The Leader of the Opposition, Joel Ssenyonyi has tasked government to conduct a thorough audit of the operations of Atiak Sugar Factory in Amuru District, in which the Uganda Development Corporation (UDC) has invested over Shs553.71 billion, before more resources are allocated
According to the LoP, the factory is non-operational without any sugar production, despite government’s intervention between financial years 2017/2018 and 2022/2023, where government purchased and acquired equity shares from the factory.
“Despite the factory being non-operational for a couple of years, it spends 200 litres of diesel on a daily basis, running turbines to prevent machines from rusting and malfunctioning. This regular expenditure is disturbing given that there is no production going on,” said Ssenyonyi.
This was one of the concerns contained in a report on an oversight visit by opposition Members of Parliament to Atiak Sugar Factory, presented by the LoP during a plenary sitting held on Wednesday October 23, 2024.
Ssenyonyi further noted that there is limited or no presence of UDC in the operations of the factory, whereas it is meant to oversee the project on behalf of government.
According to the report, the factory management abandoned the agreed model of planting 60,000 acres of sugarcane through farmer cooperatives and resorted to planting 25,000 acres of sugarcane on land owned by the factory.
“Management told us that the factory’s sugarcane plantation totaling 7,900 acres had been burnt down in December 2020, which affected the operations. However, the cause of the fire was unclear,” Ssenyonyi said.
He urged government to fast-track the conversion of its preferential shares into ordinary shares so as to increase its negotiating and voting powers, as well as strong decision making in the company.
To ensure improved oversight and management of the factory’s operations, Ssenyonyi also urged UDC to ensure efficient management and transparency of the resources invested by government.
“We need government to update Parliament on its stake in this project, the plans to see that the Shs553.71 billion injected by the taxpayer does not go to waste and how Northern Uganda and Uganda at large can rip the promised benefits from this project,” he added.
Speaker Anita Among, gave the finance minister three weeks within which to present a statement on matters arising from the LoP’s report.
However, parliamentary documents show that between FY 2017/18 and FY 2019/20, the government, through the Uganda Development Corporation (UDC), acquired equity shares worth Shs81 billion in Horyal Investments Holding Company Ltd, the entity behind Atiak Sugar Factory.
In FY 2017/18, the UDC provided two shareholder loans totaling Shs20 billion. Additionally, in FY 2019/20, the government, through NAADS, released Shs54.68 billion to support sugarcane out growers in Amuru and Lamwo districts to sustain cane supply to the factory. The government also provided a transport subsidy of Shs16 billion to transport sugarcane from Busoga to Atiak.
Despite this investment, there are concerns over the government’s actual ownership percentage in the factory, as it has continued injecting funds into Horyal Investments. The factory was initially envisioned as a milestone in Northern Uganda’s economic recovery, promising jobs and women’s empowerment by supporting female sugarcane suppliers.
However, Horyal Investments reportedly took on expensive short-term loans to set up the factory and later sought government support to avoid financial collapse, arguing that the project was strategic for the region’s recovery.
