Tirupati Development (U) Ltd is providing Micro, Small, and Medium, Enterprises (MSMEs) that are looking to set up small factories a home in Kampala, the capital of Uganda.

The Tirupati Business Park in Kyebando, according to Miraj Barot, the Joint Managing Director of Tirupati Development (U) Ltd, has created 2000 jobs for Uganda by providing affordable condominiums to 200 MSMEs.

 These MSMEs have set up mini-factories manufacturing some of the most essential products required by Ugandans to trade and live their lives.

The Kyebando-based business park is the first of its kind in Uganda despite the government, through the Uganda Investment Authority, setting up several industry parks across the country.

What sets Tirupati Business Park apart is that it targets investors who are starting small but focused on business growth.

Because of this innovative business venture, Miraj Barot was on Thursday, August 31 2023, named the best Business Trendsetter in the private sector by Ugandans who participated in a voting process.

Miraj received the award from the Permanent Secretary and Secretary to the Treasury (PSST) in the Ministry of Finance, Planning and Economic Development, Ramathan Ggoobi, at the 4th Business Trendsetter’s Forum and Awards.

The ceremony took place at the Sheraton Hotel Kampala. Miraj Barot used the ceremony to reveal that when the next phase of the Tirupati Business Park is launched, another 250 MSMEs will be welcomed to set up more factories and create jobs.

To win the award, Miraj Barot was chosen ahead of Richard Zulu, the Founder of Outbox Hub, an enterprising startup; Goretti Massadde, the CEO of Uganda Institute of Banking and Financial Services; and Irene Birungi Mugisha, the Director of ARC and Ideator PCF.

In the category of Business Trendsetter Public Sector, the voters picked Ramathan Ggoobi over Prime Minister Robinah Nabbanja, Sarah Ndoboli Kataike, the State Minister for Luwero, and Simon Kasyate, the KCCA spokesperson.

Irene Birungi defeated Elly Karuhanga of Uganda Chamber of Mines and Petroleum, Dr Henery Clarke Kisembo, the Chairman of DALI, and Amos Wekesa of Great Lakes Safaris in the category of Business Trendsetter 2022/2023 Hero.

In the category of Life Time Achievers, Wasswa Birigwa, the Chairperson of FDC, Peter Sematimba, Robert Kabushenga and Josephat Machete were awarded.

The Founder of the Business Trendsetters Forum and Awards, Yvonne Mpanga said each year business trends tracers identify business leaders who are championing new business trends for recognition. 

In 2008, Tirupati Development Limited applied for allocation of land from Uganda Investment Authority (UIA) and the request was granted in 2011. In a later dated 26th June 2012, UIA gave Tirupati an invoice to pay the premium for the land. Tirupati paid the sum.

The land in question is located at Kyagwe Block 113 Plots No. A019 and A020 situated at Namanve - Kiwanga-Mawutu, Nantabulirwa, Goma Division, Mukono Municipality, Mukono district. It measures approximately 1.5 acres and 10 acres respectively.

Through letters dated 28th October 2010 and 5th January 2011, UIA authorized the Commissioner Land Registration to provide surveying services on behalf of Tirupati in respect of the two plots and the Tirupati paid land fees for the surveying to be conducted.

Also, through a letter dated 17th September 2022, UIA granted permission to Tirupati to take possession of the suit land by fencing and grading it which was done.

After taking possession of the suit land, Tirupati started the process of developing the land by conducting the survey works, obtaining NEMA clearance certificate, obtaining development and building plans which needed certificate of land title before being approved.

However, on several occasions, Tirupati demanded to be given a land tittle to start developing the land but UIA refused to date. Instead, UIA in a fraudulent manner started on a process to allocate the land Tirupati paid for to other parties. This forced Tirupati to go to court for redress.

Court proceeding

To seek redress, a case, Civil Suit No. 335 of 2021 in the high court of Uganda at Mukono, was registered with Tirupati Development (U) Limited as the Plaintiff and Uganda Investment Authority and the defendant. And on Friday, 21st July 2023, before Justice Florence Nakachwa, a ruling was been made with the plaintiff coming out victorious.

According to the ruling, the defendant neither filled its written statement of defence nor entered physical appearance in court despite effective service of court process.

