Inside: Ugandans’ changing tastes and styles in housing
UShs 7,000 | KShs 200 | Tz 4,400 | RwF 1,650 | SSP 240 | Others US$3
www.infrastructure.co.ug | March - April 2018
Naguru Skyz Hotel: A fine piece of real estate
MINING
AVIATION
OPINION
International origins of the sand mining craze
The new Uganda Airlines takes shape
The Achilles heel in Public Private Partnership
Kaliro Sugar/Sugar & Allied Industries Limited, was established in 2011 with the aim of meeting the regional sugar deficit and giving Uganda 100 per cent sugar self-sufficiency. The establishment followed research that showed that Kaliro district, strategically placed between Lake Kyoga and Lake Victoria, had the best climate for growing premium sugar cane that would make delicious sugar.
Casements Africa Ltd, Rwanda in Kigali, Rwanda is a branch of Casements Africa Limited Uganda, some of the notable projects it has carried out has the residence of the Rwandan President among others.
Casements Complex, 5th Street - Plot 86/90 Industrial Area, P.O. Box 4641, Kampala, Uganda.
Tel: +256 414 234 001, +256 414 234 001, +256 414 234 001 Fax: +256 41 234 301
Rhino Footwear Ltd: Located in Kampala was established in 2009 but is currently one of the major players in footwear manufacturing in Uganda. Its Rhino brand gumboots are of unparallel quality and the field foot wear of choice in Uganda. Rhino brand products are now distributed and well received in neighbouring countries like Rwanda, Burundi, the Democratic Republic of Congo and South Sudan.
Oxygas Ltd: Located in Nakawa, Kampala is the leading manufacturer of medical and industrial gases in Uganda. With its state-of-the-art, 200m2/ hr Gas plant the company supplies the different types of gases to the government of Uganda (National Medical Stores) for medical purposes and other private sector manufacturers like Century Bottling Co. (Coca Cola), Nile Breweries Ltd, among others for brewing and other industrial uses. Oxygas Ltd is ISO 9001: 2008 Certified.
Website: www.alam-group.com Email: alam@alam-group.com
China Communications Construction Company (CCCC), is a world leading large comprehensive infrastructure contractor and investor, principally engaged in the investment, construction and operation of transport infrastructure, dredging and heavy machinery manufacturing, real estate and urban complex development business. The company’s profitability and value creation capabilities are in a leading position among its global counterparts. CCCC was ranked at No. 103 in 2017 by Global Fortune 500 and No. 3 in ENR Top 250 International Contractors. China Communications Construction Company entered the Ugandan market in 2006.
Ongoing projects by China Communications Construction Company 1. Upgrade and expansion of Entebbe International Airport Project Construction of the Kampala - Entebbe Expressway 2. project Upgrade of the Soroti - Irere Road Project, and 3. Upgrade of the Mubende - Kakumiro - Kagadi Road 4. Project Design and Build of Masindi (Kisanja) - park Junction 5. And Tangi Junction - Paraa - Bulisa Roads Updrading Project
The completed Kajjansi Interchange along the Kampala - Entebbe Expressway.
Mr. Chen Fenjian, president of CCCC meets Yoweri Museveni, President of Uganda.
CCCC (U), Chairman of the Chinese Enterprises Chamber of Commerce in Uganda, organised the 1st Uganda - China Economic Investment and Trade Cooperation Forum -2017 at Speke Resort Munyonyo.
Contents www.infrastructure.co.ug | March - April 2018
The Infrastructure Magazine is Published by
2nd Floor, Ntinda Shopping Centre P. O. Box 11670, Kampala, Uganda, Tel: +256 414 667 688; +256 700 665 775; Mob: +256 776 477 751; +256 723 665 775; E-mail: editor@infrastructure.co.ug; inquiry.acl@gmail.com; Website:www.infrastructure.co.ug www.acl.co.ug Editor Simon E. Omoding Sub Editor Arthur Matsiko Writers Benjamin Mukose Jacob Okwii Jackie Asasira Daniel Otto Roger Kyazze Guest Writer Ricardo Hausmann
10 COVER STORY
Naguru Skyz Hotel: A fine piece of real estate
04 From the editor 05 News Round-up News Analysis
8 The new Uganda Airlines takes shape Feature
Marketing Team Leader Martin Ariko
10 Are our housing styles and tastes changing?
Sales Executives Edrine Apolot Gaston Atusiimire Grace Ajulong Grace Awor
Cover Story
Intern Monica G. Ikol Design/Layout: Peter Mugeni Slick Republic Limited ISSN: 2523-191X (print); ISSN: 2523-1928 (Online)
13 Kiira Motors: Some lessons from the global auto industry 16 Naguru Skyz Hotel: A fine piece of real estate Lead Story
18 The state of real estate Captains of Industry
22 Need for a regulatory framework for budding real estate sector Regulation
24 Will Landlord & Tenant Bill stifle real estate development? Company profile
33 Alam Group of Companies
In the next Issue... We focus on the NRM Manifesto 2016-2021, mining, oil & gas. We review the Manifesto infrastructure (roads, electricity, dams, etc). We also focus on mining, oil and gas sector in the country. Are you involved in delivering any of the NRM Manifesto infrastructure projects: roads, electricity, water & sanitation, manufacturing, agroprocessing, housing, ICT, etc? Into mineral prospecting, processing, export? In the oil and gas value chain? Services to service these areas- insurance, banking, logistics? Constructor, engineer, architect? Dealer in vehicles, construction equipment? Supply goods and services related to road, bridges & ferries construction and operation? Manufacturer/supplier of goods, equipment, materials, technologies, etc, used in the oil & gas, mining, infrastructure?
This is the opportunity for people who matter to know what you are doing. To participate in the next issue. Get in touch: Tel: (+256) 700 665 775; (0) 414 667 688; (0) 776 477 751; Whats App: +256 (0) 752 665 775 E-mail: info@infrastructure.co.ug; inquiry.acl@gmail.com Website: www.infrastructure.co.ug @theinfrastructuremagazineUG
@TheinfUG
Real estate as an important part of infrastructure In this edition, we focus on real estate because it is a critical piece of the infrastructure sector. You can have all the other bits of infrastructure in place like a good road network, internet connectivity, electricity, etc, but if your real estate is poor, you are unlikely to attract interest.
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herefore, if a country’s strategy is to invest in increasing its profile to attract foreign investment, tourism, international meetings and conferences, international organisations and high-profile and high-spending individuals, then the trick is in the real estate. A country that has high-quality residential housing at a good price and good quality office space attracts international organisations and their staff. A country without good hospitality infrastructure, even if it actually has good tourist attractions, does not in the end attract as many tourists. Equally, a country with poor industrial and commercial real estate stays unattractive to foreign investors. That is why many countries are investing heavily in developing well-serviced business and industrial parks. Such is the importance of real estate. For this issue, we scouted in and around Kampala for a property to show off the face of real estate in Uganda today. We were looking for a well-located, well-designed, well-built and finished piece of estate; work that speaks to the current and futuristic Ugandan psyche. In this endeavour, we saw several new office buildings in Kampala Central business district, Nakasero, Kololo, Naguru, and other areas within the city. We also saw new residential upmarket properties like apartments and bungalows in different locations. There are also a few other commercial, hospitality, educational and medical properties coming up
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In this issue, we also take you through the state of real estate in Uganda; the development of the sector over the years, the changing taste of Ugandans in residential housing.
or just being completed that could have found their way to grace our cover. We, however, settled for the Naguru Skyz Protea Hotel. The hotel has an idealistic location on Naguru hill that gives the estate a 360 degrees view of Kampala city. This priceless location was not let down by the hotel’s designer. The architect idealised an innovative, fine piece of art that stands gracefully yet seductively on top of the hill. Its curves, finishing and posture give it an ultramodern, tastefully opulent yet accessible feeling. It is simply a brilliant piece of work. In this issue, we also take you through the state of real estate in Uganda; the development of the sector over the years, the changing taste of Ugandans in residential housing. Like no one has done before, we give you a context of sand mining in the country. Plus many other interesting stories are on your menu here. Very important: We thank you all our readers who take time to give us useful feedback. Thank you for the compliments. Rest assured we will continuously use your observations to improve. And as always, say something: editor@infrastructure.co.ug Enjoy your Magazine. Simon E. Omoding Editor
5 March - April 2018
South Africa’s biggest cement maker eyeing Kenya, Uganda
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enya and Uganda are within the radar of South African cement maker PPC Ltd. as possible new sites for setting up manufacturing entities, the company’s senior managers said recently. In an interview with Bloomberg News, Johan Claansen, the company’s CEO and Mokato Ramafoko, the head of Africa operations, said after stabilising the company that hit turbulence a few years ago, PPC Ltd.’s new growth strategy involves spreading its wings further into Africa. Ramafoko said East Africa, specifically Kenya and Uganda, are good
prospects. Outside South Africa, the company has cement-making outfits in the Democratic Republic of Congo and Ethiopia. Ramafoko said the prospects for cement are up in the region because nearly every country is planning big infrastructure. “There’s an emergence of African leaders that are really starting to change the continent. New presidents of countries including South Africa, Ghana and Zimbabwe are all in the process of approving new infrastructure
projects that benefit cement makers, while the Ethiopian capital of Addis Ababa is ‘a construction site’,” Ramafoko told Bloomberg News. In the coming few months, Uganda will welcome another three cement factories, all based in Tororo in eastern Uganda. The new factories are by Hima Cement (who hitherto operated only one factory in Hima, Kasese), Simba Cement and National Cement from Kenya. Tororo Cement and Hima Cement have been the only cement manufacturers in the country.
