Uganda House mortgaged for Shs25b in planned renovation
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An artistic impression of Uganda House expected to be complete in 18 months in a collateral project. Courtesy Photo

By ISMAIL MUSA LADU & RICHARD WANAMBWA (email the author)

Posted Sunday, March 25 2012 at 09:44
IN SUMMARY

The Refurbishment plan

The existing development on Plot 10 consists of an office tower of 14 floors (17 levels from Nkrumah Road level), built over two level of basements and Ground Floor at Kampala Road Level.

The Nkrumah Road Level 1 (Lower basement) will have 1,050 square metres of additional retail space constructed in the open areas. The whole middle basement Level 2 remains parking but will have 1,050 square metres of additional parking lot and Kampala Road ground and first levels will have a total 3,900 square metres of shops and entertainment space constructed. Levels 5 and 6 formerly Residential Flats will be remodeled into offices. The tower will also be remodelled to have a spectacular ambience.

Uganda House, the home of Uganda Peoples Congress, has been mortgaged with a view to develop other properties managed by the Milton Obote Foundation (MOF).



Although business-wise this could be a prudent decision, some party members fear that the intended purpose of the mortgage may not be achieved, thereby exposing the four-decade old building into unnecessary ownership disputes.

Because of such fears, a former member of the MOF board, Mr Chirs Opoka, said he opposed the lifting of the caveat that gave the leeway to MOF directors to mortgage the UPC headquarters without full participation of party members.

“I opposed the lifting of the caveat because the terms were unfair,” he said. Mr Opoka, also a former UPC deputy secretary-general, said the lifting of the caveat means the properties under MOF—among them Uganda House, a building on 5th Street Industrial Area, a plot of land in Buziga (a Kampala suburb), Lugogo Ranch in Nakasongola, six plots of land in Kyambogo, a building in Mbale and a warehouse on 7th Street Industrial Area can be sold or mortgaged depending on the priority of the directors.

Mr Opoka said this would be contrary to the intention of the MOF founders. Speaking to Sunday Monitor, Mr Celestine Darasson Mindra, the MOF company secretary, which oversees Uganda House Investment Limited (UHIL), said MOF leadership in an annual general meeting resolved to develop Plot 8, Kampala Road, as well as redevelop Uganda House to utilise the unused space.

This, he said, was informed by the need to reap more money from the foundation properties than what it is currently bringing in. “It is true we have secured a loan from one of the banks and this loan amounts to $10 million (Shs25 billion) and the collateral security is the project and the land title,” said Mr Mindra,

Tenants asked to vacate
The MOF secretary said the foundation has already issued a notice to sitting tenants to vacate the building by April so that the redevelopment commences. He said they plan to remodel the building by constructing a modern mall and entertainment centre in the current podium and open space at Nkrumah and Kampala road levels for high-market-end customers and to maintain the premises as a business centre.

“The project is restricted to the said plots at Shs25 billion within 18 months but business in some areas will commence by 2013,” he said. Uganda House was constructed in early 1970s, while MOF was formed in 1964 by former President Apollo Milton Obote and 41 distinguished politicians, professionals and businessmen.

MOF was incorporated on May 8, 1964, as a company limited by guarantee without shares and it is owned by subscribed members, who join by invitation and pay membership fee.

Though, it is delinked from Uganda Peoples Congress (UPC), the party and MOF have a symbiotic relationship dating back to the days of its formation when most members of MOF were UPC members. This relationship explains why MOF update is the biggest funders of UPC.

Obote group plans to mortgage Uganda House
Publish Date: Mar 29, 2012
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MOF wants to renovate and complete its annex.
By Justus Akampa

Plans are in high gear to mortgage Uganda House to any competent bank to raise money required by the Milton Obote Foundation (MOF) to renovate and complete it.

Addressing the party's weekly press briefing at the party headquarters at Uganda House on Wednesday, party chairman Prof. Edward Kakonge said that MOF, the sole owner of the building has plans of renovating and completing its annex but are constrained by funding.

Kakonge, also a member of the MOF board of trustees, said they need about $US11million (about sh27.5b) to renovate the building and do other developments as per the organization's development structural plan.

"We have decided to mortgage the building because it is the only source we have to raise the funds we need to do renovations and rebuilding. If you have property that can work as collateral material why not mortgage it to have funds?" he asked.

Part of the money, he explained, would also be used to develop plot 8/10 along Kampala road, an annex to the main building to put up shops, a supermarket and a conference room.

Kakonge further disclosed that discussions about the plans are still ongoing, adding that the party would sell some other organization property to raise more money which they would top up on the mortgage money.

When contacted for comment, the party vice president Joseph Bbosa said; "He (Kakonge) is one of the governors. I think his position is legitimate because he is a member on the board of trustees who are the owners of the building.”

Bbosa said that MOF has all rights to mortgage it to whoever they presume right. For more than 3o years, he wondered, party leaders did not think of completing the structure, hence the need for the works.

"Remember that building's construction was interrupted by the coup on party founder Milton Obote's regime, hence some columns were not concluded," he added.

"How else can you get the money to renovate it? It is definitely through mortgage after ascertaining the building’s value basing on its cash flow," he said.

When contacted on phone, the former party chairman Edward Ruragaraga differed, arguing that MOF cannot mortgage Uganda House with a formal party consent.

"MOF was formed during the time when parties were not entities and not allowed to own properties. UPC decided to form MOF as arm of the Party to do business. If they say MOF can mortgage the building without the party's intervention. That implies that it can as well dispose of the building without our knowledge," he argued.