Public backlash has forced Ministry of Finance to rescinded on its decision to settle Shs1.9bn outstanding energy bills for Fine Spinners and Nyanza Textile Mills also known as Nytil.
The Ministry of Finance recently tabled a Supplementary budget of Shs33bn with part of the money meant to settle electricity bills for Nytil and Fine Spinners, private companies to a tune of Shs1.9bn.
It is worth noting that following the privatization of Nytil by the NRM Government, the company which was the largest textile industry in East Africa fell into hands of private players, a move that saw over 7000 people lose their lives.
In 2000, the then Minister of Finance (Privatization), Manzi Tumubweine told Parliament that Uganda lost US$ 4.9m about Shs9bn at that time’s exchange rate that Government expected from sale of NYTIL in Jinja.
Manzi, while briefing MPs of the 7-year old privatisation process at a workshop for MPs at Nile Hotel Conference Centre, said government wouldn’t get the money because Picfare Ltd which bought NYTIL had been struck off the registry of companies.
“As we talk now, there’s no NYTIL-Picfare Ltd as lenders of money to Picfare have sold it off to Southern Range of Hong Kong…Government will not get US$4.9m,” he said.
In a related development, the Budget Committee recommended to Parliament to approve Shs3.9Bn for winding up of Privatisation Unit, a body that was charged with selling off public properties.
Parliament was informed that in FY2019/20, Shs2.8bn was appropriated for the Privatization Unit and this included Shs1.5Bn for Wages and Shs1.3bn for non-wage to supplement the funding from the divestiture account.
However, following the transfer of all divesture funds to the Uganda Consolidated Fund Account, the appropriated amount of Shs1.5bn was not sufficient to cover the salaries for the whole Financial Year.
The Budget Committee observed that the Privatization Unit had outlived its usefulness as most of its activities can be adequately absorbed in other government institutions with MPs.
“Its continued existence is an unnecessary liability to the government. The committee therefore recommends that a total of Shs 1.090Bn to cater for salaries for five months from February to June 2020 be approved. The plan for winding up the Unit and the repealing of the PERD Statute should be expedited and presented to Parliament for necessary action. No further request for funding will be approved for the Unit by Parliament,” MPs said.
