68% and failure to compensate at 48% or half of all cases.

In Buseruka, Hoima district, where government plans to construct a refinery, only 74% of the PAPs have been paid three years after their land was gazetted and valuated. Those that opted for physical resettlement have never been resettled. The Petroleum Exploration and Production Department of the ministry of Energy says construction of houses for these people will start soon as the land has already been acquired. But it might be too little too late for some PAPs who say they have been existing in destitution since 2012. Many say that they lost their sources of livelihood and their children no longer go to school because they expect to move any moment but never leave.

Another huge government project is the 600MW Karuma Hydropower Dam project in Kiryandongo District in northern Uganda. The US$1.7 billion  (Approx. Shs4.8 trillion) has a small compensation budget of Shs4.2 billion because it is located on 462 hectares only in a wildlife reserve, and expected to displace only 400 low income families.  But even this has run into problems as valuers and PAPs haggle over the price of mango trees and cassava stems.

As a result, although 15% of work on the dam has been completed some PAPs have never been compensated or resettled anywhere.

The Minister of State for Energy, Simon D’Ujanga, whose ministry is also involved in huge multi-billion infrastructure projects and has to deal with compensation issues, sounds frustrated because some of the cases have ended up in courts of law.

He says complaints over rates will never end.   “People want to fix their own rates and you surely cannot go paying any amount people demand for,” he told The Independent. Ayebare of UNRA agrees and blames the problems with rates on people who rush to buy land where government wants to undertake projects expecting to make lots of money from compensation.

“You find land rates exaggerated, “she says, “and no one has control over that.  We just have to be sober and trust that the Chief Government Valuer will be as fair as possible.”

The Permanent Secretary of the Ministry of Energy and Mineral Development, Kabagambe Kaliisa, says compensation disputes are impeding government projects greatly.

“We need dialogue on that to see how best we can move government programmes given the challenges of land acquisition and compensation,” he said during the Energy ministry’s Joint Sector Review meeting in December 2014. The call for reform has become a refrain from government officials.

Earlier in September President Yoweri Museveni had himself said changes needed to be made in the law.

The Daily Monitor newspaper quoted him: “The mistake has been to make the investors deal with the landowners, they should deal with the government; and then the government will deal with the landowners. You just tell those villagers to get out. You cannot stop the State from accessing its assets. We shall sort it out, we shall amend the Act. In fact, the Constitutional Court should say that Act is unconstitutional,” he added.

The President was at a Mineral Wealth Conference in Kampala on October 1, 2014. He said the Mining Act 2001 should be amended so that investors interested in mineral-rich land negotiate with the government which owns the minerals.

“The people who have to give you consent are the people who own the minerals, and that is the government. The other man (landowner) has no consent to give because the property is not his,” Museveni said.

The government officials back this position.

“There should be amendments to give government priority over land,”D’Ujanga told The Independent, “It is not possible for government to compensate people before work starts on the identified land.

“You can’t compensate people before you survey to know what land you need for the project and who will be affected.”

Fort Portal Municipality MP Alex Ruhunda has promised to introduce the amendments in parliament. According to him, the government undertakes these projects for the people and “so they should let it carry out its mandate and responsibilities without hindrance”.

Critics of the proposed amendments, including land advocates, say the law is not the problem. Officials of the Uganda Land Alliance (ULA), an organisation that campaigns for land rights, the problem is with the way government operates.

ULA  Executive Director Edmond Owor says the problem is the poor planning by the government and its lack of concern for the ordinary citizen. He says there would be fewer disputes if the government put aside enough resources for compensation before it starts on any project.

Government officials like D’Ujanga dispute the focus on lack of government resources only. He says there is simply no time.

“The process of identifying land, surveying it, counting their property and valuing it before going to the ministry of finance doesn’t take one day,” he says.

No money to pay

D’Ujanga admits that budget constraints have in some cases contributed to the delays saying that it is not easy to obtain all the money required at once.

Pamela Ayebare of UNRA also says that it is impossible to get money to compensate all the people affected by a particular project at ago.

She says the Ministry of Finance’s introduction of the system of Quarterly Releases worsened the bureaucracy involved in obtaining money. She adds that the new directive that all government money must pass through Bank of Uganda has worsened the bureaucracy.

“Money is released in batches and that causes delays,” Ayebare said.

Ayebare also added that the recently introduced Tax Identification Number (TIN) requirement for all the PAPs added another hurdle.  “It is challenging to get TIN for rural, illiterate people who are the most affected by these projects,” she said.

D’Ujanga says since work must go on even as the land wrangles rage, his ministry has been advised in the Karuma case to deposit the compensation money on an escrow account of the court.  Whoever deserves compensation will claim it after the cases are settled.

But this option might not be a solution, according to the Chief Valuer Gilbert Kermundu. When he spoke to journalists at the African Centre for Media Excellence (ACME), he said compensation rates are only valid for the year in which the valuation is done.

“If government cannot pay in one year,” Kermundu says, “people’s property should be re-valued to give them acceptable rates.”

D’Ujanga’s position also appears to flout the law.

Under current laws, although land in Uganda belongs to the people and not the government, there is a provision for compulsory acquisition when government needs land for public purposes.

However, although Article 26(2) (b) of the Constitution says the compulsory acquisition can only happen after prompt payment of fair and adequate compensation and prior to the taking of possession of the property, this section is more flouted than respected.

For ULA Executive Director Owor, the government needs to address the real issues around compensation; starting with the poor implementation of the existing law.