By Our Reporters.
China will not take Entebbe International airport over the dubious $200m Uganda government owes the Export and Import Merchant (EXIM) bank, officials said.
The Attorney General Mr Kiryowa Kiwanuka said government has already made plans on how the Chinese loan for expansion of Entebbe airport, would be repaid within the stipulated loan agreement period.
He said there has been a lot of speculations and fears especially on social media saying the Chinese are currently indirectly running the only international, airport in the country.
The government Legal Adviser also confirmed that officials from Uganda Civil Aviation Authority (UCCA) that manages the airport, have written to him over some unfair and outrageous clauses in the loan agreement.
But Mr Kiryowa Kiwanuka, defended terms of the $200m (Ushs711b) loan Uganda borrowed from China to expand and upgrade the tiny Entebbe International Airport.
He was appearing before the Committee on Commissions, Statutory Authority and State Enterprises (Cosase) this month following summons from members of parliament for him to respond to concerns from Finance Minister Hon. Matia Kasaija over the EXIM loan.
According to terms enshrined in the deal signed in March 2015, Uganda risks losing Entebbe airport if it defaulted on the loan repayment. Currently the Chinese must be informed or involved in operations of UCAA since they are now a key stakeholder.
But Mr Kiwanuka told Members of Parliament that all is well in the contract and there was no cause for alarm.
He said contracts are bad when one puts out obligations that are impossible for performance, adding that obligations in the Exim loan contract are all capable of performance.
The Exim bank and Uganda government agreement, among others, requires UCAA to put revenues earned from the facility in an escrow account from which the lenders can conveniently recover their money until the loan is fully paid off.
But the Attorney General In his response to concerns raised from MPs about the outrageous arrangement, Mr Kiwanuka said the account would promote transparency.
He said:” As far as government is concerned everything is set and the first installment of the loan is scheduled to be remitted on April 1 next year”.
Mr Kiryowa, who declined to discuss details of contentious clauses in the contract, said there is no need for Ugandans to worry since the contract is manageable and enforceable under the prevailing circumstances.
Legislators expressed concerns over the country’s rising debt burden and asked why the Attorney General’s office did not study the clauses in question contested by UCAA officials before the loan agreements were signed.
The Attorney General said his office cannot overturn decision made by Parliament to borrow, but hastened to add that loans are first approved by the House and it is not the Attorney General to tell Parliament that Uganda is exceeding her debt burden.
Finance Minister Hon. Matia Kasaija told Parliamentary committee members in October that some of the terms of the loan were bad and needed to be renegotiated. This generated more debate in the House as legislators demanded to know why Uganda government signed such a contract that more less mortgages Entebbe International airport ■
