By Izama Angelo & Emmanuel Gyezaho
Oct 26, 2003 - Monitor
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KAMPALA - Government has spent at least Shs 5.4 billion on Apparels Tri-Star, the company that fired hundreds of its workers last week. Details emerging from the agreement show that government also committed itself to secure land for Tri-Star as well as pay some of the transport costs of the company. Government also promised Tri-Star, which is ran by Sri Lankan businessman V. Kananathan, hefty contracts to manufacture uniforms for the army and other government agencies as well as pay taxes and duties on machinery, equipment, furniture and vehicles imported by the company. These are some of the contents of the agreement between government and the firm, a copy of which The Monitor has seen. It was signed on April 24, 2002. The Senior Presidential Advisor on Agoa (the African Growth and Opportunity Act), Mr Onegi Obel, signed for government, while This is the first time details of the original agreement are revealed. Although the textile firm enjoys such perks from government, it is not clear how much money comes into the national treasury from the Agoa exports to the United States. The textile factory was closed last week after more than 200 female employees went on strike protesting low pay and poor working conditions. The management later announced that it was sacking its entire production staff - including the striking young women, popularly called the Agoa girls. The High Court later issued an injunction staying the dismissals and the girls have since filed a civil suit against the company. Tri-Star was set up to manufacture garments for export quota-free to the United States under Agoa but the details of the agreement between the company and government had never been revealed. The Tri-Star project is part of the government push for the export from Uganda of value-added textiles to the United States taking advantage of the tax and quota-free Agoa channel. As a result the company and its activities have continued to receive the highest government support, which initially included the mass mobilisation of hundreds of young women to fill up its employment vacancies. In the agreement, government and the company agreed to create employment as a way of fighting poverty. The agreement has several soft perks for the firm. Government, for example, agreed to pay 71.5 percent of taxes on the railway transport charges for each container of raw materials or finished products to and from Mombasa in the course of Tri-Star's export business. The agreement also shows that government agreed to avail for lease 6 acres of land at Bugolobi and secure local orders from institutions such as the military, police, prisons in the manufacture of uniforms, four months from the signing of the pact. Sources in the Ministry of Finance told The Monitor that the subsidies offered Tri-Star amount to huge allocations from the treasury to the company. Highly placed sources told The Monitor that government initially spent $1.9 million (Shs 3.9 billion) on Tri-Star, and again a further $1.35 million (about Shs 1.5 billion) in the last financial year. This is part of a government promise in the agreement to give the company "the full range of investment incentives available for investment" in Uganda. Tri-Star, on its part, agreed to rent the refurbished former Coffee Marketing Board premises in Bugolobi, bear the cost of operating the factories, cater for allowances and salaries of the employees, pay electricity, water, and telephone bills plus cover insurance. |
� 2003 The Monitor Publications
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