Uganda development minerals assessment reports launched
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he Ministry of Energy and Mineral Development (MEMD) in March launched Uganda’s first Baseline Assessment and Value Chain Analysis Study Reports for the Development Minerals Sector. Development minerals are those relatively inexpensive minerals and materials that are used in daily lives to make products such as plates, paint and toothpaste, to build houses and pave roads. Uganda boasts of a diversity of development minerals including construction minerals such as limestone, clay gypsum, marble and sand among others. It’s also home to various industrial minerals and semi-precious stones. Despite mapping of these natural resources, many of them remain largely unexploited. The assessment was conducted under a partnership with the European Union, the ACP Group of States and the United Nations Development Programme (UNDP). The study reports profile the develop-
6 March - April 2018
ment minerals in Uganda and provide crucial information on the size of the sector, the existing untapped opportunities for local economic development, employment for youth and women. It also makes recommendations on specific interventions necessary in strengthening the regulatory framework, oversight of environmental and health standards, and mechanisms for conflict management towards boosting the productivity of the Development Minerals sector. The reports provide more comprehensive
data on the range of these natural resources, their sites of extraction and the number of people who benefit from them, especially in terms of employment. In addition, the reports contain analyses of the current laws and implications for the Development Minerals sector and provide recommendations on how the sector can be transformed to drive inclusive growth in Uganda. The Reports were commissioned by the ACP-EU Development Minerals Programme, an initiative of the African, Caribbean and Pacific Group of States, financed by the European Union and UNDP and implemented by UNDP. The three year ACP-EU Development Minerals Programme’s focus is to improve the management of the development minerals sector in Uganda and globally. It provides capacity-building support to small-scale private sector, associations/chambers, public institutions and communities that operate in the development minerals sector.
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Uganda finally signs agreement to develop oil refinery
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n what can be seen as a major turn towards oil production, the government of Uganda in April signed an agreement with a consortium that will fund and develop the country’s oil refineryThe Albertine Graben Refinery Consortium includes Nuovo Pignone International SRL (General Electric in Italy), Intra-Continent Asset Holdings of the US, YAATRA Ventures LLC of Mauritius and SAIPEM SpA of Italy. The Uganda National Oil Company represents Uganda’s interest in the consortium. The Project Framework Agreement will ensure development, design, financing, construction, operation and maintenance of the oil refinery. The consortium will inject up to US$ 4 billion into the project. The project is managed under the private public partnership arrangement in which the Albertine Graben Refinery Consortium takes up 60 per cent of the shareholding, while the government of Uganda holds 40 per cent. Government has interested other East
African countries in taking up stakes on the refinery. So far, only Tanzania has publically said they will take up some stake on both the refinery and pipeline. A statement signed by Robert Kasande, the permanent secretary in Uganda’s minis-
try of Energy & Mineral Development, read: “Under the PFA, the consortium will be responsible for funding the pre-final investment decision activities and will proceed thereafter to construct and operate the refinery.”
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7 March - April 2018
News Analysis
The new Uganda Airlines takes shape By Benjamin Mukose
What started as a pipe dream some years ago is slowly coming to reality. The idea of reviving Uganda Airlines has over the last few months picked pace and gained momentum with all the key requirements seemingly falling in place. Monica Azuba Ntege, the Works & Transport minister, has said the revived airline is expected to make its first flight by December this year.
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ccording to Paul S. Dempsey, professor of law and director emeritus, McGill University Institute of Air and Space Law, Canada, a successful airline must have core fundamentals in place. Key among these include equipment, routes, the right human resource, financing, management and operational plan.
Equipment Azuba told journalists recently that as far as equipment is concerned, government has already placed orders for six aircrafts: four bombardier CRJ 900 series from Canadian aircraft maker, Bombardier and two Airbus A330-200 series from French plane maker, Airbus. This choice of equipment seems to be
informed by the need to operate cost-effective vessels and the targeted routes. According to a feasibility study for the revival of Uganda Airlines conducted by the National Planning Authority (NPA) and Uganda Development Corporation (UDC), one of the major problems attributed to the collapse of the air company previously was bad choice of aeroplanes that were expensive to run and maintain. One of the key recommendations of the study is that in the revival of Ugandan Airlines, informed and wise choice of adept but easy to manage equipment must be made. Bombardier seemed to be the easiest destination for this purpose. The Canadian company recently reported that their equipment is catching the eye of the African market because of its cost-effectiveness. “With the lowest overall cost and highest reliability standard, the CRJ Series and Q Series aircraft are low-risk investments for airlines looking at increasing profitability,” David Speirs, Bombardier Commercial Aircraft’s vice president, asset management, said. Adding to Speirs’ voice, Jean-Paul Boutibou, the company’s vice president, sales, Middle East and Africa, said: “We have successfully placed a significant number of pre-owned regional aircraft with more than seven airlines from the [African] region in the last three months.” The Infrastructure Magazine has established that other airlines in the region that have recently placed orders for the Bombardier CRJ and Q series equipment include Kenya’s DAC East Africa and Silverstone Airways, Congo Airways, among others. Airbus A330-200 is dubbed by its manufacturers as “the versatile mid-sized wide body”. Airbus A330200 is a modern design craft known for its comfort and modern efficiency features suitable for long distance flights.
Eng. Monica Azuba Ntege, Minister of Works & Transport
8 March - April 2018
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News Analysis
An Airbus A330-200 aircraft
The NPA and UDC study recommended that for economic viability, the new Uganda Airlines needs to start with regional flights and international routes.
gers to Entebbe. If they need further internal connecting flights, those passengers will be passed on to local operators such as Eagle Air. This magazine has also been informed Routes that the new Uganda AirIts routes also determine lines will run its own handling services at its hub in the profitability of any airlines. Government, Entebbe. Currently Enhas, High-value the routes generthrough UDC, ate better revenues for the a private company, does all will provide company. Azuba told journalground handling services at least US$ 1 ist the new Uganda Airlines at Entebbe International billion in the would start with international airport. Uganda Airlines initial stages, and regional flights. will do its own handling, but the company “The four (bombardier) airand will not seek to offer will eventually craft will be in operation withits handling services to list on the stock in the region, and that includes other airlines in the short exchange. Kenya and all other countries term. Aviation experts say we have bilateral agreements ground handling is also a with,” she said. good source of revenue for For the international routes, The Infraairlines. That is why Kenya Airways and structure Magazine understands that govEthiopian Airways do their own handling ernment has tasked the ministry of Foreign in their hubs in Nairobi and Addis Ababa Affairs to engage with concerned foreign respectively. governments to ensure the old routes of the Human resource old Uganda Airlines are restored. This will The other critical element in operating essentially mean that routes to Western Europe – London, Rome and Brussels – are the an airline is the experienced and skilled likely initial destinations. workforce to do its operation and management. Azuba told the media that decisions The NPA/UDC study did not recommend to put in place a critical human resource immediate start of local flights. However, have already been made. A few highly expethe company is working out an arrangement rienced skills will be headhunted from the whereby it will carry international passen-
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international market, while the other general skills will be sourced locally. Recently when Kenya Airways was restructuring following a 5 year deep that almost brought it to its knees, the company hired McKinsey & Company, an American worldwide consulting firm, to prepare a turnaround strategy. One of the areas of focus was human resource. Under this plan, Kenya Airways recruited Polish Sabastian Mickosz as its new CEO. Mickosz is known to have turned around a collapsing Polish Airlines. Uganda will most likely learn from this and try to recruit a CEO with relevant experience.
Management, financing Management and operational pans are as important in the airlines industry as the people. Without a plan, there is no business. The NPA/UDC report acknowledges as much. One of the outputs of the feasibility study was the design of the operation and management framework for the new airlines. Azuba said the plan is in place for the short, mid and long-term. Government, through UDC, will provide at least US$ 1 billion in the initial stages, but the company will eventually list on the stock exchange. It is understood that government is currently discussing with some foreign investors who will take a stake in the national flyer.
9 March - April 2018
Feature
An artistic impression of Venus Apartments in Najera. Photo/Affordable Housing Uganda.
Are our housing styles and tastes changing? By Jackie Asasira & Daniel Otto
Housing is like clothing fashion. The designs of houses, styles, ownership type, finishing tastes and even building materials are dynamic and reflective of the society’s psyche. It portrays the society’s current socio-economic and political state of mind. From housing patterns, you can tell generational differences, state of security of a country, economic prosperity and to some extent the political thinking of a people.
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rchitects, real estate developers and observers of Ugandans’ housing trends say that though slow, there is a shift in style, taste, approach to home spaces and ownership. The pundits say this may be a result of several factors like generational change from baby boomers to millennials; it may be that the number of Ugandans with disposable income is growing, and that younger Ugandans are more exposed through the Internet, studying, and living in other countries. As such, younger Ugandans are beginning to lead the way in demonstrating different
10 March - April 2018
housing tastes and attitudes from that of their parents’ generation.
Moving from bungalows to flats In many places in Kampala, private estate developers are building apartments/flats for sell. In addition, dealers in the industry say all apartments in good locations are sold out even before the final brick is laid. On the other hand, bungalows for sale tend to stay longer on the market. “We have been stuck with some bungalows for as long as two years now,” a real estate dealer who did not want to be named told this magazine. The number of young Ugandans buying apartments and preferring to stay in flats, on the other hand, is growing considerably. The older Ugandans still prefer to stay in their lone fenced bungalows. The wealthier Ugandans irrespective of age, however, still prefer to live in their palatial several acre-garden bungalows. Raheem Abbas of Affordable Housing/
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Feature Universal Enterprises, a real estate developer that has built and sold several hundred apartment units in the prime areas of Najjeera, Naalya, Kira, Bweyogerere in Kampala, told The Infrastructure Magazine that flats are selling much faster than bungalows. Most of the time, flats are sold out even before they are completed. And the demand remains high. Abbas added that Ugandans are increasingly realising one can enjoy the same space and convenience for a cheaper cost. “Take for example in our Venus Apartments in Najjeera, a two-bedroom apartment provides space for about 218 square metres. With the condominium arrangement, you can own that same space in an apartment setting for about UShs 135 million. To develop the same space in the same location, a bungalow style would cost no less that Shs 300 million,” he said. Dr Lillian Namuganyi, a lecturer of Architecture in the College of Engineering, Design, Art and Technology at Makerere University told The Infrastructure Magazine that Ugandans are more sensitive in their housing tastes. “Ugandans are increasingly more discerning of quality in both design and construction. Many have encountered what is bad, and what is reasonable through various avenues including travel and media. If apartment living gives them better quality, then they are open to that option,” she said. Namuganyi added that today, families are smaller and people can live more convenient lives. “If one can live a carefree lifestyle without the hassle of servants, there is no need to burden oneself with a large home. There are services and machines. The situation is similar to the ‘Grand Domestic Revolution’ of the West. You can buy cooked food, do your laundry in a machine or at dry cleaner’s, etc... So you opt for a smaller home,” she said. Affordable Housing’s Raheem echoed the same sentiments. He said bigger houses and bigger compounds attract higher maintenance and management costs, which is chasing some Ugandans away from the huge-bungalow; huge-compound kind of living. Besides, the costs of acquiring an apartment are relatively lower than a bungalow. It is easier for the young and upcoming professionals to take out mortgages and pay out as they live in their own apartments. The trend in the past was for young people to rent apartments out of their salary for years, until they were able to construct their own bungalows.
