The Parliamentary Committee of Tourism, Trade and Industry directed the Uganda Development Corporation (UDC) not to extend a loan to the Kampala Serena Hotel.
The Committee led by the Chairperson, Hon Mwine Mpaka disputed the move by the Corporation to issue a shareholders’ loan on behalf of the government through the Nile Hotel International Limited (NHIL) terming it as erroneous.
NHIL is currently leased to the Kampala Serena Hotel, a private entity. NHIL is owned by the Government of Uganda under UDC, its investment arm.
The Committee on Thursday, 28 October 2021 met with officials from UDC led by the Minister of State for Industry, Hon David Bahati and UDC’s Director of Finance and Administration, Christine Zaake.
The Committee learnt that UDC elected to give Kampala Serena Hotel a Covid-19 relief loan of Ushs3 billion under the relief package disbursed by the government to UDC of Ushs100 billion.
Zaake told the committee that the loan was meant for NHIL which the government wholly owns making it eligible for the shareholders loan.
However, Mpaka asked why UDC would be giving NHIL a loan for property it leased out and ideally should be earning from.
“NHIL is essentially under the management of a private investor so how do we justify this as a shareholder loan; UDC has no shares in Kampala Serena Hotel,” he added.
Hon Pauline Kemirembe (NRM, Lyantonde District) said that UDC had no business extending the loan and asked that the move be terminated for lack of a justification.
Andrew Mugerwa, the Director for Investments at UDC conceded that the loan was in effect going to Kampala Serena Hotel to which the Committee said should not happen.