Breaking

SGR Cites Loopholes in DFCU Bank, Kasoli Community Loan Facility

Eng. Wamburu, argued that the land on which the Kasoli Housing project sits is government land that was used as security to obtain a credit facility from DFCU Bank Ltd and that under the Public Finance and Management Act 2015, there was a need to obtain a no-objection from the Ministry of Finance to guarantee the mortgage using a government asset.
Parliament of Uganda

Audio 3

Officials from the Ministry of Works and Transport have cited inconsistencies in the DFCU Bank and Kasoli Community loan facility. 

Eng. Canon Perez Wamburu the SGR Project Coordinator and his deputy Eng. Emmanuel Ssemakula appeared before Parliament’s committee of Physical Infrastructure on Thursday to explain the delayed compensation of 250 families in Tororo for land that they used as collateral to secure a loan from DFCU Bank.

The residents under the Kasoli Tenants SACCO Ltd recently petitioned parliament to help halt the ongoing eviction orders and force SGR to either compensate the residents so that they pay back DFCU or Government writes a letter of commitment that they would pay off the loan.

These acquired a loan in 2013 to construct 250 housing units under the Kasoli Housing Project on 5.5 hectares of land. However, they stopped financing a 2.5 billion Shillings loan facility after receiving a letter from the Standard Gauge Railway (SGR) informing them of an intention to acquire the same land to construct a railway line. 

Information before the committee indicates that the residents expected the government, through the SGR project, to compensate them for the land and in turn, pay off the bank loan.

But the compensation has never materialized, and they are now facing an impending eviction from the land, by the Bank. SGR on March 1, 2016, wrote to the residents informing them of their intention to acquire land for the construction of the SGR station, which affected the Kasoli Housing project area. 

The residents have so far been served with two notices of default through Sebalu and Lule Advocates, representing DFCU Bank on March 17, 2020, and November 12, 2020. Also, eviction notices were served by Bemug Strict Auctioneers and Court bailiffs on April 23, 2021, and September 19, 2021, giving them only 30 days to clear all the outstanding loans or vacate the property within 14-days from the date of service despite the loan term being 15-years.

Eng. Wamburu, argued that the land on which the Kasoli Housing project sits is government land that was used as security to obtain a credit facility from DFCU Bank Ltd and that under the Public Finance and Management Act 2015, there was a need to obtain a no-objection from the Ministry of Finance to guarantee the mortgage using a government asset. 

“To date, we have not seen such clearance, which puts the legality of the credit facility in question,” said Canon Wamburu.

He also said that there is no information on the current outstanding mortgage sum despite SGR engagement with DFCU Bank and the Kasoli Tenants SACCO to avail them with a repayment schedule to enable their valuers to get a better of the issue and determine how many people to be compensated. 

“To date, DFCU Bank and the SACCO have either deliberately and or wilfully refused to avail us with such documentation. It is alleged that only 2 people out of 250 paid up their mortgage obligation but we have not obtained evidence of the same,” Wamburu added. 

SGR also says that despite the original construction plan of 250 houses for the Housing project, only 92 houses have been constructed and that on examination of the land title, 167 plots were identified and this would not be able to accommodate the 250 houses as planned in the document. 

Wamburu also reported that further scrutiny of the strip map of the area by SGR indicated that some houses would overlap but despite these findings, the Housing project representatives were pushing for compensation of all the 250 would-be beneficiaries.

//Cue in: “later on us…

Cue out:…entitled to what?”//

Wamburu told MPs that these and other findings complicated the identification of those who should be compensated and put the SGR project at crossroads as to who and how to compensate the intended beneficiaries of the housing project.

“Discussions with the Chief Government Valuer indicated that the Kasoli Housing Project report should not be submitted without a clear list of beneficiaries of the whole project. We have tried to engage the Director of Housing in the Ministry of Lands on the issue to no avail,” Wamburu noted.

He however assured MPs that they continue to work towards ensuring that the rightful project affected persons are duly compensated to enable SGR to acquire land without any encumbrance.

Roland Ndyomugyenyi, Rukiga County MP said that there is a deliberate effort by government agencies to fail compensation of Kasoli residents.

//Cue in: “SGR, according to…

Cue out:…the Auditor General.”//

David Kalubanga, the Committee Chairperson demanded that SGR avails all vital information regarding meetings held with the different parties saying that his committee does not want to go into the gymnastics of the matter.

//Cue in: “we want to…

Cue out:…not done that.”//

The committee is scheduled to meet the political heads in the Ministry of Works and Transport and the Ministry of Lands in their next meeting.        

Images 1

Keywords