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“In our apartments, for Shs 86 million, you can own a one-bedroomed home,” Raheem told The Infrastructure Magazine. This emerging trend seems to be driving the demand for apartments/flats in Kampala. This trend will only continue to grow as Uganda’s largely young population comes of age and gets to the job market.
Buying finished units A few years ago, to own a house, a typical Ugandan would buy a plot of land and start building, sometimes taking several years to complete. It was a painstaking activity, involving time demands for managing the sites to ensure materials are not stolen. Indeed, many Ugandans paid much more to build their houses because they lost materials to thieving builders. Ugandans in the diaspora have lost millions of shillings to relatives to whom they send money to buy land and build, but the money is usually swindled. To cut out all these cumbersome and risky processes, many Ugandans now prefer to buy finished housing units from developers. For those in the diaspora, it is a sure way to guarantee that when you save money to own a house, that money actually buys the house. For Ugandans living in the country, it means one can focus on their core business, without having the stress of site supervision and control. All you need is to save the money to buy a unit. Raheem attributes this to the change in the land laws. In 2011, most of the land available for development was leasehold. After the condominium law was passed, now people can own a piece of the same
Dr Lillian Namuganyi, a lecturer of Architecture in the College of Engineering, Design, Art and Technology at Makerere University
A villa in Kampala
11 March - April 2018
Feature land, for life. That has considerably brought fact that the land available within 20 kilometres radius of Kampala central busidown the cost of owning a property. The same trend seems to be true of the ness district is becoming slim and pricier. high-end market as well. That explains the The consequence of this is that people are buying smaller pieces of emergence of high-end estate like Mirembe Vilas in Kigo, land to build homes, but to Royal Palms in Butabika and create more space they are Increasingly, new Akright estate in Bwebajja, building vertically. home designs among others. “I wouldn’t say that tend to be more Ugandans are moving away thoughtful, Building homes from traditional homes set tasteful, sensual on smaller plots in large expanses of land and exotic in For those who still tow per se. Rather, I would look. Gone are with the idea of building say that the younger peothe days when ple are more accepting their own house either bearchitects were in cause they want to build it of a diversity of alternashort supply. tives,” Dr Namuganyi told over time or because they this magazine. “Of course, want a specific design, an those with large sustainemerging trend is that the able incomes prefer large sizes of the plots of land is becoming smaller. A land dealer told opulent homes. “Sometimes the choice this magazine that today, they sell more of smaller plots is a result of the high 50X100 (quarter acre) plots than 100X100 cost of acquiring affordable land within (half acre). This is partly explained by the reach of good services, building a spa-
cious family house, and maintaining that house. House helps are more costly and less reliable.”
More tasteful, exotic, sensual properties Increasingly, new home designs tend to be more thoughtful, tasteful, sensual and exotic in look. Gone are the days when architects were in short supply. Because of the availability of design professionals, many Ugandans who opt to build their own homes are taking their time to play with the spaces they have to come up with some elegant and aesthetically appealing designs. Even finishing tends to be livelier, more exotic colour and finishing materials. Dr Namuganyi agrees: “Ugandans are increasingly more discerning of quality in both design and construction. Many have encountered (good designs) through various avenues including travel and media.”
An apartment propriety. Photo/Knight Frank
12 March - April 2018
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Feature
The Kiira Kayoola Bus. Photo/KMC
Kiira Motors: Some lessons from the global auto industry By Simon E. Omoding
As Uganda prepares to embark on turning the Kiira Motors Corporation (KMC) vehicle prototypes to mass cars, auto industry strategists and trend analysts say numbers from the global industry paint a gloomy economic picture for carmakers. They, however, say that for automakers to survive the disruption, they will have to adopt creative ways to deal with critical challenges causing distress to the industry. The distress factors include duplication, costs of manufacturing and innovation disruptions, among others.
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ddressing journalists at the government media centre on April 6, Elioda Tumwesigye, Uganda’s minister for Science, Technology & Innovation, said government has endorsed the idea and roadmap for commercialising the Kiira motor project. This means government will swing into action to put in place an assembly line to bring together the KMC vehicles. So far, the project has developed three prototypes: a bus (Kayoola), a pick-up truck and a sedan (Kiira EV Smack). Kiira cars will run on a hybrid of
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solar, rechargeable Lithium batteries and generator, which the designers say give the car a good powertrain. Tumwesigye said cabinet had instructed the Ministry of Finance, Planning & Economic Development to provide UShs 20 billion for the project in the budget for the financial year 2018/2019. This is the clearest indicator that Uganda is determined to get the Kiira motors off from the prototype to the road, and largely with the government as its main investor.
13 March - April 2018
Feature
A 2015 Nissan Navara: Car makers like Nissan have invested in intelligent technology
It is not clear what level of studies Ugandan authorities have undertaken on the auto industry and weighed their chances, but industry watchers say numbers from analysis shows the industry performs poorly on two critical indicators: return on investment and return on capital, which makes faces for its profitability and sustainability. According to the PriceWaterhouseCoopers (PwC) 2017 Auto Industry Trends report titled “The Future Depends on Improving Returns on Capital,” although sales look good globally, with 2016 recording sales of 88 million pieces (new cars) – an increase of 4.8 per cent from 2015 – this is not reason to celebrate. The PwC report shows that the auto industry performed rather badly on both return on investment and return on capital. Return on investment is the profit an investor gets from every dollar they invest in a particular enterprise. For example, both the Standards and Poor’s (S&P 500) and Dow Jones Industrial Average shows that while returns on investment on other industries were as high as 15.8 per
14 March - April 2018
cent on S&P 500 and 10.8 in the Dow Jones, to the average cost of capital in the industry. the car industry performed dismally, return- Moreover, this follows a track of negative reing only 5.5 per cent – nearly half of other in- turns on capital the previous years. dustry. The S&P 500 and Dow Jones Industrial “These numbers almost outweigh the Average are measures of ecopositive sales and earnings renomic performance of the top sults. They paint a picture of a The PwC report global 500 companies on the sector that is a less attractive shows that the stock exchange, which also or less lucrative place to invest auto industry serves as a good indicator to than other industries, “says the performed the global trends of industry. PwC report. rather badly on This means that the auto It concludes: “This assessboth return on ment suggests that there will industry returned less to its ininvestment and vestors and is, therefore, less be relatively few winners in return on capital. attractive and less luxurious the auto industry during the Return on to invest in compared to other next five years and beyond. investment is the sectors like IT. This could mean Those that do stand out will profit an investor that investors could continbe the companies that harness gets from every ue to drift away from putting their limited capital resources dollar they invest their money in the auto indusin creative ways, to navigate a in a particular try. still-unfolding and unfamiliar enterprise. Return on capital is the landscape.” overall gains made by the total If this is true, then the main amount of money invested in the sector/in- investor in the Kiira motor project will unlikely dustry. The 2016 numbers show that the total receive a return on investment and capital. return on capital invested in the auto industry This, coupled with the fact that Kiira is a new was a paltry four per cent, which is equivalent venture and a tiny maker by global standards
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Feature
The Kiira EV car made by Makerere University students. Photo/KMC
Kiira Motors may bring hybrid car production to Uganda. Photo/KMC
devoid of any economies of scale, only means Uganda’s auto enterprise could be jumping straight to the deep end of the waters. According to KMC management, the project is built on three pillars that promise business value. The first one is value for the customer, in which they promise a good quality car for the best price. They also promise a turnaround of attitude of Ugandans from buying imported cars to buying locally assembled vehicles. According to PwC, however, the area of innovation and technology is throwing many carmakers into turmoil. The cost of cars is
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considerably going up because of the investment in technology that is going into car manufacture. The intelligent systems, electronics and digital systems, software, infotainment and safety engineering features that are going into the modern cars are raising the cost of manufacture. In fact, it is now estimated that the car interior technology (entertainment, safety, intelligent systems, comfort, etc.) contributes up to 20 per cent of the total cost of the car. It is unlikely that KMC will have enough funding to marshal this kind of technology on its own. Evidence shows that car buyers choose
more attributes like utility, sophistication in digital technology, engineering and infotainment systems. Big global manufacturers have, however, developed these technologies or have the financial capacity to outsource software, electronic engineering and digital software specialist companies, for example, in Silicon Valley. What this means is that if the cost of a locally assembled car is nearly the same as the imported car, but the latter demonstrating more sophistication, safety and comfort, it is likely a Ugandan buyer who has the capacity to purchase anyway, will buy from an international maker rather than a basic car assembled locally. KMC’s second pillar of business value is opportunity to the community, in which they promise jobs, manufacture of spare parts, services, etc. Again, the PwC report recommends that for carmakers to survive, they need to go for shared platforms and shared manufacturing. This means that rather than duplicating research, design and manufacture lines for car platforms, carmakers can share the platforms and only work on improving attributes that influence buyers. It is actually recommend that carmakers outsource production of different elements of the car, as they concentrate on assembly. If KMC is planning on local production of parts, re-inventing the wheel in the development of platforms and manufacture of basic car parts that could be made anywhere with good economies of scale, it is very unlikely it will be competitive on the market and survive for long. Thirdly, the company promises an early return on investment to its shareholders, amid report that the return on investment in the industry is treacherous. It is not clear whether KMC is aware of industry factors. The PwC report shows that returns on investment on automakers is a low 5.5 per cent, and that is for the old, big makers who have vast economies of scale. It will be quite a feat for KMC to make a positive return on investment to its investors – the government of Uganda – in the near future.
