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Govt agency, Chinese firm fight over $5m fish project

Posted in Poultry & Fish

UGANDA - A government research institute is locked in a protracted fight with a private Chinese company over the control of a multi-billion shilling fish farming demonstration facility in Kajjansi, along Kampala-Entebbe road.

Documents obtained by The Observer indicate that the Chinese company, Huaqiao Fenghuang Group, should have handed the Aquaculture Research and Demonstration Centre (ARDC) facility back to the National Fisheries Resources Research Institute (NaFIRRI) by April 2014.

However, in what is seen as a breach of a protocol signed when the Chinese government donated $5 million (about Shs 18.3 billion) to upgrade and run the centre for three years as part of a skills transfer initiative, the Chinese company retains control of the facility 18 months after they should have left.

The matter first came to light early this month when the Office of the Auditor General, headed by John Muwanga, summoned the director general of the National Agricultural Research Organisation (NARO) to respond to queries raised by auditors. NARO supervises and coordinates the activities of all six research institutes in Uganda, including NaFIRRI.

The Observer understands that on October 14, a NARO management team led by the acting director general, Dr Yona Baguma, appeared before auditors from the Auditor General’s office, who queried why Huaqiao Fenghuang Group continues to illegally run the facility. When contacted for comment on the matter, Dr Baguma confirmed they appeared before the Auditor General but declined to divulge details.

“We responded to the issue as it was presented to us by the Auditor General’s office,” he stated, before referring The Observer to the permanent secretary in the Agriculture ministry for the official government position. The permanent secretary, Vincent Rubarema, could not be reached for comment on his known mobile phones by press time.

Chinese involvement at the Kajjansi facility was formalised on June 27, 2008 when Uganda and China signed a protocol for the upgrade of the centre, with the new, Chinese-built section named the Uganda-China Friendship Agricultural Technology Demonstration Centre (UCFATDC).

The protocol was signed by PS Vincent Rubarema and Wang Zeshan, the charge d’affaires at the Chinese embassy in Kampala. It was a follow-up to commitments made by China at the November 2006 Beijing summit of the Forum on China-Africa Cooperation (FOCAC).

According to the protocol, the Chinese experts would work side-by-side with their local counterparts for the designated period, after which the Ugandans would take over the management of the 20.82-hectare facility.

PARALLEL OPERATIONS

The battle for control of the institute opened a can of worms into the infighting between the Chinese company and NaFIRRI officials, which has paralysed some activities.

Correspondences obtained by The Observer show that while there were efforts to ensure that the Ugandan and Chinese sides worked together, those efforts failed to bear fruit due to disagreements over work methods.

For instance, in a March 7, 2013 letter, the UCFATDC  general manager, Prof Yi Ronggan, wrote to Dr Dismas Mbabazi (his Ugandan counterpart)  to second Ugandan technicians to work with their Chinese counterparts to ensure continuity after they departed the project in April 2014.

“As we know, the aid period from Chinese government for this project will be ending in April, 2014. It is important that continuity of this project is ensured even after the expiration of the grant period.

As a way of ensuring sustainability and continuity of the project, it is a good idea to have Ugandan technicians fully understand and learn how to handle all the standard operation procedures and rules of different functional components in this project.

I, therefore, advise you to nominate research scientists and two research technicians to work with the Chinese experts in each of the following components; pond and hatchery production, feed mill and training for better communication and learning from each other,” says Prof Yi’s letter.

Subsequently, a series of meetings were held throughout 2013 to plan for the twinning of Ugandan and Chinese workers, which was expected to start five months before the designated handover date.

In a February 18, 2014 letter, the head of ARDC, Dr Dismas Mbabazi, wrote to Prof Yi submitting the names of 13 Ugandan workers to undertake joint activities with their Chinese counterparts. However, when contacted by The Observer last week for an assessment of the twinning process, Dr Mbabazi said it has never taken off.

“We are not working together. As I talk now, they do their own things and we do our own,” he said, bluntly. “At their request, we tried to appoint people to work on the hatchery and other places but somehow they were kept on the side. You go there and you are more of a worker than a partner.

“If you asked for information about production and inputs, you would not get it easily. They would look at it as more of an audit than information sharing.”

