Eagle online has exclusively confirmed that government is he process of releasing part of Entebbe international airport to Chinese government over debt that Uganda acquired during previous years.
The takeover comes at a time when Uganda is rebooting its bid to revive the defunct airline with the first jets coming in at a cost of US $41.55 million this month.
Entebbe International Airport is under expansion process that started in May 2016. The US $200 million project is being undertaken by China Communications Construction Company (CCCC) and other subsidiary construction companies. The construction of the new cargo center and apron is currently at 95 per cent according to the Spokesperson of Civil Avian Authority Vianney Luggya.
By the end of 2018, Uganda’s public debt stock stood at $10.5 billion (Shs41 trillion). Out of this foreign debt was $7.2 billion (Shs26.5 trillion) 68.2 per cent of the total while domestic debt was $3.4 billion (Shs 12.4 trillion) or 31.5 per cent. By the end of this financial year, public debt is expected to increase to $11 billion.
According to highly placed sources Finance Minister, Matia Kasaijja who was also part of Uganda’s delegation to China, he is quoted to have said the Entebbe International Airport would be taken over for a period of 20 years at the cost of US $8 billion however, US $7 billion was already taken in form of loans in the last ten years.
The deal was signed by Kasaijja, his Foreign Affairs counterpart, Sam Kutesa and the Attorney General William Byaruhanga during China-Africa Cooperation summit in September 2018 that is aimed at discussing strategic partnership cooperation with China in areas of Trade, Infrastructure as well as Economic Development and Energy among others.
It can be remembered that Chinese Exim Bank took control over Kenneth Kaunda Airport, Zambia’s main broadcast cooperation and the ZESCO Power plant over US $9 billion debt, the is also a reported deal of same undertaking being mooted in Ghana.
President, Yoweri Museveni and Chinese president, Xi Jinping witnessed the signing ceremony in the country’s capital Beijing. Among other items lined up for china’s interest was to take control of Lake Victoria on the side of Uganda for 50 years to recover more US $9 billion of the loans that was acquired by this government.
Matia said, China proposed to manage the ground handling services until they recover their money however Uganda insisted and said they rather take the airport and collect money from the landing planes than taking the juicy part of the business.
“When we discussed this issue with cabinet ministers, we resolved that instead of taking over Lake Victoria, let’s give in part of the air part because we have a chance of building new airports in Kabaale, Gulu, Hoima, and Jinja,” he said in an exclusive interview with Eagle Online.
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Kasaija further said Uganda will be managing old airport that is currently occupied by UN air base as government lays strategy for the construction Jinja airport.
According Luggya, government has officially informed them (CAA) over the issue of part of the airport but couldn’t give specific dates when current arrangement will cease manning the airport.
The selling of the airport is likely to derail management Uganda national airline that is currently under revamp. Works Minister Monica Ntege Azuba presented the certificates of shareholding and incorporation indicating that government has less than one per cent of the shares in the company as unrevealed individuals own over 99 per cent of the shares.
Parliament last week approved Shs280 billion in supplementary budget for 2018/19 for operationalizing the aircraft. US $41.55 million is required for delivery of the first and the second aircrafts.
The Legislators however resolved that Uganda National Airlines Company Limited should be established through an Act of Parliament and recommended that the ground handling services at Entebbe International Airport should revert to Uganda National Airlines Company Limited.
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