15 March - April 2018
Cover story
Naguru Skyz Hotel: A fine piece of real estate By Our Reporter
On October 28, last year, Frank Tumwebaze, minister for Information, Communication & National Guidance tweeted: “Happy to Join Carol & @patrickbitature for a thanksgiving mass at their new Protea Hotel Naguru Skyz. Amazing views over Kampala! Congrats Carol & Patrick.”
ment of the different sections of the hotel that give it a fantasy of many blocks, well put together. By day, the blue sky gives the hotel a magnificent azure backdrop that gives it the impression of a 3D piece of art on paper. By night, the dark sky and its little glittering stars provide a different and legendary children tales
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lthough construction of this property had been going on for the last few years behind cladding, Tumwebaze’s was one of the last teaser tweets before the hotel shed off its cladding to hatch itself into Kampala’s skyline. The new hotel eventually swung its doors open to the public for 2017 Christmas. When it finally opened, it got Kampala talking and gazing. The Naguru Skyz hotel, owned by Patrick Bitature of Simba Group of companies, is a fine piece of real estate, thanks to its choice of location, architecture, construction quality and finesse. It deserved a Holy Mass to celebrate its birth.
Location The hotel boasts a clever and an imaginative choice of location that makes its statement and brings out its character. Perching gracefully atop one of Kampala’s tallest hills, on one of the highest spots in the city, the hotel sits on Water Lane, Naguru hill where it commands a 360 degrees view of the city. Because of this location, the hotel’s deck offers incomparable stunning views of the city, by day and by night. This location also gives the hotel close proximity to Kampala’s affluent neighbourhood and upmarket shopping and entrainment centres like Kisementi, Acacia Mall, offices of international organisations and diplomatic missions.
Architecture The hotel’s architect did not waste opportunities provided by its location, as the designer maximized the priceless site to dream out an imposing, elegant, ultramodern, and waxy piece of art. As one drives into the hotel, he/she is captivated by the arrange-
16 March - April 2018
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Cover story
Finishing and finesse
sort of backdrop. One can see how the architect plays with the location and sky backdrop to produce a naturally titillating imagery to the human eye and mind.
The finishing on the wall, roofs and floors is exquisite. The floors, including the walkways, give a waxy clean feeling of the property. The finesse gives a feeling of opulence but remaining accessible.
Construction Like on cue, the constructor brought out the perfect dream of the architect. The curves, colour of the block and mortar give the building a powerful look and feel. One sees quality and class. From the look of different bits and pieces of the house put together like a pack of dominoes. Naguru Skyz looks serious, exclusive, and convenient.
Facilities Patrick Bitature, the proprietor of the hotel.
The Naguru Skyz hotel is designed as a world-class four-star hotel specifically created for business travelers and pleasure.
The hotel is designed as a world-class four-star hotel specifically created for business travelers and pleasure. The hotel vaunts of 14 boardrooms and two conference halls. In management’s admission, “each of the 141 bedrooms is premeditated to provide comfort, pleasure and experience”. Like any hotel of its standard, it has restaurants, bars, corporate meeting rooms and conference facilities. The rooftop terrace is an amazing venue for cocktail and social events. Featuring free Wi-Fi and an outdoor swimming pool, a terrace and views of the city, and guests can enjoy a meal at the restaurant or a drink at the bar. Naguru Skyz also boasts unique club floors, including accommodation, boardrooms and dining, designed to serve private business groups such as company retreats; offering such events as banquets, cocktail functions, luncheons, dinner, presentations, product launches and training sessions.
Front view of the Naguru Skyz hotel. Photos/Naguru Skyz Hotel
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17 March - April 2018
Lead Story
An office block in Kampala. Photo/ Spectrum Properties
The state of real estate In the past, heads of international organisations posted to Uganda stayed in hotels (specifically Sheraton Kampala hotel). That meant any organisation posting a high-profile staff to Uganda needed to be prepared to spend a little more money on welfare. That is not the case anymore because the amount and quality of private residential housing in Kampala has grown rapidly over the years, writes Jackie Asasira.
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f the government of Uganda wants to make the country an attractive investment destination, real estate must be an important part of the strategy. Real estate is a key infrastructure consideration for any investment and international engagements for any country. A country might have sufficient electricity, a good road network, good transport system, good internet connectivity and attractive investment
18 March - April 2018
policies, but if its real estate is underdeveloped, it will remain hard for that country to attract the high-end investment and international events. Real estate – residential, office, commercial, industrial and retail – is both an economic growth indicator, but also a magnet for investment. Ultimately, the quality and quantity of land and built space available determines decisions for investment, interna-
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Lead Story
tional office location, relocation of international staff and hosting key international events, all of which are generators of foreign exchange. The bottom line is that attractiveness of any country as a destination is highly dependent on the state of its real estate. Residential bungalows and apartments for international staff is a key factor in deciding whether a company would post a high-level manager to a country or not. In the past, heads of international organisations posted to Uganda stayed in hotels (specifically Sheraton Kampala hotel) for decent accommodation and security. That meant any organisation posting a high-level staff to Uganda needed to be prepared to spend a little more on their staff. As a result, it would be easier for such officials to operate from neighbouring cities like Nairobi or Addis Abba. That, of course, meant loss of foreign exchange for Uganda.
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Related to residential real estate is a host of facilities that make a destination a family endpoint. Such facilities include international schools, hospitality and entertainment places, and appropriate health facilities, among others. Availability of office space befitting the corporate image of international organisations is also vital. Many global companies and organisations have specific requirements and considerations for office space. Such organisations as the World Bank, the UN and global companies like Tullow Oil and Total have exquisite taste for office space because work environment is part of what they offer to get high returns from employees. Office space is also about corporate image. It is, therefore, unlikely that a global company would have a dingy space for its office. International meetings and conferences are another big revenue earner. Availability of prime conferencing accommodation is a key factor in deciding venues for specific international meetings. Hosting international conferences requires a country to have adequate, favourable conference spaces (meeting rooms with requisite facilities like translation services, etc.), enough international standard hotel rooms to cater for all guests, accessibility and logistical ease of running the conference, among others. Commercial and retail space is equally important. Commercial space like warehousing is critical for any company whose business is logistics intensive. Retail space, on the other hand, means the city has availability of shopping and provision of consumer goods such as clothing, food, drinks and entertainment, among others. Industrial real estate is the most important for intending investors. Big money investors tend to be attracted to countries that have well developed industrial infrastructure such as industrial parks which are well connected to electricity, water, internet, good road and rail network, among others. Emerging economies like Egypt, South Africa, Morocco and Kenya have industrial parks – pieces of real estate with all amenities meant to attract investors. Uganda is now moving in that direction by developing Namanve industrial park and others in Mukono, Mbale and Mbarara, among other towns.
Real estate – residential, office, commercial, industrial and retail – is both an economic growth indicator, but also a magnet for investment.
Property Mogul Sudhir Ruparelia
Residential housing Over the years, the amount and quality of private residential housing in Kampala befitting international standards has grown rapidly .
19 March - April 2018
Lead Story Unlike a few years ago, international workers are spoilt for choice because there are bungalows and apartments in prime areas of Kampala, which befit international standards. Staff of international organisations posted to Uganda can easily find good, secure and modern residential houses in Kololo, Nakasero, Bugolobi, Mbuya, Naguru, Buziga and Luzira, among other places in Kampala. Upcoming suburbs like Kiwatule, Naalya, Mutungo, Port Bell and Bunga equally have some pleasant properties. Even regional capitals like Mbarara, Mbale, Arua, Gulu and Jinja have some high-quality residential spaces. According to their latest real estate sector report (January-June 2017), Knight Frank, a leading real estate manager and consultant in Uganda, said there is a continued growing supply for high-end residential spaces in Kampala. “We have witnessed an increase in the supply of prime residential stock for rent on the market over the past 12 months. This supply is in the prime suburbs of Kololo, Nakasero Bugolobi and Naguru. Kololo and Nakasero are seeing increasing redevelopment of old residential plots of between 0.50 – 1.00 acres, in line with the zoning regulations of these locations. Most of these residential developments are two, three and four-bedroom apartments, all rooms ensuite, and some with a house help’s room. “Additionally, swimming pools, gyms, and children’s play areas have become standard facilities provided at new residential developments. There has been a noticeable increase in take up of residential apartments over the past six months. However, this is not purely new demand, but mainly from tenants whose tenancy agreements have expired and are moving to newer and more modern accommodation, at nearly the same or just slightly higher rentals. “Knight Frank is receiving increased enquiries for residential accommodation in the suburbs of Naguru, Mbuya and Bugolobi. The major drivers of this demand are coming from private organisations, corporate companies, oil and gas consultancies and other related services.” Due to the increasing availability of properties, prices are dropping. Knight Frank estimates high-end two to three-bedroom apartments with amenities like swimming pool, play area for children, etc. are going for between US$1,500 and US$4,000 per month. Such apartments would be more pricier in Juba and even Nairobi.
20 March - April 2018
An earial view of Namanve Industrial Park in Kampala.
Office space
Jolly Kaguhangire, Executive Director, Uganda Investment Authority
Demand for office space points to the level of business activity in a country. In their report, Knight Frank said there has been increased demand for office space year-over-year, as more space is being created. “During January-June 2017, we have noticed a slight increase in office take up for grade A/AB office space. …Our research registered an eight per cent increment year-over-year growth in occupancy rates for grade A/AB buildings in Kampala from 80 per cent registered in January-June 2016 to 88 per cent in January-June 2017.” The report further noted, “Approximately 16,000 metres of prime commercial grade A/AB office space has been leased (during the period) in Kampala. Office take up has been driven by enquiries, which rolled over from 2016, and is coming from government ministries, departments and agencies who are relocating to better quality space. “The oil and gas sector who are taking up some of the space they relinquished two years ago, professional services (lawyers, accountants etc), the medical/ pharmaceutical as well as insurance sectors all accounting for approximately 65 per cent who are moving from older buildings to more modern space.” Sophistication in the building is now a factor in clients’ choice.
