Sunday Pepper, a sister paper of The Red Pepper, broke the story a fortnight ago that Government had agreed to give Entebbe International Airport to a private investor.

The paper reported that officials from Dodsal Group, a United Arab Emirates (UAE) based consortium met with President Museveni over the matter. Museveni was understood to have given a nod to the sale with a view of improving the standards. The buyer is also expected to build a tax free shopping zone similar to what you have at Dubai airport. Because of the proposed tax free shopping complex, the new owner will acquire the huge swathe of land near the airport. Part of this land belongs to the Veterinary Institute and all the government land stretching to Kigungu Island. He will acquire the new and old terminals, all the buildings and storage facilities and parking thereon. But the deal has raised more questions than answers.

In the first instance, Dodsal registration is questionable as the company that responded to the investment proposal seems to be different from the one that signed the Memorandum of Understanding with the then minister of State for Finance, Planning and Economic Development (Investments) in Dubai. According to the documents we have obtained, the company that responded to the investment proposal is registered as Dodsal Engineering and Construction Pte Limited P.O BOX 8034, Dubai, United Arab Emirates, originating from India. However, its not clear why the government of Uganda entered into a memorandum of Understanding with a different company, Dodsal Infrastructure Developers Ltd, a company registered in the British Virgin Islands(B.V.I), having registration number NO.1469952, with its registered address at Trident Trust Company (B.V.I) Ltd, Trident Chambers, P.O BOX 146, Road Tortola, British Virgin Islands.

It has also emerged, the Solicitor General as the government legal advisor was not part of the Memorandum of Understanding as well as the line ministry; works, transport and communication till nine months into the deal. The MoU, which we have in our custody was signed by two officials from Dodsal Infrastructure Development Limited; Rajen A Kilachand (chairman and President Dodsal Group), Samir R Kilachand, Vice Chairman (Dodsal Group). Prof. Semakula Kiwanuka Ph.D, the then minister of State for finance, planning and Economic Development ( Investments) together with Moses Balyeku, whose role is not described on the MoU, signed on behalf of Uganda government. But Balyeku’s conflict of interest is unearthed in a strange twist of events when he later emerges in other correspondences between the two parties as the Dodsal Group Liaison officer in Uganda yet he signed as the Uganda government witness on the MoU. In a letter dated October 6, 2008 by the minister of Works, Transport and Communication, John Nasasira to Kiwanuka, Nasasira wondered why the solicitor general was not consulted before the deal was reached.

“I have read the documents you attached to your letter including the MoU that was signed on August 4th, 2008 in Dubai by Prof. Semakula Kiwanuka. I have talked to Semakula and advised him that in future he should send out copies of his communications for proper coordination of our sector activities. I talked to the solicitor general who was upcountry and he told me he has not given his opinion on the matter,” “I note that Ms Dodsal is registered in British Virgin Island and is referred to as a member of the DODSAL GROUP. I also not that Ms DODSAL is supposed to carry out feasibility study as a consortium with CHANGI Airport of Singapore, but CHANGI Airport is not a signatory to the MoU. You therefore need to establish the consortium is legally registered. You will need a formal contract agreement with the consortium that is in accordance with our procurement regulations. It is important to get the opinion of the MJ & CA/AG on the MoU before you sign any legal agreement of this project,” Nasasira said in the letter. Our sources indicate that Dodsal doesn’t intend to encourage the development of upcountry aerodromes which is contrary to the government policy on aviation.
Sources say the original proposal was to develop a cargo centre/export processing zone and not improve the airport operations as per all communications. “The rationale was to stimulate air transport traffic, passengers, cargo and aircraft movement which may not be achieved by simply improving the airport operations,” a source noted. The report also spells out clearly that the majority of Civil Aviation Authority workers will lose their jobs but Dodsal does not show how the retrenchment exercise will be handled. Infact, all CAA staff except those in the Airworthiness department have been told to pack their bags and leave at the close of the year. The Dodsal/Changi Airport proposal, according to company acquisition expert doesn’t give financial analysis as well as financial guarantee for the project-a situation that may see the airport rundown and the investors walking away scot free. Experience shows that airports which have been given out by governments to be run on concession have not succeeded, for example Kilimanjaro International Airport in Tanzania.Kilimanjaro was in 2007 leased to a British company, Omniport, which also owns Norwich Airport in the United Kingdom and Maastricht Airport in the Netherlands but nothing has changed. Observers are predicting a grim future as a result of the take over.