In the case, Tirupati was represented by Counsel Pamba Egan of M/S Opwonya & Co. Advocates and later under Trust Law Advocates. Lawyers representing Tirupati filed the plaintiff's written submissions in court on 13th December 2022.

The case sought to address two issues; whether Uganda Investment Authority is in breach of the lease of agreement it executed with the Tirupati and whether there are remedies available for Tirupati, the plaintiff.

Leasehold is one of the land tenure systems in which land may be owned in Uganda as stipulated under Article 237 (3) of the Constitution of the Republic of Uganda, 1995 and Section 2 of the Land Act, Cap 227 as amended.

During the trial, the directors of Tirupati provided evidence proving that the lease transaction; including payment of Shs7, 000, 000 as fees to procure a NEMA Certificate. Justice Nakachwa reveals in the ruling that Tirupati also procured architectural plans for the intended project.

She explains that UIA was well aware of the proceeding developments of the suit land but refused to issue the land tittles to the plaintiff with the intentions of unlawfully and illegally taking away the plaintiff's land and allocate it to third parties.

Tirupati denied access on the suit land

A witness told court that since 2014, Tirupati was denied access to the suit land and that UIA instructed its agents not to allow the plaintiff access the land. Because of this, Tirupati's efforts to develop the land were futile and hindered.

The witness added that due to UIA's actions, Tirupati has lost business and money invested in the project and suffered huge inconveniences and income that would have been earned.

"In the present case, the evidence adduced especially the correspondences from the defendant to the plaintiff clearly shows that the lease agreement was concluded in or around 2011/2012 and the plaintiff was given a go ahead to develop the suit land," the ruling reads in part.

"The evidence on record further shows that the plaintiff requested for the land tittle in order to register its lease hold title but to-date it has not been handed over the defendant. This has frustrated its continuance to develop and use the suit land for its business or investment,"

"The defendant's refusal to handover the land tittle to the plaintiff to enable it have its name registered as the lease hold owner of the land and later withdrawing the plaintiff’s possession of the suit land, in essence means the defendant defaulted in fulfilling its obligation under the lease agreement to give vacant possession of the said land to the plaintiff as it was required. This failure has deprived the plaintiff of its leasehold ownership of the suit land and thus puttingn the plaintiff's activities on the suit land at a stand-still,"

UIA gives suit land to Creston Properties

The ruling by Justice Nakachwa indicates that court summoned the Commissioner Land Registration to give a proprietorship status of the suit land and on 23rd March 2023, Joshua Twagiramungu testified and submitted a letter dated 30th February 2023 from the Commissioner Land Registration clarifying the current status of the land.

According to the letter addressed to court, the suit land is now registered as Kyaggwe Block 113 Plots 3695, 3736 in the names of Creston Properties Limited. Furthermore, an initial lease agreement was signed between Uganda Investment Authority and Creston Properties Limited on 22/8/2014 and a 49 lease agreement signed on 26th June 2020.

On the 23rd day of March 2023, court visited the land and found that the suit land was being developed by Creston Properties Limited and the land was cordoned off using corrugated iron sheets. Old stumps with the names of the Tirupati could be seen.

"In my judgment, the defendant's actions clearly amounts to breach of contract to which the defendant must be held liable,"

"The plaintiff has proved to the satisfaction of the court that it validly entered into a lease agreement with the defendant which has been breached by the defendant.

The final ruling

After taking into account all the evidence and arguments presented, Justice Nakachwa ruled that, "In the instant case, the plaintiff being the successful party is entitled to the costs of the suit. Having found both issues in the plaintiff's favour, judgment is hereby entered for the plaintiff and I hold that the defendant is in breach of the lease agreement between it and the plaintiff,"

The confirmation of commercial oil and gas resources in Uganda in 2006 has since been a source of both pride and high expectation for many Ugandans. Even more so with the launch of the projects in April 2021 and the announcement of the Final Investment Decision (FID) for the Tilenga, Kingfisher and EACOP projects.  This comes on the back of Government’s efforts to ensure lasting value to the country, and a suitable return on investment to our partners, the oil companies. 