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Lead Story Knight Frank said, in their report, the next big affair in retail space in Kampala is completion of the Arena mall in Nsambya, which is expected to bring on the market another 14,000m2 of retail space.
Industrial and logistics This is one of the fastest growing segments of real estate in the country. There is recorded interest from developers to add more space to provide for the increasing distribution channels, which are being pushed by consumer good manufactures. Longer, modern warehouses are being added on the old stock. Factories are being built with international standards and specification. The Kampala Industrial and Business Park in Namanve is taking shape. Industrialists like Roofings Ltd, Kyagulanyi Coffee, Nice House of Plastics, Steel & Tube, and Plascon Paints are some of the recent to set up factory in the industrial park. The area has 2,200 acres available for industrial development.
Regional trends “The comparative advantages for properties which are attracting tenants and/or maintaining high occupancy rates, are intelligent buildings which are energy efficient with adequate parking space, usually out of the core central business district, i.e. North East of Kampala road towards Yusuf Lule road, Kololo and Lugogo bypass. However, the on-going road network improvement by way of the Kampala Flyover Construction and Road Upgrading Project (KFCRUP) by UNRA will change the dynamics of the city immensely, with regards to accessibility and ease of movement. This will redefine the location parameters for commercial property developers and occupiers.” Prices for office space have stagnated with the A/AB properties going for US$15 per square metre, while the B/CD properties going for between US$8 and US$12.
Retail space Over the last one year, demand for retail space was subdued by the slow economy, hangover from the conflict in South Sudan and the Nakumatt effect. Nakumatt, the largest retailer in East Africa, encountered problems over the past few years, which forced them to close their stores in Uganda and other East African countries. Nakumatt had occupied some of the prime retail places in Kampala, Mbarara, Gulu and Mbale.
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Unlike countries like Kenya, Nigeria, Angola, Ghana that have attracted the big guns investors in real estate, Uganda’s investment in the sector continues to be from mainly local and regional financiers.
Setbacks to real estate development in Uganda
According to their latest real estate sector report (JanuaryJune 2017), Knight Frank, a leading real estate manager and consultant in Uganda, said there is a continued growing supply for high-end residential spaces in Kampala.
One of the biggest problems facing real estate in the country according to industry observers is inflated land prices especially in Kampala and surround areas. An acre of land in Kololo goes for about US$ 3 million, which is quite a price by regional standards. They also say that the sector is largely seen as where dirty money is “cleaned.” There therefore continue a looming fear that one day, prices will crash, occasioning loses to anyone who invests in current inflated prices. The other challenge is the continuously changing land laws and corruption, unpredictability that has hit the land sector. Already, some investors have lost money due to bogus investment deals, government officials cutting deals. All of these add up to dampen real high value investment in the sector. Relatively, Uganda’s market is also small, compared to Kenya, South Africa, and Nigeria. Coupled with the high bank interest rates and the volatility of the Uganda shilling, stifle the country’s attractiveness to international real estate investment.
21 March - April 2018
INTERVIEW
Captains of Industry
Need for a regulatory framework for budding real estate sector Arthur Mukembo, a real estate expert, is the regional director, RE/MAX Uganda. He is also a board member of the Association of Real Estate Agents of Uganda (AREA-U). The Infrastructure Magazine’s Martin Ariko sounded him out on various issues regarding the country’s budding real estate sector.
What do you think should be done to accelerate the growth of Uganda’s real estate sector? Uganda’s formal real estate sector is still in its infancy – there is a lot of opportunity and room to improve. Real estate – like oil & gas, Uganda Airlines, agriculture, infrastructure or banking – should be a major focus for government under the National Development Plan or other planning processes. In economies in Europe, North America and Asia, the growth of the housing sector is reported monthly at the national level as a key economic indicator because of its considerable impact on other sectors of the economy and the Gross Domestic Product (GDP). To appreciate the impact of real estate, you can recall that subprime mortgages in the United States of America; a primary contributor to the 2008 global financial crisis was activity in the real estate sector. There is need for reliable real estate sector insights and data such as on new housing stock by type and area of the country, new mortgage contracts and their average values in a given period, actual strike prices of transactions for comparison against asking prices, demand metrics and so on. Without reliable, comparable data to support decision-mak-
22 March - April 2018
Arthur Mukembo, Regional Director, RE/MAX Uganda
ing, project risk increases and this reduces quality, volume and scale of investment into and transactions within the sector. There is need to professionalize and regulate real estate agents/brokers. There has been a draft bill by the Ministry of Lands & Urban Development intended to regulate actors in the sector since around 2013. This
bill should be fast-tracked alongside the ongoing consideration of the Landlord Tenants bill. We need reliable sanctity of title. As a sector player, I hope the ongoing Commission of Inquiry into Land Matters yields real, considered, extensive and effective recommendations that will be duly implemented
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INTERVIEW with the same vigor as the commission’s activities. Generally, there is need for either a statutory authority or semi-autonomous professional standards body similar to the Law Council or Nurses and Midwives Council, dedicated to regulating the conduct of built environment professionals such as real estate agents, architects, contractors and engineers, and to creating enabling policies and regulations to drive sustainable development of the sector. What is the contribution of real estate to Uganda’s economic growth? To put it in context, the Uganda National Housing Policy estimates the contribution of the real estate sector to be about five per cent of the GDP. The Uganda Revenue Authority estimates Rental Income Tax contributed about 0.3 per cent of Uganda’s GDP in the last financial year. However, even with these guiding figures, the multiplier effect of real estate developments reverberate across multiple sectors and so are difficult to quantify accurately. For example, a single real estate development consumes construction services, construction materials, utilities, casual laborers, skilled professional services such as architects and engineers, occupiers, credit from financial instructions, infrastructure, transportation, and so on – how do you reliably measure all this impact? Real estate is a major direct and indirect contributor to the country’s GDP and should be a key focus area for the planning authorities. Do you agree with some market observers who suggest that there is an emerging trend of property acquisition in this country, where Ugandans prefer to buy completed properties rather than build by themselves? Given income levels, cultural context and other restraints, most households in Uganda start out by renting. Subsequently, they
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purchase parcels of land and then develop derive better value from land in highly urbanized areas, such as the Greater Kampathem overtime in what is referred to as “Incremental Housing”. la Area, by optimizing land use. This can be We are seeing overtime, however, esachieved using a range of strategies such pecially following the introduction of the as introducing variety in what you sell – Condominium Property Act of 2001, an offer a mix of serviced lots, apartments increase in the supply of Site and Service townhouses and so on; building vertically; increasing a structure’s footprint on a schemes such as those by Akright and Jomayi, among others, and in master planned given piece of land; and building in accordance with the master plan for the area developments that incorporate apartments, in which your site is located. These factors townhouses and villas such as the Royal contribute to why you may be observing Palms estate in Butabika and Venus enclave smaller plots and to why multi-storey in Najjera. structures are increasing in supply espeWe observe, however, that regardless cially in urban centers like the Greater of whether homeowners buy or build for Kampala Area. themselves, income levels, cultural context, infrastructure, construction cost, and cost Briefly tell our readers of housing finance remain major impediments to sustained who RE/MAX Uganda is growth in effective demand RE/MAX Uganda is part of for formal housing options. Real estate – the global RE/MAX network There are simply not enough like oil & gas, of over 120,000 real estate prospective homeowners with Uganda Airlines professionals in 7,500 offica combination of desire and – should be a es, in more than 100 counability to purchase or construct major focus for tries and territories. RE/MAX in a single phase, today. government Uganda offers consultancy We are innovating alongunder the side our clients, especially fisolutions in valuation, land National nancial institutions and develsurveying, property manageDevelopment opers, and with intermediaries ment and transaction support Plan such as members of AREA-U, for residential and commercial real estate. to reduce lending and project risk to bring down cost of Specifically what kind of project and housing finance, real estate business do you ultimately. deal in? Would you say that on average, the We advise financial institutions, propsize of land Ugandan homes are built on erty developers, organizations and inditoday is smaller, compared to the past? viduals. Our advice cuts across the real esI do not think plots are becoming smaller. tate value chain from property acquisition Instead, as you would expect, given rising through to project conception, raising financing, construction, transactions and at cost of land, property owners looking to sell occupancy stage. We support our clients their land have to adapt to market forces by and partners in undertaking market studoffering products that prospective buyers ies, assessing the value of assets, putting have the ability to purchase. One way of together project concepts and consultant doing this is by subdividing a large parcel of teams, monitoring of construction work land into smaller theoretically more affordable parcels for punters to purchase. in progress, and eventually, managing the Another factor is densification. You built-up asset, among others.
23 March - April 2018
Regulation
Will the proposed Landlord & Tenant Bill stifle real estate development? By Jackie Asasira
If passed in its current form, the proposed Landlord and Tenant Bill2018, due to be tabled in the parliament, would stifle development of real estate in a country that has a housing shortage of nearly two million units, legal experts say. But government argues that the law is intended to create a workable framework to manage the often dicey relations between property owners and tenants, an issue that has of recent led to spats between the two groups.
