Government has asked the Inspectorate of Government to probe allegations that certain individuals were involved in corrupt practices during the concession award of Kilembe Mines Limited to Tibet-Hima Auto Industries Limited.
Government entered into a Public Private Partnership/Concession with Tibet-Hima Auto Industries Limited to manage Kilembe Mines Limited on 6th September 2013. There were allegations in the media that individuals involved in the award process of the concession were involved in corruption.
“The Minister of Finance has requested the IGG to urgently investigate whether there were any corrupt actions attributable to any individual who participated in this concession before and after it was awarded to Tibet Hima Mining Co. Ltd, and to take appropriate action,” said Hon. Evelyn Anite, the Minister of State for Privatisation and Investment.
However, the Deputy Attorney General, Mwesigwa Rukutana, told Parliament that there was never an agreement between Government and Tibet-Hima, which failed to fulfill initial requirements in the contract.
“There was no agreement; it was wrong right from the start. The agreement never took off,” said Hon. Rukutana.
“Government should have exercised its right to treat the agreement as if it never existed. Government is in order to take over the assets of Kilembe Mines immediately,” he added.
Mining operations in Kilembe Mines ceased in 1982 as it was no longer economically viable due to a global financial crisis that led to a collapse in commodity prices.
Minister Anite said that when commodity prices began to recover and the prices of copper became attractive due to the industrial boom in China and India, government decided to redevelop the Mines through a private sector led participation.
Government opted for a Public Private Partnership/Concession out of three options that also included the sale of government shares in the company to a private investor; and a joint venture.
In the terms of the Agreement, Tibet-Hima was meant to pay an upfront signature fee of US$ 4 million; an annual concession fee of US$ 1 million on each anniversary of the concession agreement commencement; investment of US$ 175 million for phase of the project, focusing on commercialising the estimated 4.5 million tones of ore as well as the enhancement of the reserve potential in the area.
The Leader of the Opposition, Hon. Winfred Kiiza said that the Ministry of Finance relaxed and made errors while dealing with Tibet-Hima.
“Where are Ugandans benefiting from this agreement? The company is stripping the country’s assets, without paying any taxes to Uganda Revenue Authority,” said Kiiza.
“The Minister should immediately terminate the agreement and get another one. We have Ugandans that can manage the Mines. Tibet-Hima should leave immediately since we have no binding agreement with them,” she said.
The company was also required to rehabilitate Mobuku 1 Hydropower Station and expand its capacity from the current 5MW to 17.6MW for a self-reliant renewable energy scheme sufficient for the entire Kilembe Project.
The Rt. Hon. Deputy Speaker, Jacob Oulanyah, asked government to brief Parliament about actions taken about the deal and remedies taken about the losses incurred by government.