“FID is one of the important steps in Uganda’s journey to First Oil as it signifies the commitment of the oil companies, TotalEnergies EP Uganda CNOOC Uganda Limited and the Uganda National Oil Company to fund the development of Uganda’s oil and gas project.  This also means that Uganda’s oil and gas sector remains profitable, even amidst the challenges related to the volatile crude oil prices and the ongoing COVID-19 pandemic.  FID, therefore, unlocks the single highest value project in the country, that will bring in an investment of close to $15bn in the next three years within Uganda,” said Irene Batebe, Permanent Secretary Ministry of Energy and Mineral Development. 

The Journey to FID

Government’s efforts, since the 1980s, were initially focused on developing the required institutional and regulatory capacity to sustainably manage the oil and gas sector, while promoting investment.  “This, to many might have seemed to cause delays, but was a “necessary evil” and has come with benefits.  Uganda boasts of progressive laws and regulations, which are being benchmarked on by other countries, some of whom are already producing oil.  Uganda has indeed developed a unique model of management of the oil and gas sector, based on lessons learnt from countries that have been successful, and those that have made mistakes,” she added. 

Government has also ensured that both the interests of Ugandans and the investors are aligned. This alignment took several years but has culminated into the announcement of the FID by the oil companies. 

The preliminary work to set the stage for the launch and construction of these projects has progressed.  The Environment and Social Impact Assessment and the Front-End Engineering Design studies for the Kingfisher and Tilenga Development Projects together with the EACOP were successfully concluded.  All the land required for these projects has been identified and surveyed.  The processes of compensation and relocation of the Project Affected Persons (PAPs) are ongoing. Uganda’s oil and gas project is now both technically and commercially mature, and ready to take off.

What Next?

The technical schedule for the projects indicates that Fist Oil will be achieved 36 to 45 months after taking of FID. These months will be characterized by intensive activity, as FID unlocks the detailed Engineering, Procurement and Construction (EPC) phase for the projects, where the bulk of opportunities lie.  This is critical for the Ugandans and Ugandan firms that have and continue to develop the required capacity to harness these opportunities.          

Uganda has made significant strides in promoting National Content. The main objective of the country for national content in the oil and gas sector is to achieve in-country value creation and retention whilst ensuring competitiveness, efficiency, and effectiveness.

“In 2020, the ratio of procurements spent on indigenous Ugandan companies went up to 92%, up from 74% in 2019 and 59.6% in 2018. Whereas, this was during a period of relatively low activity, its is indeed a show of the capability of Uganda enterprises.  During the peak of exploration (2008 to 2017), the country achieved 28% national content.” Mr. Ernest Rubondo, Executive Director, Petroleum Authority of Uganda (PAU) noted.

Having finalised all the necessary commercial agreements, the IOCs will now swing into the EPC for these projects. The contracts have been unbundled to enable local investors partake on the opportunities. Bid notices for supplies and services are now being advertised and the process of awarding contracts is expected soon.

The EPC contracting processes for the projects is already ongoing; this is being undertaken by the oil companies that have divided the specific projects into different work packages. This will require a wide range of contractors and sub-contractors. The initial opportunities will relate to the pre-drilling and related civil works (including site preparation and some construction), and related supplies. This will require over 3,000,000 tons of local construction materials such as murram, sand, aggregates, and cement. 

This is just one of the sixteen categories of goods and services that is ringfenced for Ugandans in the National Content Regulations. Another is logistics/ transportation, with close to 300 trucks required per day to transport the construction equipment and materials during the peak period. Even beyond these sixteen categories, Ugandans can create Joint Ventures with non-Ugandan entities to participate in the more technical and specialist works, and hence promote technology transfer.

It is also important to understand the contracting processes involve different levels and/ or work packages, that will each have opportunities for sub-contractors for up to three levels, in some instances.

“Following the launch of the projects, contracts worth US$ 6 billion for over 40 work packages and contracts for the Tilenga, Kingfisher and EACOP projects have been submitted by the licensees to the Petroleum Authority of Uganda (PAU) for approval before award.  The Authority manages the National Supplies Database (NSD), a register for entities willing to supply goods and services to petroleum activities.” Rubondo added. 

The oil companies are required, by law, to only contract entities registered on the NSD.  The NSD therefore enhances national content by giving visibility to Ugandan companies and creates opportunities for joint ventures to improve capabilities.  On the other hand, the National Oil and Gas Talent Register (NOGTR), gives visibility to those with oil and gas related skills.