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oreen Nawaali, an advocate with MMAKS, a leading law firm in Kampala said that while the spirit of the proposed law may be good in easing settlement of disputes between property owners and tenants, some of its clauses and their loose framing could make the law toxic to real estate development in the country. In a note availed to The Infrastructure Magazine, Nawaali said, “Uganda has a housing deficit of approximately 1.7 million housing units… Kampala alone has a housing deficit of 550,000 units. It is with the private sector that the country places its hope to bridge this deficit,” she wrote. “However, the draft bill can only have a dampening effect on the private sector efforts to bridge the deficit.” The draft bill seeks to regulate the relationship between property owners and tenants and to repeal two old laws: the Distress for Rent (Bailiffs) Act (Cap 76) and the Rent Restriction Act (Cap 231). Under these two old laws, the property owner wielded powers to forcefully evict tenants or take any action to recover rent arrears, including confiscating tenants’ property. Chris Baryomunsi, state minister for Housing, recently told journalists in Kampala that the proposed law would define roles and obligations of property owners and those of tenants in conducting rent-related transactions. He said the bill also proposes alternative dispute resolution mechanisms, which should result in reduction of forceful evictions and destruction of lives and property. Baryomunsi argued that rather than dampen interest in real estate development by investors, the law should actually stimulate more interest in
24 March - April 2018
the sector. The proposed law, he said, provides “a conducive environment for investors to increase on the housing units, which, in turn, will lead to a reduction in the housing backlog and increase security of tenure for occupants, leading to in-
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Regulation
creased economic investment in the housing sector in Uganda.� Nawaali, however, says there are some critical elements that are potentially offensive in the bill. Firstly, the proposed law provides that rent should be charged and paid exclusively in Uganda Shillings, unless otherwise provided under any law. Nawaali however argued that this clause is in fact not practical as the Bank of Uganda Act (Cap 51) permits transactions in the country to be in other currencies other than the Uganda Shilling, which renderes this proposed provision ineffectual
The significance of this clause is that it affects investors who otherwise borrow from both local and foreign markets in dollars to invest in real estate, in a country where the exchange rate
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between the dollar and the local shilling is very volatile. The second contentious provision is that the bill proposed to hand down powers to the minister (in charge housing) to cap rental increases – currently proposed at six per cent annually, or such other percentage as deemed by the minister. It also proposes that rent shall not be increased within the first twelve months of tenancy, and should not exceed 10 per cent. Both these provisions disempower property investors in determining returns on their investment. Thirdly, the proposed law seeks to restrict rent payable in advance to three months, unless a tenant opts otherwise. Many corporate tenants pay even several years in advance, which has been advantageous to clients especially with active loans to service. Fourthly and probably more importantly to many property owners, the draft bill seeks to abolish the remedy of distress for rent. If a tenant fails to pay rent and is in arrears, the new law prohibits the property owner from locking the premises and summarily evicting the tenant, and requires the property owner to apply to court to recover the rent. It abolishes the remedy distress for rent. The daft law also requires the property owner to pay for all initial installation costs and charges for electricity, water, gas or oil supply and all utility charges that are not separately metered. Regulation of relations between property owners and tenants is a hot potato anywhere in the world. Developed countries like Australia, Germany, Ireland, UK and USA have had their fair share of this debate. The argument is always that in this relationship, tenants are more vulnerable and needing legal protection. But any attempt to put regulation that protects tenants dampens the appetite and soils the atmosphere to invest in real estate, leading to slow development of living and office spaces. In Australia, introduction of stringent laws protecting the tenants had courted speculation that it would remove incentive in investment in real estate. However, a study by the Australian Housing and Urban Research Institute (AHURI) showed no such dampening effect occurred.
Chris Baryomunsi, State minister for Housing
The draft bill seeks to regulate the relationship between property owners and tenants and to repeal two old laws: the Distress for Rent (Bailiffs) Act (Cap 76) and the Rent Restriction Act (Cap 231).
25 March - April 2018
Feature
Putting sand mining into perspective Although sand mining in Uganda has largely been framed as an environmental degradation problem, recent international reports show there is more than meets the eye. It touches on the global problem of pilfering of resources, exploiting and cheating local communities, and dubious dealings of a highly demanded resource that is showing a looming global scarcity. International observers are now calling for worldwide measures to regulate sand mining in different parts of the world, writes Daniel Otto.
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uring his youthful days in the 1970s and early 1980s, Zavio Ssendi (names changed to protect identity) knew his village was rich in sand. He told this writer that it was custom for young people to go down the swamp to dig up a few heaps of clear white sand. Building contractors from Masaka town would buy the sand for construction works in the town. For many years, sand mining remained an artisanal activity from which Ssendi and his ilk, earned an extra buck- their main economic activity being farming. “Today, it is not the same again. Everything has changed,� Ssendi told The Infrastructure Magazine.
26 March - April 2018
Sand mining in a Moroccan coast. Photo/ Coastal Care
Although Ssendi lives in the same village, the sand in Kamuwunga, Kyamulibwa parish, Bukulula sub-county in now Kalungu district (previously Masaka) does no longer belong to the locals but a Chinese company. Unlike then when they used basic hand tools like pickaxes, spades and hoes to dig up the sand, today some big earth-moving machinery does the mining. Excavators dig up hundreds of tonnes of sand per day, which is transported by huge Lorries. Ssendi’s is not the only affected village. According to the National Environment Authority (NEMA), areas around Lake Victoria in the districts of Mukono, Buikwe, Kampala, Wakiso, Mpigi, Masaka, Kalungu, Iganga, among others, have been invaded by unknown sand miners of both local and foreign origins.
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Feature
Acknowledging the wide-spreading sand mining especially on and around the shores of Lake Victoria, the national environmental watchdog recently said, in a February 2018 report, that Lwera is the most affected. “The Lake Victoria basin is endowed with alluvial depositions that contain sand, which is highly sought by the construction industry… The deposits of sand in the basin are deeper in the west, especially around Lwera and Bukatata. It is, therefore, not surprising that out of all permitted sand mining projects, over 80 per cent of them are based in the west of the Lake Victoria basin, wholly in Lwera,” the report says in part. The NEMA report added: “In Lwera, commercial sand mines are recent, and their emergence over the years is wholly attributed to a growing demand for clean sand. The situation now contrasts the olden days when sand was mined using local tools, such as, hoes and spades. During that time, large scale mining in Uganda was limited to Bukakata, in the 1960s, where sand was mined to support glass making by the East African Glass Works Limited.” In 2016, sand mining became a national issue when an MP from Kalungu raised it on the floor of the House. This prompted Speaker Rebecca Kadaga to ask the Parliamentary Committee on Natural Resources to investigate the matter and establish the role of foreign companies, extent of the mining and the affected areas. This was the first time sand mining became a matter of parliamentary debate.
Global sand crisis/ scarcity A report published in the famed journal Science in September last year titled “The Looming Crisis of the Sand Commons” argued that after water, sand is the most used material in the world, and its stocks are fast depleting. “Between 1900 and 2010,” the report said, “the global volume of natural resources used in buildings and transport infrastructure increased 23-fold. Sand and gravel are the largest portion of these primary material inputs (79 per cent or 28.6 gigatons per year by 2010) and are the most extracted group of materials worldwide, exceeding fossil fuels and biomass. “Skyrocketing demand, combined with unfettered mining to meet it, is creating the perfect recipe for shortages. Plentiful evidence strongly suggests that sand is becoming increasingly scarce in many
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Sam Cheptoris, Minister of Water and Environment
Tom Okurut, Executive Director, NEMA
regions. For example, in Vietnam domestic demand for sand exceeds the country’s total reserves. If this mismatch continues, the country may run out of construction sand by 2020, according to recent statements from the country’s Ministry of Construction.” In February 2017, UK’s the Guardian newspaper in an article entitled “Sand mining: The global environmental crisis you have probably never heard of”, reported that the current demand for sand globally in insatiable. China alone consumes millions of tonnes of the material, and its own stocks fast running out. “The demand is voracious. The global urbanisation boom is devouring colossal amounts of sand – the key ingredient of concrete and asphalt. Shanghai, China’s financial centre, has exploded in the last 20 years. The city has added seven million new residents since 2000, raising its population to more than 23 million. In the last decade, Shanghai has built more high-rises than there are in all of New York City, as well as countless miles of roads and other infrastructure.” The Guardian said the main driver of this (sand) crisis is “our era’s unprecedented urban growth. Cities are expanding at a pace and on a scale far greater than at any time in human history. The number of people living in urban areas has more than quadrupled since 1950, to about four billion today. More than half of the world’s people now live in cities – with another 2.5 billion to come in the next three decades, according to the UN”. A survey by The Infrastructure Magazine shows that within Africa, Zanzibar, mainland Tanzania, Kenya (southern coast), Ghana, Liberia and South Africa are some of the countries whose coastlines have been invaded by illegal sand mining, in some instances connected to foreign miners. Science journal reported: “In most regions, sand is a common-pool resource, a resource that is open to all because access can be limited only at high cost. Because of the difficulty in regulating their consumption, common-pool resources are prone to tragedies of the commons as people may selfishly extract them without considering long-term consequences, eventually leading to overexploitation or degradation. Even when sand mining is regulated, it is often subject to rampant illegal extraction and trade. As a result, sand scarcity is an emerging issue with major socio political, economic, and environmental implications.”
27 March - April 2018
Feature
In the case of Uganda, over the last five years or so, sand mining hitherto a neglected artisanal activity has attracted a lot of attention, mostly from the media and politicians. The reason for this is that there has been a heightened number of big local and foreign interests and companies that have gone into sand mining. Attention has also been fuelled by suspicion and general lack of information of where the sand mined from different areas in Uganda goes. This situation is even worsened by the lack of national regulations and laws that govern sand mining in the country. Sand mining around Lake Victoria has, in the recent past, sucked in and pitied Wakiso Local Government chairperson Matia Lwanga Bwanika against his councillors – Bwanika fighting off Chinese miners, while some council members favouring sand extraction as revenue-generating activity for the district.
Dubious deals and profiteering What is heightening temperatures in Uganda’s sand mining business is suspicions on the perceived dubious deals around it. Many Ugandans seem to believe there is a racket of businesspeople exploiting the country’s sand and selling it to foreign companies. In February 2017, Naome Karekaho, the NEMA spokesperson told Daily Monitor that one of the leading sand mining Chinese companies on Lake Victoria, the Mango Tree Group, was in fact licensed to build ships on the lake, but it was instead more extensively involved in sand mining. The Science Journal article, authors argued, “Profits from sand mining frequently spur profiteering. In response to rampant violence stemming from competition for sand, the government of Hong Kong established a state monopoly over sand mining and trade in the early 1900s that lasted until 1981”. Although The Infrastructure Magazine could not independently confirm this, recent local press reports indicated that some
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of the sand mined around Lake Victoria is sold to glass manufacturers in Dubai and to construction projects in as far as China and Singapore. At the international level, it has been reported that organized crime groups in India, Italy and elsewhere conduct illegal trade in soil and sand. Singapore’s high-volume sand imports have drawn it into dispute with Indonesia, Malaysia and Cambodia. There are many yet unconfirmed reports that Chinese, Israelis, and others spirit soil and sand out of African countries for use in their own countries. Seemingly dubious dealings like those have caused some political waves in Uganda as well, as was the case in Wakiso district. This situation is even worsened by the country’s poor capacity of recordkeeping and some government officials who just look the other way as sand is being mined unregulated. Uganda has no record of how much sand is being extracted annually. There is no satisfactory account of where the sand ends – whether it is exported as alleged, or it is sold and used locally for the big infrastructure projects currently going on.
