September 8, 2000
The Inspector General of Government (IGG), Jotham Tumwesigye, has discovered that the National
Social Security Fund (NSSF) has lost over sh3.3b in a controversial purchase of Udyam House in
Kampala.
The IGG now wants the Chief Government Valuer (CGV), Eddie Nsamba-Gayiiya, to be immediately
suspended for valuing the building at sh9.8b. He also recommended that Gayiiya be "disciplined
professionally and administratively." "The CGV should be held responsible for this loss. It is also possible
that the Government may in the past have lost money through the hands of such CGV. Either he is too
incompetent for the post or he deliberately did the shoddy work for reasons best known to him," he
said.
He said since he did not have the powers to discipline
Gayiiya, he would forward the case to the Surveyors'
Registration Board. "Administrative action will follow the
outcome of the Surveyors disciplinary proceedings. The
decision of the Board should be communicated immediately
to this office," he said.
An official in the IGG's office said, "We suspect the sh3.3b
was shared by some officials in NSSF, the banks and
government."
On February 28, 2000, the IGG received telephone calls
accusing the NSSF of purchasing, "through
non-transparent procedures, a dilapidated Udyam House
at an exorbitant price of sh9.7b."
The probe was prompted by complaints from the Movement Secretariat in February and from President
Museveni in April. Museveni reportedly said he did not find it justifiable that Udyam House, which had
almost been bought by the Movement Secretariat at sh3b, had been bought at sh9.7b by NSSF.
NSSF bought the 40-year-old, four-storey building from the Bank of Baroda at sh9.7b over sh4.5b
the Sugar Corporation of Uganda Ltd. (SCOUL) owed to the bank to whom the Udyam House, a
SCOUL property, had been mortgaged. Udyam House is at Plot 4 Jinja Road.
By June 1998, SCOUL owed Baroda over sh4.5b and on July 10, 1998, the bank's managing director,
A.M. Rao, wrote to his NSSF counterpart, Y.R. Barongo, proposing the sale of the property. On
October 5, 1999, Barongo wrote to Rao asking for details about the property.
On October 19, 1999, NSSF appointed the CGV to value the building. Other valuers were, Associated
Consulting Surveyors (ASC), engaged by the Movement Secretariat, valued it at sh5.4b, Chartered
Valuation Surveyors (CVS), engaged by the Mehta Group, had sh6.5b and East African Consulting
Surveyors (EACS) appointed by the IGG as an independent valuer had sh6.4b.
On December 10, 1999, after the CGV's valuation, Barongo wrote to the NSSF Finance and Investment
Committee (F&) recommending that NSSF buy the building. On December 22, 1999, gender minister
Janat Mukwaya chaired a "consultative" meeting attended by state minister for labour Philemon Mateke,
permanent secretary M. Odwedo, labour director C.M. Olweny, NSSF board's F& committee chairman S.
Rutega, two NSSF board members L.O. Ongaba and David Ogaram, Barongo and NSSF corporation
secretary J.B. Kakooza. The meeting okayed the deal.
On December 23, 1999 Barongo wrote to Mehta's Africa regional director C. Sharma stating, "Approval
has been given to NSSF to proceed with the purchase of Udyam House."
On February 2, 2000, a sale agreement was signed between NSSF and Baroda. That day, NSSF paid
sh3,766,581,300 in two cheques; one from Baroda for sh3,400,000,000 and the other from UCB for
sh366,581,300. The rest of the payments were made between February and March.
"The CGV did a shoddy job. There is reason to believe that the three valuations done by ASC (sh5.4b),
CVS (sh6.5b) and EACS (sh6.4b) are closer to the true value of Udyam House," the IGG said.
He added, "These valuations deviate from the CGV's valuation by over sh3.3b. This difference is too
wide for any professional valuation to be relied on," the IGG said. He said the CGV did not show the
breakdown nor the method of valuation in his three page report to NSSF. It was not until the IGG urged
him to produce his valuation report that he tried to put things together which took him three weeks to
do. "It is clear that the figure of the CGV is unrealistic and completely out of range," he added.
"We think that such glaring disparity as depicted in Mr. Nsamba-Gayiiya's valuation from other
valuations cannot be just explained away as a mere difference in professional opinion. It is obvious the
valuation was superficial," the IGG added.
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August 12, 2000
The National Social Security Fund (NSSF) is expecting sh48 billion as contributions from members,
during the 2000/2001 financial year.
NSSF Chief Accountant Mr. Ronald Mpuuma said, sh6billion will settle member's benefits and a net flow
of sh42 billion.
Mpuuma was last week presenting a document on the
Impact of Interest rates to members fund on accumulated
deficit for the years 1989/90 to 2000/01 before the
Parliamentary Session Committee on Social Affairs that
met in Jinja Nile Resort Hotel.
He told the committee that within the 10-year-period,
NSSF has accumulated contributions from sh1 billion to
sh201.5 billion.
"Every year, the contributions out-compete benefits.
Therefore, the Fund keeps on accumulating," Mpuuma said.
On NSSF investment portfolio, Mpuuma said sh78 billion
was gazetted for liquid bills, while sh45 billion for Short
Medium Bond investment like PTA bonds and loans.
"The balance on total contribution, has been earmarked for long term investment like equity on stock
exchange and real estate.
"With the New Investment Plan however, Mpuuma said, "We plan to spend 11% on total contribution in
bonds, 20% on fixed deposits while 28% will go on Real Estate,"he added.
"We have so far invested in Uganda Clays and also eyeing shares in the BAT and Kinyara," he added
__________
bwanika
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