They say CAA operations are likely to crumble as the airport revenue has been subsidizing its activities, on top of financing state security as well as meteorology department at the airport. We have confirmed that the CAA is currently serving a Shs72bn CHOGM loan and it has been paying off Shs2bn per month since October 2008. However, the new investor’s proposal doesn’t say anything on the debt. It has also been noted that Civil Aviation Authority will not access the detailed project till after seven years of the expiration of the Memorandum of Understanding. Analysts say while it’s a good gesture by Dodsal to Uganda government to carry out the feasibility study at its cost, it was wrong for the Uganda government to sign a MoU that the report should not be released to third parties until after seven years of MoU expiration. They argue that the detailed report should be a property of CAA and used for its development projects.
Below, in a brief to Nasasira, the Civil Aviation Authority boss, Ambrose Akandonda reveals blow by blow the events that led Dodsal Group/Changi Consortium to Entebbe Airport.

Hon. John M. Nasasira Minister,
Ministry of Works and Transport
PO Box 7174
KAMPALA

Dear Sir,

November 4, 2008
FEASIBILITY STUDY MISSION OF ENTEBBE INTERNATIONAL AIRPORT
BY DODSAL GROUP AND CHANGI AIRPORT CONSORTIUM

This is in reference to your letter of 14 Oct. 2008 ref: MIN/PERS/26 which I received today 28 Oct. 2008 on the above mentioned subject. I did receive my copy of the letter dated 6 Oct. 2008 ref: MS/ INV/ 10/08 addressed to you by Hon. Prof. Semakula Kiwanuka, Minister of state for Finance, Planning and Economic Development (Investments) in connection with the subject above.As clearly captured in your letter, the Hon. Minister of state for Investments’ letter contained a number of accusations/ allegations including the accusation that CAA Management is incompetent and should be fired. We found this accusation unfair and without foundation. We are at a loss as to why such negative evaluation should be against CAA Management when simply wanted to comply with institutional procedures.Our understanding is that vetting of External Investors is the responsibility of another of agency, Uganda Investment Authority.As requested/ I am detailing here below a chronological brief on our interaction with M/s DODSAL Group since they were introduced to us by the Hon. Minister state (Investments), Ministry of Finance, Planning and Economic Development, Prof. Semakula Kiwanuka Ph.D.

The mission of the team, we were informed, was to explore and hold discussions on potential re-development of Entebbe International Airport. We were informed that another team from the same company was meeting officials in the Ministry of Energy to explore avenues of investing in the Oil Industry and Energy..The team which was accompanied by an official by the names MOSES BALYEKU met me in my office and informed me that they had been advised by the Minister of State (Investments) to meet with CAA officials to explore opportunities for investing at Entebbe International Airport and more specifically in an Airport Export Processing Zone. They further briefed me about the activities of DODSAL worldwide. I requested for a brief on the company and they promised to send one.
1.2 On 27 Dec. 2007, a brief on DODSAL was received vide their letter dated 22 Dec. 2007. On 28 March 2008, 1 wrote to DODSAL stating virtually what I had informed the team that visited on 17 Dec. 2007 and advised them that they could make a presentation to CAA on Tuesday 22 April 2008 at 3.00 p.m. at CAA Head Office, Entebbe. This letter was prompted by an enquiry from Mr Moses Balyeku who wanted to know when we could receive the team for their presentation.Although the CAA Management had scheduled a meeting with the team as planned on 22 April 2008, the DODSAL team did not turn up. Instead I was informed by Mr Moses Balyeku that the Chairman- and President of DODSAL Mr R A KILACHAND would on 22 April 2008 be on his way to Dar-es-Salaam? via Uganda and that the Chairman and his team would like to meet and brief me on DODSAL’S investment proposal for Entebbe. The group stayed at the Speke Resort Munyonyo.
Since they arrived after offices had closed, I agreed to meet them at Munyonyo in the evening. We met at about 8.00 p.m. Mr R Kilachand was accompanied by Mr Hasu Masrani, a former Ugandan Asian now residing in Dubai. Mr Moses Balyeku was also with them:

