NRM, Mike Mukula fail to pay Namboole stadium Shs 1.1bn

Football fans after a Uganda Cranes game at Namboole. FUFA owes the stadium millions

Football fans after a Uganda Cranes game at Namboole. FUFA owes the stadium millions

Mandela National Stadium commonly referred to as Namboole is in a financial crisis - with four of its tenants owing management at least Shs 1.18 billion.

The major debtors are Fortune Energy Limited owned by former MP Captain Mike Mukula to which Mandela Sports hotel was outsourced (Shs 735 million), the ruling National Resistance Movement (NRM) party (Shs 150.8 million), Federation of Uganda Football Associations (FUFA) -Shs 205 million and Pioneer Easy Bus Limited (Shs 91 million).

The debtors were listed in documents submitted to parliament’s Public Accounts Committee (PAC) by the stadium managing director Jamil Sewanyana. The documents were demanded by PAC chairperson Nathan Nandala for an inquiry to be carried out following a revelation in the June 2018 auditor general’s report that the stadium had accumulated domestic arrears of up to Shs 875.3 million. 

Following claims from different MPs about plans to privatize the stadium, Moses Mwase, the director privatization unit in the Finance ministry told PAC last month that the stadium had not declared dividends since it has capitalization issues and has not been making profits. 

He then said that consultations to bring a private developer on board have kicked off and that this would require funds to be availed by the government for the privatization unit to carry out an analysis. Mwase said that they are looking at partnering with the private sector and not necessarily privatization since there are no plans to sell the stadium.

According to Sewanyana’s documents before PAC, the stadium’s income for the period between 2017 to June 2018 was Shs 3.56 billion and out of this, Shs 3.01 billion was from internally generated revenue while Shs 166 million is a portion of government’s donation that was directly spent to pay for Uganda Revenue Authority (URA) taxes levied on Chinese donated sports equipment to the stadium. Shs 385 million was the value of the Chinese donated items.

In the submitted documents accessed by URN,  the stadium management says that they lack adequate financial resources to facilitate all its activities as well as fostering development and maximizing the use of the national stadium.

“This has arisen due to the outstanding old debts and a long history of creditors. The stadium infrastructure has aged and no major renovations have been made to the main stadium structure for the last 20 years. The company has repositioned itself. However, it needs recapitalization so that it can achieve total self-reliance,” reads part of the documents.

Sewanyana says that the company’s capacity to meet its long outstanding financial obligations has continued to be constrained because of uncollected money from the debtors including Fortune Energy Limited, NRM, FUFA and Pioneer Easy Bus Limited.

Fortune Energy Limited signed a contract for rent and management of Mandela Sports hotel and the hotel management were taken over in June 2016 and rental invoicing started with effect from January 2017 since the developer was given six months grace period for mobilization and set up.

But documents before PAC indicate that out of Shs 141.6 million for premium, only Shs 50 million was paid constraining the stadium in terms of cash flow as the staff who were laid off had to be paid immediately.

“While invoicing is being done and revenue recognized, Fortune Energy Limited has not paid any rent let alone non-payment of the balance for premium and utility bills. The company will now instruct legal redress for any breach of contract,” further reads the document.

According to the stadium, the hotel management debt as at June 2018, stood at Shs 735 million part of which Shs 91.6 million is a balance of premium, Shs 637.2 million for rent from January 2017 to June 2018 while the water and electricity bill stands at Shs 6.6 million.

The stadium also hosted the NRM delegates’ conference in September 2010 and Shs 123 million was not paid. However, in 2014 before the party’s delegates’ conference, Shs 60 million was paid and the balance of Shs 63 million is still outstanding. 

“NRM also booked the hotel for its youth elections and Shs 65 million was also not paid, NRM further hired a store to keep its electoral material in financial year 2016/2017 and Shs 22.8 million is still outstanding,” Sewanyana reports.

FUFA owes the stadium Shs 205 million arising from various matches and other events hosted at the stadium and according to the documents before PAC, the stadium board resolved that FUFA be sued and that the court case was resolved by the commercial division of the High court on June 12th 2017 by way of a consent judgment. FUFA has since paid the first and second installments with the stadium hoping the plan to be adhered to.

© 2016 Observer Media Ltd