KAMPALA– The Parliament’s Public Accounts Committee (PAC) has called for the renegotiation of the controversial BIDCO palm oil growing contract with the Ministry of Finance, Planning and Economic Development after some MPs described it as a job executed by thugs.
The directive followed an observation raised in the 2017/2018 Auditor General report which highlighted that the agreement signed with BIDCO in April 2003, catered for a clause that would see taxes differed until government hands over the entire 26,500 hectares needed for palm growing.
However to date, Government has only provided 11,500 hectares and of these, 6,500 hectares are in Kalangala with 5,000 ha in Buvuma.
Connie Magomu Masaba, the Manager at Vegetable Oil Development Project (VODP) confessed before Parliament that government has failed to secure the required land and is in advanced talks with BIDCO to encourage smallholder farmers to join the project.
“We studied Bukakata further and the investors looked at the area, did their own tests and reported that land was too sandy for them to grow oil palms.” She explained.
According to Government, Ugandan taxpayers have incurred UGX 64Bn in Value Added Tax (VAT) since the inception of the project in 2003 and the payment is in fulfilment of article 5 (7) of the contract which stipulates that the government has to pay VAT on products envisaged under this project for eleven years commencing with that when the 26,500 hectares will be received.
The revelation angered MPs like Wilberforce Yaguma (Kashari North) who described the contract as a job executed by thugs, blaming officials who negotiated the contract for giving Ugandans a raw deal that will see Ugandans ripped off in taxes saying, “This was a plan of people to steal money until the world ends,” he exclaimed.
Nandala Mafabi, Chairperson PAC ordered Government to relieve Ugandans of this burden called BIDCO and have the agreement renegotiated within six months.
But Moses Kaggwa Director Economic Affairs, Ministry of Finance argued that the time frame given is very short, an objection that was rejected by Mafabi who asked the Ministry to avail terms of renegotiated contract within the six months.
Kagwa asked, “We cannot come here and confirm that within six months the agreement will be renegotiated because there are two parties. What if the other party says no?”