The group restated DODSAL’S plans to invest not only at Entebbe Airport but also in the Energy sector and that the Minister of State (investments), Ministry of’ Finance, Planning and Economic Development had given them a go ahead to proceed with their plans. They further advised that the technical team could not make it for a presentation as planned because of a busy schedule. They promised that I would soon get a communication from them when the team would arrive.I informed the Chairman that CAA was in need of investment at Entebbe International Airport but that there were procurement processes which need to be complied with.On 24 April 2008 Mr R K Kilachand and 5 officials arrived again at Entebbe International Airport on a private jet GIV. They were met by Dr W R Makuza (DMD) and other CAA Management Team officials. Also to meet them was Mr Moses Balyeku, Mr Amit Uplenchwar of DODSAL and some officials from the Ministry of Energy and other state agencies.
The CAA team was informed that the Group was in Uganda at the invitation of the Government and should be accorded every assistance needed.The meeting with the Deputy Managing Director/ Management Team and the DODSAL officials took place at Entebbe International Airport They expressed the wish to be shown around Entebbe International Airport facilities especially the land designated for the development of an Airport Export Processing Zone (EPZ), the former Ministry of Agriculture, Animal Industry and Fisheries (MAAIF). The team was conducted around as requested. After the tour the DODSAL Chairman, Mr Kilachand indicated that the land available appeared small considering the plans they had for Entebbe.He also indicated that he planned to establish a technical College in Entebbe that would train Ugandans to supply labour to the oil rich Gulf States. The group departed that evening.On the 14th May 2008, I received a letter from DODSAL dated 7* May 2008 appreciating my having met the Chairman of the company on 22nd April 2008 and informing us that the team from DODSAL would be in Uganda on 19th and 20th May 2008 for further discussions. Management was alerted about the expected group and arrangements were made to meet them. I confirmed the proposed mission date vide my letter of 14 May 2008.

The DODSAL team arrived as scheduled and met the CAA Management team led by the Deputy Managing Director on 19th and 20th May 2008. Together with the DODSAL team, there were two officials from CHANGI Airport International i.e Mr Ng Tim Peng, Regional Vice President (India) Changi Airport International Pte. Ltd. and Mr Mathew Tan, Vice President, Changi Airport in charge of Commercialization and Desmond Khoo, Senior Manager, Changi Airport, Singapore. At the meeting the group reiterated their objective of making Entebbe International Airport an Integrated Commercial Hub in the region because of its strategic location.
They requested for some basic information on Entebbe International Airport and the Aviation Industry in Uganda as a whole. The Marketing and Commercial Department was tasked to avail the required information.
Before the team departed on 20th May 2008, they advised that they would be briefing the Chairman of DODSAL on their findings and a decision would be made whether or not a Feasibility Study would be required to determine the way forward. CAA would be advised by DODSAL accordingly. The group departed on 20 May 2008. The CAA Board was briefed on the matter. No communication was received from DODSAL thereafter. However/ on 20 August 2008, I received a letter dated 11 Aug. 2008 ref: MS/INV/08/08 from the Minister of State (Investment), Ministry of Finance, Planning and Economic Development restating his support for DODSAL’s investment plans for Uganda and appreciating our support for the DODSAL team which visited the airport in May 2008.He also forwarded to me a copy of a Memorandum of Understanding (MOU) which he had signed with DODSAL on 4th Aug. 2008 for Entebbe International Airport Feasibility Study to be carried out in conjunction with Changi International Airport.

In the Minister’s letter, we were also advised that “DODSAL Group will make available to us a schedule of the Feasibility Study. We did not get the said schedule as promised.Attached to the Minister’s letter and MOU was also a copy of a letter dated 11 Aug. 2008, ref: MS/INV/08/08 from Prof, Semakula Kiwanuka Ph.D to the Minister of Justice and Constitutional Affairs/Attorney General asking for the clearance of the MOU.Earlier, on 25 July 2008, I had been given copies of a letter dated 1st July 2008, ref: EDP.81/348/01 addressed to you by the Minister of Finance, Planning & Economic Development, Dr E Suruma in connection with another Investor, M/s SHEIKH AHMED DAREWEESH of Abu Dhabi, UAE who also wished to invest at Entebbe International Airport, among other plans.To the Minister’s letter was attached another letter dated 16 June 2006 from Prof. Semakula Kiwanuka addressed to the same Mr Ahmed Dareweesh Dagher Al Murar and his plans to invest in the Aviation Industry in Uganda.
You recall Hon. Minister that after receiving these correspondences on the two potential investors (DODSAL and Sheikh Ahmed Daeweesh) I got in touch with you and consulted you on how these two groups should be handled. It was agreed that we would discuss the matter further at a convenient time later.On 19th Sept 2008, I traveled to Boston USA to attend The Airports Council International World Conference. I returned on 1st Oct. 2008. On 29 Sept 2008, the Deputy Managing Director, Dr W R Makuza received an e-mail from Moses Balyeku informing him that the DODSAL/CHANGI Group team to conduct the Feasibility Study would be arriving on 5th Oct. 2008. On 2nd Oct. 2008 the Deputy Managing Director sent out an Internal Memo circular to the CAA Senior Management team informing them of the expected arrival of the team and the programme of activities for the period the team was to be at the Airport. On 3rd Oct. 2008, Prof. Semakula Kiwanuka Ph.D wrote to Dr Makuza confirming that indeed the DODSAL Group and CHANGI Airport Team of 30 people were arriving for a Feasibility Study for a period of 2 - 3 weeks. A list of the delegation was also submitted. It is worth noting here, that the Deputy Managing Director was not at this time aware of the MOU signed with DODSAL Group and CHANGI because the copy which had been sent by Prof. Semakula Kiwanuka Ph.D was still on my desk. I was yet to brief him about it.