The capacity that Government and its partners are building needs to be sustained beyond the peak period; the NSD and NOGTR will continue to give visibility to the skilled individuals and entities.  But also, entities that actively participate need to develop and implement strategies that will see them grow and expand their business into other sectors, especially after the peak period.

Government continues to support Ugandans through collaborations with several entities willing to develop the capacity of Ugandans and Ugandan entities. Recently, the African Development Bank and the Government of Uganda signed a $500,000 grant agreement for financing of Micro, Small and Medium Enterprises (MSMEs). The project, which is being implemented by the PAU in partnership with the Stanbic Business Incubator and other partners, aims to help develop capacity of local Uganda MSMEs along the EACOP route, by enabling them to access new market opportunities, and building linkages with larger, national, regional, and international companies. The project aims to support inclusive private sector growth and the creation of an estimated 500 jobs along the pipeline. 

Government established a Petroleum Institute in Kigumba to support the delivery of the required technicians in the Sector. There are other Government vocational training institutions that are offering training programmes relevant for the oil and gas sector and these institutions are so far underutilised. These include: Buhimba Vocational Training Institute (VTI), Kiryandongo VTI, among others.

“This work to have Uganda’s nascent oil industry finally take off has been a long and tedious one; it is only fair to congratulate everyone who has been part of this long journey. Ugandans should focus and utilise this time to continue developing their individual and collective capacity to benefit from the development of Uganda's oil and gas resources.” Said Mr. Rubondo.

The Chairman and Chief Executive Officer (CEO) of TotalEnergies, Patrick Pouyanné, has promised that the lead joint venture partner in the development and eventual production of Uganda's oil and gas resources will use the Lake Albert Development Project as an exemplary project in terms of shared prosperity and sustainable development.

The Lake Albert Development Project has come under scrutiny from Civil Society Organizations who argue that the project possess risks to the environment and the social wellbeing of host communities not only in Uganda and Tanzania but also in DR Congo.

But Pouyanné is quelling these fears saying that TotalEnergies is committed to implementing action plans that will have a net positive impact on biodiversity as part of the implementation of these projects.

“We are fully aware of the important social and environmental challenges it represents. We will pay particular attention to use local skills, to develop them through training programs, to boost the local industrial sector in order to maximize the positive local return of this project," said Patrick Pouyanné, chairman and CEO of TotalEnergies.

He added: "With today's signing of a framework agreement on renewable energy, we are laying the foundation to implement our multi-energy strategy in Uganda and contribute to people's access to energy."

TotalEnergies maintains that this oil development is in line with TotalEnergies' strategy of only approving new projects if they are low-cost and low emissions.

In particular, the design of the facilities incorporates several measures to limit greenhouse gas emissions well below 20 kg CO2eq/boe, including the extraction of Liquefied Petroleum Gas for use in regional markets as a substitute for burning biomass, and the solarization of the EACOP pipeline.

On 1^st February, 2022 TotalEnergies and the energy ministry signed a MoU for the development of renewable energy with the objectives of developing 1GW of installed capacity, promoting access to electricity and clean energy, supporting national climate change objectives through the deployment of carbon footprint reduction projects.

Earlier, that day Uganda’s President Yoweri Museveni, the Vice-President of Tanzania, Patrick Pouyanné, representatives of China National Offshore Oil Corporation, Uganda National Oil Company and the Tanzania Petroleum Development Corporation announced the final investment decision for the the Lake Albert Development Project.

The Lake Albert Development Project encompasses the Tilenga and Kingfisher upstream oil projects in Uganda and the construction of the East African Crude Oil Pipeline (EACOP) in Uganda and Tanzania.

The Tilenga project, operated by TotalEnergies, and the Kingfisher project, operated by CNOOC, are expected to start producing in 2025 and to reach a cumulative plateau production of 230,000 barrels per day.

The upstream partners are TotalEnergies (56.67%), CNOOC (28.33%) and UNOC (15%).

Production from the oil fields in Uganda will be transported to the port of Tanga in Tanzania through the EACOP cross-border pipeline, whose shareholders are TotalEnergies (62%), UNOC (15%), TPDC (15%) and CNOOC (8%).

TotalEnergies says that all partners are committed to implementing these projects in an exemplary manner, taking into consideration the environmental and biodiversity stakes, as well as the rights of the concerned communities, in accordance with the stringent performance standards of the International Finance Corporation (IFC).