Poor regulation In Uganda like elsewhere in the world, a lot of attention has been paid to pricier extractives like gold, diamonds, oil and gas. However, media coverage of sand mining is growing but the magnitude of the problem remains unfathomed. The Journal Science argued that thanks to work by organizations such as the United Nations Environment Programme, there is increasing global attention, but the scale of the problem is not widely appreciated. “Despite huge demand,” they said, “sand sustainability is rarely addressed in scientific research and policy forums. The complexity of this problem is doubtlessly a factor. Sand is a common-pool resource – open to all, easy to get and hard to regulate. As a result, we know little about the true global costs of sand mining and consumption.” “As long as national regulations are non-existent or lightly enforced, harmful ef-
An excavator loading sand. Photo/ Ruhweza Transportation & Construction.
fects will continue to occur. We believe that the international community needs to develop a global strategy for sand governance, along with global and regional sand budgets. It is time to treat sand like a resource, on a par with clean air, biodiversity and other natural endowments that nations seek to manage for the future,” Science argues.
Impact of unregulated mining While government still struggles with fact-finding and regulation, the damage is being done. In Uganda, NEMA acknowledges the extent of the damage. “With mining come impacts… A traditional fishing village, Kamaliba, which is surrounded by three mining companies, has been ravaged by the activities of these miners. The village has lost shelter, toilets, access roads, recreation land and land for cultivation, as some of the developers have expanded their mines beyond the permitted boundaries. Further, land which was originally used for grazing and cultivation has been reduced to pits and ponds that are a threat to humans and cattle, let alone being unsuitable for cultivation.” NEMA also said local communities have
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Feature
Uses of sand
not benefitted from the trade, save for the casual jobs which fetch pittance. They also warned of the danger of silicosis, a disease associated with the inhalation of silica dust and the hidden impact on the roads sector, which is rarely discussed, among others. “The open pits resulting from sand mining are a habitat for disease-carrying vectors such as mosquitoes. They are also habitats for invasive aquatic plants like the water hyacinth and Kariba weed. The former plagued Lake Victoria almost two decades ago and was contained, but its re-emergence in areas close to the lake is worrying. The latter is a fast-growing plant, known to double in volume every 2-3 days. It has a thick mat (~10-20 cm) over water and, therefore, has the ability to lower light penetration and reduces gas exchange between water and the atmosphere above. “The overall effect of both is to deoxygenate the water. But also, the short lifecycle of Kariba weed means it contributes large masses of organic matter, which, in turn, result in a further reduction in oxygen as more of it is demanded to drive the decomposition process. Because of this, it is a threat to the fishing industry. Moreover, the foul smell associated with its decomposition deters any recreation activities wherever it establishes.”
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Award-winning documentary maker, Denis Delestrac, in his 2013 documentary Sand Wars, quipped: “Sand is the second most consumed natural resource, after water. The construction/building industry is by far the largest consumer of this finite resource. The traditional building of one average-sized house requires 200 tons of sand; a hospital requires 3,000 tons of sand; each kilometer of highway built requires 30,000 tons of sand… A nuclear plant, a staggering 12 million tons of sand…” Dr Daniel Franks, chief technical advisor and programme manager, ACP-EU Development Minerals Programme, which is implemented in partnership with UNDP, recently wrote in the UNDP Perspectives: “With metal prices down, industrial minerals, construction materials, dimension stones and semi-precious stones may play a greater role in African development. The ACP-EU Development Minerals Programme, with the support of the Africa Union Commission and African Minerals Development Centre, are aiming to turn the greater attention afforded to these neglected development minerals into better management, and ultimately human development outcomes for Africa.” Uganda is one of the countries where the
ACP-EU Development Mineral Programme is being implemented. Recent baseline reports released by the programme analysed the value chains of sand among others. Sources told this Magazine that the programme is currently working to improve skills for sustainable sand mining, value addition and market opportunities. Once hopes that interventions like this, will bring solutions to lives of the likes of Zaverio Ssendi who now have to contend with the destruction of their environment, live in even worsening biting poverty and continue watching as sand in their village continues to be spirited away, The World Economic Forum, arguably the world biggest forum that brings together privates sector, government and non-government sectors, recently wrote: “In our view, it is essential to understand what happens at the places where sand is mined, where it is used and many impacted points in between in order to craft workable policies. We are analyzing those questions through a systems integration approach that allows us to better understand socioeconomic and environmental interactions over distances and time. Based on what we have already learned, we believe it is time to develop international conventions to regulate sand mining, use and trade.”
Sand mining on the shores of Lake Victoria in Kawuku, Wakiso district. Photo/ Parliament Watch
29 March - April 2018
Opinion
Public Private Partnership: The Achilles heel Many governments in the developing world are looking to Public Private Partnerships (PPP) as a mode of getting infrastructure in place, without governments necessarily having to finance it, by tapping into resources available or that could potentially be raised by the private sector. The construction of the proposed Kampala-Jinja expressway is one of the projects government has considered for PPP arrangement to finance. In this article, RICARDO HAUSMANN argues that both public financing and PPP have their challenges and opportunities that any country needs to deliberately deal with to get the best out of them.
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s an old tale has it, there once was a competition between two pianists. After listening to the first pianist, the jury awarded the prize to the second. There was no need to listen further, because who could possibly be worse? The same logic may seem to apply to PPPs to provide infrastructure such as roads, power, water, airports, or development of major tourist areas. In fact, listening to both contestants, and assessing their strengths and weaknesses, is essential. The first pianist is public provision, which faces two challenges: an incentive (or corruption) problem and a budget problem. The incentive problem stems from the fact that when governments procure a road project, the winning contractor may cut corners, because he gets to pocket the savings. He might even share those savings with the government officials supervising the contract. The budget problem stems from the fact that there is only so much that a government can safely borrow, because it will have to raise future taxes to repay the debt. Consequently, many worthwhile projects must be postponed. In comes the second pianist. Suppose the project is a highway structured as a toll road with a 20-year concession. This seems to solve both the incentive and budget problem. The contractor will be responsible for the increased maintenance cost if he cuts corners at the time of construction, presumably making him more likely to do high-quality work. He also would have an incentive to run an efficient operation, because he gets to keep the savings. In addition, because the project is financed by tolls, it need not be limited by fiscal constraints. Liberating a project from budgetary and public debt constraints can work wonders. Some 73 per cent of Liberia’s citizens have cell phones, but only 9.1
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Ricardo Hausmann
The first challenge a project must address is whether it is a good idea. Answering this question requires an appraisal or pre-investment process that can be very expensive, and the outcome may be no better than a good guess, leaving many uncertainties.
per cent have electricity. This is because energy infrastructure is financed mainly with budgetary resources, whereas cellular telephony is provided privately. When projects are structured so that beneficiaries pay for them through service fees, markets can deliver them. When budgetary resources are needed, things move more slowly. So it would seem the second pianist wins. But life is more complicated than the story, owing to the problems that may arise over the course of a project. The first challenge a project must address is whether it is a good idea. Answering this question requires an appraisal or pre-investment process that can be very expensive, and the outcome may be no better than a good guess, leaving many uncertainties. For example, in the early phase of a highway project, the geology relevant for road design and construction, the amount of future traffic, the environmental impact, and the public response are unknown or only partly known. Most developing countries I know spend too little money devising good projects. When the private sector does, transforming ideas into bankable projects is often very difficult because many difficult-to-coordinate public-sector decisions or actions are involved. So let us assume that a toll road project is approved, a concession contract is prepared, and companies bid on it. The bidders need to plan for two phases: engineering, procurement, and construction (EPC), and a longer phase of operation when toll revenue is collected to recover incurred costs and expected returns. There are plenty of uncertainties in both phases, but especially during EPC, which may last 3-7 years, depending on the project. Given the risks in this phase, capital markets demand that it be financed
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Opinion with more equity than debt and have an expected internal rate of return that often reaches 18 per cent or higher. When construction is completed and the road put into operation, the lower risks and stable cash flows allow for more debt financing by a different set of more conservative investors, such as pension funds, which expect returns of 5-7 per cent, allowing the initial investors to cash out. So, the project involves quite sophisticated financial engineering. Almost always, such plans cannot be realized unless government provides guarantees against geological or traffic risks. Negotiating such agreements often adds four years to the project – to get to the so-called financial closing – before any physical work is done. In addition, there are so many details to be negotiated and supervised that opportunities for malfeasance by government officials abound. This means that neither the incentive/corruption problems nor the budget/public-debt problems that the second pianist was supposed to eliminate actually go away. It also means that there are good reasons why privately financed projects become significantly more expensive, given the higher cost of capital, and why completing them can be much, much slower. Moreover, the second pianist does not do away with the need for a capable and honest state, able to design and manage such complex projects. But this may not be the best way to deploy government capacity. An alternative is to concentrate the role of the private sector in the latter phases of the project.
