�Revisit Bidco Deal�
By Felix Osike and Mary Karugaba
LOCAL oil seed producers and processors have petitioned Parliament over a plan by the Kenya-based vegetable oil company, BIDCO, to invest in Uganda.
In a nine-page petition to the finance and economic development committee, the 40-member Uganda Oil Seeds Producers and Processors Association (UOSPPA), said despite their effort in oil production since 1995, the Government had ignored them.
�It�s unfortunate that government has never recognised the effort of over 40 vegetable oil producers. This act is very demoralising to both the small-and medium-size oilseed producers and processors, who have been struggling on their own with some help from USAID and DANIDA.
�We have gone through a lot of hardship in acquiring costly loans and paying multi-taxes to sustain the vegetable industry,� read the statement.
UOSPPA said the Government did not consult them on the agreement that guaranteed Bidco a sh200b loan.
The Bidco project will comprise an oil mill and o
il palm plantations in Kalangala district and an oil refinery in Jinja for processing and refining the oil into products.
In a separate petition to the committee, seven oil seed firms, including Mukwano Industries Ltd., objected to the inclusion of a refinery in the project, saying BIDCO would outcompete and suffocate companies not enjoying tax incentives within the oils and the soap sector.
They accused the line ministries of poor insight and mismanaging the country�s resources.
�It clearly shows that the two ministries were not aware of the existence and effort made in the oil sector by over 40 local investors who have reversed the importation of vegetable oil since 1995 by 40%.�
Last year, the Ministry for Finance, representing government together with Bidco and IFAD/ World Bank signed an agreement to support the development and production of vegetable oil in Uganda.
UOSPPA was also not happy about the incentives given to Bidco, which include a 25-year
-corporate tax holiday and a 12-year VAT deferrals on the produce as fatal local investors.
�Bidco was accorded some of those incentives the local investors have been crying for. For 25 years Bidco will not be paying taxes, no money on land development while the local oil investors will have to pay taxes, struggle to acquire land, plant oil seeds under harsh conditions and expenses, leaving aside the undeveloped infrastructure that are permanent constraints to vegetable oil production� they said.
UOSPPA said local companies not enjoying such tax incentives within the soaps and oil sector would be outcompeted by Bidco and eventually forced out of business.
�In the agreement, Bidco could expand its activities without costs and liabilities all over the country whenever it wants so long as it can make profits. The question all stake holders are asking is: is Bidco a Ugandan agent or charitable organisation?�
UOSPPA said the the future of the beneficiaries was doo
med unless investors in the sector were accorded equal terms.
Ends
New Vision: Monday, 15th March, 2004
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JS: Not one drop of edible oil will ever be produced from this project. It is just another case of "bait and switch". AND, why not produce oil from maize and cotton seeds or sunflower seeds -- all of which are already grown by our small-scale farmers????? This is a major heist!
I will share with you IFAD documents (much, much more than is available at www.ifad.org) about this deal at as soon as I can scan them.
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