Mandela National stadium is on the verge of collapse and is in need of a government bailout, a report has noted.
The parliamentary report of the committee on Commissions, Statutory Authorities and State Enterprises (Cosase) shows that the stadium has suffered more than a decade of “mismanagement and wanton abuse.”
The only way to resuscitate it is by injecting in more money, the report advises. The report notes that over the years, the stadium has accumulated losses to the tune of Shs 3.6bn, of which Shs 375m was in one year – 2011/12.
“In these circumstances, the going concern of the company may be compromised. It also means the stadium may not continue to operate without capital restructuring,” the report says.
“Government should recapitalise Namboole, renovate it and set targets for new managers and board of directors.”
The report says some of the challenges at the stadium include frequent and unplanned change of leadership, various government departments’ refusal to pay for the use of the stadium; vandalising of assets and equipment, lack of government funding, and accumulated debt, among others.
According to the stadium’s management, the frequent change of the board and management had weakened the structures and systems, rendering the enterprise unable to do business smoothly.
Constructed in 1997, the stadium’s shares are owned equally by the ministry of Finance and ministry of Education. It finances its Shs 1.9bn annual budget by renting out the stadium, halls, and office space. It receives no allocation from the treasury. The management is only able to collect Shs 1bn annually, which means they have been operating under a deficit.
However, most of the people who rent its facilities never pay, and the stadium does not have the capacity to collect the debts. The government bodies that hold events there never pay because they take it as a government facility.
The NRM, for instance, held the delegates' conference at the stadium in 2010 and paid part of the money. Fufa is yet to clear Shs 170m, while Pioneer Easy Bus has also not cleared Shs 180m for both parking and office space.
Yet creditors demand huge amounts of money to the tune of Shs 2.3bn from the stadium. Some Shs 270m is due to URA and Shs 1.6bn to NSSF, with some of the debts stretching from as far as 2004.
One of the people who served on the management team for some years says the problem stretches back from the day the stadium was handed over to Uganda by the Chinese.
He told The Observer: “It was run as a project and entrusted to people who had been doing the construction. There was never formal recruitment of staff. They would just call people to come and work either because they have been seen around the stadium often or known by management.”
This, he noted, made the situation worse as no system was put to plan to manage the income.
He added that there was also never a distinction between Fufa, ministry of [Education] and sports and the stadium itself, which exacerbated the abuse with officials at the ministry and Fufa ordering for events to be held there without pay.
While the enterprise is struggling to survive, there is high-level misuse of funds and abuse, the report notes. It says, for instance, management paid Shs 114.2m in 2012 to various undisclosed individuals as commission for bringing business.
“There was no policy regarding payment of commission and no receipts were shown to acknowledge that the named people actually received the money,” the report says.
Also, Shs 60m was advanced to staff and it remains unaccounted for. The issue is being investigated by the IGG. Some Shs 63m worth of goods were purported to have been delivered for consumption at the stadium, but there was no documentation for that. Meanwhile, another Shs 173m moved from different bank accounts without documentation or authority. The IGG is investigating the case.
While all this was happening, the stadium did not have an internal audit system, with management saying they did not have the money to hire an auditor, as unscrupulous staff exploited the loophole to swindle money from the stadium.
The board, too, does not have an audit committee, the report says.
Ssewanyana, the managing director, told the committee that encroachers have continued to occupy and erect permanent structures on parts of the stadium’s 50-hectare land. In total, it is reported that 10 hectares are now under encroachment. The encroachers include self-styled veterans of Luweero bush war, Sports view hotel, a church and cultivators.
“But even in this sorry state, the stadium has experienced some of the worst mismanagement, which is an indictment to both ministry of finance and education, but in particular the minister responsible for sports,” the report concludes.
The stadium was built using a Chinese grant totalling about Shs 30bn. To run it, government incorporated the stadium as a limited liability company in 1999.