Dairy Corp sale not transparent
Editorial
Jan 31, 2005
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The Dairy Corporation, the biggest producer of milk in the country, has been offered to a Thai businessman at a nominal fee of $1. This follows a directive from President Yoweri Museveni to the Minister for Privatisation and the Privatisation Unit to remove all financial obstacles to the Thai man getting the potentially lucrative business. This is quite serious, more so coming from the Head of State. We want to be clear from the start that Dairy Corporation is a struggling company that needs recapitalisation ideally from a new investor. Indeed late in 2003, the government injected Shs 3bn into the corporation to keep it afloat. Therefore there is no problem with getting a new investor to take it up. But we have a fundamental problem with the way the Thai businessman has come to win the deal on a silver platter without going through the mandatory bidding process, that had even reached advanced stages. Reliable information indicates that Mr Chatchai Boonyarat of the Maleee Sampran Sampran Public Company Limited, was introduced by Ugandan businessmen. Despite advice from various quarters to Mr James Mulwana, the Thai consul, to encourage the prospective investor to bid, no attempt was made on his part to submit his bid. The President's order virtually halts an international bidding process, which had attracted four serious international dairy producers - among them the Dairy Board of Zimbabwe, two reputable firms from Kenya and another, a joint venture from Switzerland. They have wasted time and money and what is at risk is the reputation of our international tender process, which is now questionable. It is a repeat of the Kinyara Sugar Works debacle whose bidding process was stopped in similar manner after the PU had spent Shs2b to prepare it for sale. The Banyoro resisted the sale and the exercise put off at a terrible cost. Political interference also messed up the sale of UCB and Sheraton. Ugandans need an explanation on why the bidding was stopped. How much do we know of this Thai company? What is his business plan, what is so special in it? Why was his contract rushed and signed in one day? Instead of bringing in capital, why does he ask for capital injection from government? The world is rethinking the whole privatization strategy, since in many places it has delivered the expected results. But if we decide to do it, we must do it well. This one is certainly not transparent and Parliament must ensure it is reconsidered. |
© 2005 The Monitor Publications.
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