The DODSAL Group and CHANGI Airport team arrived on Sunday 5th Oct. 2008 and were received by Mr Moses Balyeku at the Airport. On Monday 6th Oct. 2008, the Deputy Managing Director informed me of the presence of the DODSAL Group and CHANGI Airport team and their mission to undertake a Feasibility Study for Entebbe International Airport. I enquired whether the line Ministry (Ministry of Works and Transport) had been advised about the mission since normally when an exercise of this nature is to be undertaken by CAA we inform the Parent Ministry for co-ordination purposes. I was informed that the contact with the Ministry had not been done.I advised that for better co-ordination, the team should hold on commencing the study for a day until consultations with the Ministry had been done. I contacted you on phone on the matter and you requested for a brief which I sent on the sane day, 6th Oct. 2008Prof. Semakula Kiwanuka was informed about the need for consultations with the parent ministry before the team’s commence their work, since CAA had not been given enough time to carry out such consultation before, the arrival of the team.Apparently Prof. Semakula Kiwanuka was not happy with this position. He advised that he was to talk to you about the matter so that the team does not loose time.
In the meantime, the team was given an opportunity to tour the Airport facilities and look at the nature of operations taking place at the airport.On 7th Oct. 2008 evening, I was called by State House Protocol office that I should attend a meeting at State House the following day, 8th Oct. 2008. The meeting, as I was informed was for Prof. Semakula Kiwanuka to introduce to H.E. the President the DODSAL Group and CHANGI Airport team and brief The President about their investment plans for Uganda and Entebbe International Airport in particular.I contacted you on phone about the matter and you directed that 1 should attend the meeting as invited. The meeting at State House was to start at 5.00 p.m. in the evening of the 8th Oct. 2008. On 8th Oct. 2008, before I left for State House, I received your letter of the same day in which you made a number of observations on the DODSAL Team Mission and guided on the way forward. Hon. Simon Ejua, Minister of State (T), Ministry of Works and Transport represented the Ministry/ accompanied by Mr Sanya at the meeting.Before the meeting, I briefed Hon. S Ejua on the issues at stake •which he appreciated. We also held an informal meeting with Prof. Semakula Kiwanuka before the meeting with H. E The President.

Hon. Ejua pointed out to his colleague that among other things:
The Minister of State for Investment needs to involve the Parent Ministry whenever there is an investment proposal involving a Parastatal under the Ministry of Works and Transport He made it clear that no one was against investments but that there was need to follow correct procedures.The status of the MOU was not clear since the Attorney General had not vet responded to the request for clearance letter by the Minister of State (Investments). There was need to establish a formal contract/MOU between CAA and the DODSAL GROUP/CHANGI consortium.A copy of the joint venture Agreement between DODSAL and CHANGI Issues of Procurement of DODSAL/ CHANGI Consortium need to be resolved.

Prof. Semakula Kiwanuka generally agreed with these observations. The meeting at State House started at about 8.00 p.m. It was chaired by H.E. The President. Also present from the Government side was Hon. Ruhindi, Minister of Justice and Constitutional Affairs. Prof. Kiwanuka Kiwanuka introduced the DODSAL/CHANGI consortium and briefed the President on their intended mission.
The leader of the DODSAL Group presented a brief to the President which included among others:
i) Need to establish an Export Processing Zone at Entebbe International Airport
ii) Need to create Entebbe International Airport as a regional Cargo Hub
in) Need to acquire more land to support Entebbe International Airport expansion plans.
iv) DODSAL’S plan to spend US$1,000,000 on the Feasibility Study free of charge

