The management of Nile Hotel International Limited today appeared before the parliamentary committee on commissions, statutory Authorities, and State Enterprises COSASE to respond to audit queries highlighted by the auditor general’s report of the financial year ended 30th June 2023.
However, the committee bounced them after failing to show up with the accounting officer of their mother vote of Uganda Development Corporation UDC; the government’s business arm. They were sent away to come back with the Managing director of UDC.
Nile Hotel International Limited is a government-owned company in charge of Kampala Serena Hotel and government shareholding in Igongo Cultural Hotel in Mbarara. It’s however on the spot over a Shs7.7bn loss
The Auditor General noted that in September 2023, a shocking settlement was reached between Nile Hotel International Ltd (NHIL) and the Uganda Revenue Authority (URA), leading to the aforementioned loss. Despite a court judgment ordering URA to pay NHIL 11.17 billion shillings, the parties agreed to a drastically reduced payment of 3.41 billion shillings, a mere 31% of the original amount.
The deal sparked outrage, with many questioning how such a drastic reduction had been agreed upon to leave NHIL with a staggering loss of 7.77 billion shillings, a whopping 69% of the initial amount. The company’s manager Barungi says the matter is still before the Attorney General to guide how to mitigate the loss.
Nile Hotel International Ltd (NHIL) management so also queried for investing in Igongo Country Hotel and Cultural Centre and failed to transfer the land ownership to the company’s registry.
According to the Auditor general’s report, NHIL made a lucrative investment in Igongo Country Hotel and Cultural Centre, acquiring a 49% shareholding for 11 billion shillings. However, in a shocking oversight, NHIL failed to transfer the land ownership to the company’s registry which left the company vulnerable, paving the way for a massive loss.
The hotel’s land remained unregistered, casting a shadow over NHIL’s investment. Barungi blamed the query on the tedious process of acquiring land titles.
The management also revealed that the 30-year confession of Serena Hotel which ends in 2034 has started yielding profits for the government after overcoming initial losses that Nile Hotel suffered under the management of the government. Barungi revealed that they have sofa remitted over 4bn in dividends to government coffers.