The best option may be for government to build the road and sell the concession for operation and maintenance. This allows government to cash out and reinvest the resources in pre-investment and EPC; thus, recycling scarce public capital more quickly while cutting out the most expensive and slowest parts of private involvement. For other projects, such as the development of major tourism areas, government must incur significant pre-investment and public infrastructure costs if it is to make them bankable. Recovering these costs would require participating in the project or co-investing with the private sector through some financial vehicle that also manages the project on behalf of the government. This requires institutional capabilities that many countries do not have and that the development community has not fostered. But these capabilities could make a very large difference. That is why Albania’s government, with the help of Harvard’s Center for International Development (which I direct), is planning to create the necessary investment vehicle. Given the stakes, the many challenges and difficulties ahead will be worth it. As the pianists would say: stay tuned! Ricardo Hausmann is the director of the Center for International Development at Harvard University and a professor of economics at the Harvard Kennedy School. He is a former minister of Planning of Venezuela and former Chief Economist of the Inter-American Development Bank. Source: Project-Syndicate
The new Nile bridge in Jinja. Photo/ PPU
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31 March - April 2018
Innovation
Spouts Purifaaya – An innovative technology for clean drinking water By Jacob Okwii
Innovations such as the Spouts of Water technology- the Purifaaya/Filter- is timely for Uganda in the management of water for safe consumption. Kathy Ku, together with her Harvard University colleague, John Kye, originated the purifaaya and initiated it in Uganda by. Ku was an intern student in Uganda in 2010 at the time working in reproductive health issues among women. Then it occurred to her that access to clean drinking water was a real problem among especially rural communities in Uganda.
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pouts set to provide a sustainable solution to Uganda’s safe water needs by providing an innovative, effective, convenient, cheap and sustainable water filter. The purifaaya is made from naturally occurring local raw materials that make ceramic filters, namely; clay, sawdust and grog (broken potter used as filler). These different elements are crushed together and ground into a fine powder. Water is then added to form a soft clay, which is turned into blocks to be pressed into filters. Pressed filters receive touchups to smooth imperfections and are fired in the kilns. They are then left to dry for 4-6 weeks. Filter blocks are thereafter painted with silver nitrate. They are then fitted with locally made plastic buckets to complete the filter. Each filter is tested for safety before it is dispatched to the market. This process of production ensures that the microscopic holes in the filter removes bacteria from water with the silver nitrate coating ensuring that water stays pure. Inside it, the microscopic holes allow purified water to pass through to the container under the purifaaya. The foreign bodies are trapped on top of the purifaaya because the microscopic holes do not allow the bacterial germs to pass through them since germs have bigger volumes than clean water. The water is then safe and clean ready for drinking. Rebecca Liebschutz the sales and marketing director Spouts of Water told The Infrastructure Magazine that the filter could take 2 to 3 years as long as the purifaaya
32 March - April 2018
Miss Earth UG drinks from the Purifaaya
Clay from which the Purifaaya is made. Photo/ Spouts of Water
is cleaned every two weeks with clean and smooth cloth. The technology has a semi-translucent bucket that allows easy monitoring of water levels to avoid contact and recontamination between the clean water at the bottom of clean water and the germs trapped on the purifaaya. Liebschutz said the tech-
nology could be used in homes, schools and hospitals. Currently a number of non-governmental organisations are collaborating with Spouts in delivering the water filters to refugee settlements, as a way of ensuring clean water access by refugees, thereby preventing a host of diseases from unclean water. Liebschutz said the technology is proven to be at 99.9 percent effective by the ministry of Water and Environment. Its filter is designed with the “consumer-in mind” to ensure low maintenance, affordability and enjoyable taste of drinking water. Spouts first built its factory in Ngero in Kumi district and in 2014, it shifted to Nakawuka in Wakiso district, with now production capacity of 2000 filters manufactured per month.
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Advertiser's Profile
Uganda’s oldest building conglomerate, expands tentacles to other sectors In 1965, three years after Uganda had attained independence from Britain, and when the country’s immediate post-independence aspirations abounded, Manzur Alam, a Ugandan of Indian extraction started a company called Steel Windows Ltd. The mission of that company was to feed the budding post-independence building market with metal construction materials. Steel Windows Ltd made metallic doors, windows, louvres, shop front, slotted angles, hacksaw blades, wire ropes, welding rods, fencings, steel trunks, and all kinds of furniture and steel pipes. Two years later in 1967, Steel Windows Ltd was renamed Casements Africa Ltd.
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ince then Casements Africa Ltd has not looked back and has been a household name in steel and metal (and later aluminum) in building and construction in Uganda and East Africa. Casements is today one of the major players in the aluminium and steel fabrication in Uganda. The company supplies aluminum windows, doors, curtain walling, shop-fronts, etc. Almost all landmark buildings in Uganda have Casements products installed on them. Today, the company’s handiwork can be seen in many of Kampala’s quality buildings- including Course View Towers on Yusuf Lule Road, Royal Palm homes in Butabika, Office of the Auditor General on Apollo Kaggwa Road in central Kampala, Nakawa House in Nakawa, Nation-
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Abid Alam, Group Managing Director
al Housing & Construction Corporation flats in Bugolobi, among many others. Casements Africa Ltd is now ISO 9001: 2008 Certified, a mark of quality, credi-
bility, reliability and consistency. Starting out in 1965, the young Alam had no idea he was planting a seed for a company that would become one of Uganda’s biggest construction, building and mechanical industry biggest indigenous conglomerates. Today, 50 years down the road, Alam Group has grown to 16 companies in building & construction, real estate, manufacturing, tourism & hospitality, agriculture and supply of equipment. Today, Alam Group of Companies employs over 1,200 people who are well trainedcontributing to the country’s human capital development. Alam Group is also one of the biggest taxpayers in the country, thereby contributing to the development of the economy.
33 March - April 2018
Advertiser's Profile
Smart Roofing Solutions in Uganda
By Our Reporter
Re-design your old roof with Onduline Sheets and still achieve a great look.
Quality Roofing Sheets.
Ertec Holdings provides Onduline high-quality roofing materials
Ertec Holdings is the franchise distributor of Onduline products in Uganda and South Sudan. They manufacture a wide variety of concrete products such as interlocking blocks and pavers. Onduline is the world’s largest producer of green quality lightweight roofing materials that include onduline sheets, onduvilla tiles, onduclair sheets (transparent sheets). Onduline’s motto is: Simplicity, Reliability and Commitment.
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nduline has 12 factories in different parts of the world, mainly in Europe. It has received numerous trade and environmental certifications for its products. Onduline products have an advantage because they are green products (with a carbon footprint is 4kg eq co2/m2), Asbestos free, provide over roofing, thermal insulation, sound insulation (up to 28 decibel), water proof (with a 10-year guarantee) and double embossment technology. Further, the material is guage 3mm thick, colour is in built in the sheet, flexible (bend upto 5°), product attains rigidity after installation, is light weight (+-4kg per sqm), -lifetime guarantee against rust & corrosion,-Nailing (both universal screws & monoblock nails).
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Mathew Lule, the company’s CEO, told The Infrastructure Magazine: “As Ertec Holdings, we are committed to making sure that we give our customers a roof that is
of high quality, yet cost effective and safe. Should you require affordable houses, together with our partners, we shall provide you a turnkey solution.”
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Advertiser's Profile
Tembo Steel: Feeding industry & construction with high-quality steel products Tembo Steel Uganda Ltd (TSUL) is one of Uganda’s major producers of reliable steel products that feed the country’s industrial and construction sectors. An ISO 9002 certified company, TSUL manufactures hot and cold rolled profiles.
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ccording to Sanjay Awasthi, the TSUL chairman/chief executive officer, the company produces wide flat products and a whole range of long products – a portfolio that caters to markets across the steel value chain. TSUL operates a sponge iron plant in Iganga, eastern Uganda, where it has an installed capacity of two million tons per annum. It also operates a structure mill and a strip mill in the same location where it has a three-million-ton-per-annum wire rod mill and a three-million-ton-per-annum bar mill capacity in Lugazi. The company is the only one in East Africa that produces 5.0 mm wire rods, 0.8 mm hot rolled sheet, structures/section
through direct rolling. It also has capacity to produce various grades of stainless steels, liquid mild steel/low carbon steel from Liquid Cast Iron, and welding electrodes through integrated steel process Awasthi told The Infrastructure Magazine that the company is founded on strong ideals like innovation and technological leadership, and is backed by a highly driven, dedicated efficient and dynamic workforce of 3, 000 people. Awasthi said the company supports Uganda’s industrial drive through providing essential steel to infrastructural development, creates employment, and contributes to the national coffers through taxes, among other ways.
The company has won several awards for its innovative business and social practices in which it supports infrastructure development, education, health, water, sanitation and environment conservation, among other causes in the communities it operates. Apart from contributing to Uganda’s growth story, Awasthi said, TSUL is driving an ambitious global expansion plan with its sights set on emerging as a leading transnational business group in the region. The company continues to capitalize on opportunities in high growth markets, expanding its core areas and diversifying into new businesses.
Angles
Hollow sections
Flat bar
Tmt gold
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Binding wires
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Nails
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35 March - April 2018
Advertiser's Profile
Pramukh produces some of East Africa’s best steel Pramukh Steel Ltd was established in 2007. Since then, it has grown to one of the most reliable steel manufacturing companies in Uganda and East Africa. It currently has an annual steel production capacity of over 80,000 metric tons per annum (mtpa). The company supplies steel products in Kenya, Rwanda, Democratic Republic of Congo, Burundi, South Sudan and Uganda.
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ramukh Steel Limited’s initial investment value was US$ 5 million at establishment, but has continually grown and reached US$ 20 million. The company produces TMT ribbed bars, TMT round bars, square twisted bars, and square bars for use in construction of domestic and industrial structures. Pramukh Steel Ltd is situated about 2kms from Njeru town council on Kayunga road, occupying 35 acres of land. Having been certified basing on local
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and international standards, the company strives to attain high standards by continuously producing high-quality materials. Pramukh’s vision is to become a leading company in the construction industry of Uganda and East Africa. Pramukh Steel Limited is ISO 9001:2008 certified and applies a Quality Management System as a tool in achieving best practical outcomes across the organization.
Regional and global scope The company has a diverse and highly skilled workforce of approximately 700 employees. It also has a marketing network supported by retail outlets in the Great Lakes region. It boasts high precision machines and a state of the art laboratory; with technologies yielding high-quality steel products.
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“If you want to understand how a lion hunts, don’t go to the zoo. Go to the jungle”– JIM STENGEL
That is why if you are in the infrastructure business:
Construction materials & equipment manufacture & supply, construction & civil works, Energy, water & sanitation, oil & gas, engineering & architecture consulting, housing, real estate, Telecoms, ICT, transportation & logistics…..
EES
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