Parliament has learnt that government has never financed the nearly 20-year-old Uganda Air Cargo Corporation (UACC), whose services benefit mainly State House and Uganda People’s Defence Forces.
UACC, Parliament was told, has been surviving on revenue generated from charter services for both passengers and cargo it renders, right from purchase of the aircraft to servicing of its operations.
The corporation, over stretched by a series of setbacks threatening its survival, ran to Parliament seeking a supplementary budget of US$10 million to repair a C130, one of the grounded aircrafts and another US$5 million to acquire a B737-500 plane.
Officials from the corporation led by the Minister of Defence and Veteran Affairs, Adolf Mwesige, appeared before Parliament’s Committee on Defence and Internal Affairs on Tuesday, 12 November 2019 to make their case.
The board chairman, Captain John Emily Otekat, explained that the corporation currently runs one aircraft which has disadvantaged the corporation’s business prospects saying most clients require a backup aircraft to enter into a contract.
“In aviation, you cannot win a contract when you have one aircraft. As a result, last year, we missed a contract from the USA which would have earned us US$11million annually,” said Otekat.
He also told Parliament, that the corporation rents premises at Entebbe Airport where it incurs high costs.
This withstanding, Otekat said the corporation with its one aircraft, has grown profitably from Shs 15 billion in 2007 to Shs 138 billion in 2017. He interested government in joining the lucrative air cargo business.
In line with their investment plan, he also requested government to provide US$88 million for construction of an aircraft hangar, so that all planes are serviced within the country as opposed to Nairobi as is currently the practice. If Uganda is able to service aircrafts, Otekat said, it would earn about US$160 million annually.
The committee, impressed by the corporation’s operations wondered why the ministry had never addressed the matter during the budget process. “It beats my understanding that government has not been able to borrow for its own where we can even generate income but borrows for projects we even get to pay for,” said Doreen Amule, the committee chairperson.
Minister Mwesige said he had untiringly approached the finance ministry over the corporation’s funding needs but was unsuccessful.
State Minister for Veteran Affairs, Bright Rwamirama, said they were grappling with competing priorities, hence the failure to allocate funds to UACC. “We, for instance, do not have a referral hospital and you have been asking us why we take the army to Nakasero Hospital – but even the money we have is not enough to complete construction of the hospital,” said Rwamirama.
The committee unpleased with ministry’s laxity over the operation of corporation, resolved to engage the finance ministry before escalating it to the plenary.