New Vision (Kampala)
December 23, 2003
J. Odyek and Joyce Namutebi
Parliament has approved the speedy divestiture of Nile Hotel International Limited through a 30-year concession to Serena Tourism Promotion Service SA, a subsidiary of Aga Khan Fund for Economic Development.
State minister for privatisation Peter Kasenene appeared tickled on Friday by the positive mood in the House over the divestiture.
He told MPs that when Serena invests US$19m in the hotel, it would be possible to hold a boxing tournament at the conference centre. He said by using switches and electronics rooms could be joined and chairs moved.
MPs marvelled at this five star hotel concept but expressed concern that the Government should closely monitor the investment so that it was not a hot 'air supply'.
Concessioneering is a divestiture mode in which a firm can acquire and manage an enterprise for a period of time at an agreed fee with other commitments.
All assets revert to the owner later. The concession bid structure for the hotel consisted of a US$3m performance bond, standard of a five star hotel and conference centre, minimum investment of US$15m, fixed lump payment of US$1.2m (10% of fixed assets)and an annual concession fee of 4% of gross income.