In response, H.E. The President thanked the DODSAL Group for showing interest to invest in Uganda and their offer to spend USS1,000,000 on the Feasibility Study free of charge. He also interested the group to consider investing in Agro based industries since Uganda was rich in Agricultural products such as Coffee, Tea, Flowers, Fish, Livestock and Fruits. He however guided that:-

i) DODSAL/CHANGI Group should enter into an MOU with CAA to spell out the Terms of Reference and deliverables.
ii) The Group proceeds and completes the Feasibility Study and avail their Report when the work is completed.
The meeting ended just after 9.00 p.m. and thereafter the Group was served dinner before departure. The team departed for Dubai on 16 Oct. 2008. They promised send-to us the draft report of the study for our review before compiling a Final Report. The CAA Board was briefed on the Team’s visit and the meeting in State House on 10 Oct. 2008.In concluding this brief, right from the on set when the DODSAL Group was introduced to us, I made it clear to them that while CAA was out to receive investment proposals from potential investors, whether recommended or direct, it was paramount that the process has to comply with institutional and national procedures/and or regulations. We did not enter into any agreement, verbal or written, with the DODSAL Group as such and agreement would need the involvement of other Government Agencies such as the Solicitor General and PPDA.We do not therefore know how DODSAL Group/CHANGI Airports got the impression that they could carry out such a study and later on invest at Entebbe International Airport without going through the established procedures.

It would be beneficial if guidelines were developed and agreed as to how the office of the Minister of State (Investments), Ministry of Finance, Planning and Economic Development interfaces with other Public Enterprises, such as CAA, which fall under a different sector Ministries when investments are being promoted in various economic sectors.

Yours Sincerely,
Ambrose K Akandonda MANAGING DIRECTOR
c.c. Hon. Minster of State for Works and Transport (T)
c.c. Hon. Minister of State for Works and Transport (W)
c.c. Permanent Secretary, Ministry of Works and Transport
c.c. Chairman, Board of Director, CAA
c.c. Deputy Managing Director, CAA
...

Entebbe Airport Buyer To Pay 1 Dollar

Entebbe-gate scandal has taken a new twist after it emerged last night that the investor widely expected to take over the airport is paying ONE DOLLAR for the multi billion shilling facility as was the case with the defunct Uganda Dairy Corporation.In 2007, the government of Uganda leased Uganda Dairy Corporation to a Thai Investor at a nominal fee of 1US$.

We have exclusively confirmed that like Uganda Dairy Corporation which was given out at 1$ because of heavy indebtedness, the Civil Aviation Authority (CAA) which runs Entebbe Airport has suffered the same fate.The Authority, according to a report we have obtained, has been fleeced and is owed by government and ENHAS, the company owned by the powerful foreign affairs Minister, Sam Kutesa to the tune of Shs72bn.
The documents indicate Government institutions owe the Authority Shs68bn while Kutesa’s debt stands at Shs2bn. Because of this CAA is failing to modernise the airport. The report has been taken to President Museveni who has directed a technical team that was set up to study the proposal to expeditiously work to dispose of the airport. CAA has a CHOGM debt of Shs72bn which it is now finding difficult to service at Shs2bn per month.

The Dodsal Group that is going to win the lease however is only paying one dollar because of this hopeless CAA is in.Sunday Pepper, a sister paper of The Red Pepper, broke the story three weeks ago that Government was selling off Entebbe International Airport to a private investor.The paper reported that officials from Dodsal Group, a United Arab Emirates (UAE) based consortium met with President Museveni over the matter.
Museveni was understood to have given a nod to the sale with a view of improving the standards. The buyer is also expected to build a tax free shopping zone similar to what you have at Dubai airport. Because of the proposed tax free shopping complex, the new owner will acquire the huge swathe of land near the airport. Part of this land belongs to the Veterinary Institute and all the government land stretching to Kigungu Island. He will acquire the new and old terminals, all the buildings and storage facilities and parking thereon. Dodsal, we can reveal, is signing an agreement with the Ugandan government to buy, own and operate the airport for 49 years.

In technical terms, such an agreement is classified as BOT (Buy, Operate and Transfer back to the owner after the expiry of the lease.According to the Memorandum of Understanding reached between the government of Uganda and Dodsal Group, it was agreed the group will spend US$1m (roughly Shs2bn) on a feasibility study for an integrated infrastructure development plan of Entebbe Airport Free Trade Zone and Export Processing Zone Complex. “Dodsal Expects to spend about US Dollar 1m on such feasibility study with no risk, cost and liability to the government of Uganda,” the memorandum signed on August 4th 2008 reads in part. The former minister of state for Investments, Semakula Kiwanuka signed on behalf of Uganda government while Rajen A Kilachand signed on behalf of the Dodsal Group.