In a separate interview with The Observer, Prof Yi laid the blame for the poor collaboration on his Ugandan counterparts, saying they were the ones not keen on working with the Chinese experts.

“We asked them to send people so that we work together, but they don’t send people. The excuse is that, ‘we all have our own job. We all have our own work.’ When we ask them to do something together, sometimes they come and sometimes they don’t come,” he said.

The other problem, according to Dr Mbabazi, is that all the facilities are under the control of the Chinese company, which has paralysed some of their operations.

“Our hands are tied because in most cases we need the infrastructure to use but it is not easy to access the facilities. They still keep the keys to everything, from the feed mill to hatchery. We can’t do some experiments because we need ponds, tanks and space for the research work. There is some work we have had to stop because we can’t work without the infrastructure they renovated,” he said.

“Even now if I am to use a hall, I have to ask [for permission], and sometimes they even demand for letters. It shows you how that collaboration still lacked something,” he added.

However, Prof Yi said they are only playing by the rules agreed upon by the two countries.

“According to the protocol, we use those facilities together but we are in charge of them until the handover,” he said.

PROTOCOL DETAILS

NaFIRRI officials concede that the Chinese experts have brought new knowledge to the facility, which has improved productivity. However, they feel they are left out and the results minimised.

“If we were working together, it would create much more impact because for us we reach many more people across the country than them,” said Anthony Taabu Munyaho, the director of research at NaFIRRI.

Munyaho added: “The problem is not the design of the project but the element of the human being [in charge]. Sometimes somebody is given an opportunity to preside over an item that is supposed to benefit a larger community but as an individual, in your own capacity, you have some interests that you first of all want to be fulfilled and, therefore, you divert from what was set up in the original plan.”

In the protocol, the Chinese government committed to construct training and office buildings, residences for Chinese experts, a hatchery workshop, feed factory, fish ponds and other related structures, as well as supplying the necessary apparatuses and other equipments.

“All the funds needed for the above items will be borne by the Chinese government,” says the protocol, a copy of which The Observer has obtained.

“The cost shall be disbursed with the grant as stipulated in the Agreement on Economic and Technical Cooperation between the two governments signed on September 18th, 2007.”

The Uganda government, on the other hand, was required to provide land on which the project facilities would be constructed, connect roads, water and electricity to the project, and bear all other relevant expenses such as taxes.

“Besides, exempt customs duties on the machinery, equipment, materials (including locally-purchased) and household articles for the Chinese engineers and staffs imported for the project: and any other taxes,” reads the protocol.

The protocol says the project would be operated by an enterprise selected by the Chinese side and entrusted by the two governments. That enterprise turned out to be the private company called Huaqiao Fenghuang Group.

According to the protocol, any profit received from the project once it became operational would be owned by the agricultural technology demonstration centre, and would be used in the operation and development of the project.

“The government of Uganda has the right to supervise the revenue and expenditure of this project, and the Chinese executive enterprise is duly bound to provide the financial report of the project to the government of Uganda at regular intervals,” says the protocol.

Dr Mbabazi says NaFIRRI is kept in the dark about the commercial activities that Huaqiao Fenghuang Group undertakes using the facility, although Prof Yi says they are only mandated to furnish data annually.

During the first three years of the centre’s operations, the Chinese government was mandated to provide funds every financial year for the maintenance and normal running of the facility, including expenditure on dispatching the Chinese experts, farming materials, experiments and research, as well as training of personnel.

But from the fourth year, when control and management of the facility should ideally have reverted to the Uganda government, the Chinese would withdraw and then the centre’s operational expenditure would be sourced from its annual income.

“If the income has surplus after covering the expenditure, it shall be applied in the maintenance and development of the centre. If the income could not meet the expenditure, the deficient part shall be covered by the Chinese enterprise from the income in its own marketing operations outside the scope of the execution of the centre,” says the protocol.

Prof Yi said the Chinese government has indeed pulled out, leaving the company to run the facility based purely on the proceeds from the commercial activities they undertake such as selling fish and fingerlings.

“Since May, we have been running this project ourselves. The Chinese government didn’t offer any help; so, the money we make from feeds is far from enough to run the whole project,” he said. “We report to the Chinese government only because we are still waiting for them to give us a new protocol for the future development of this project.”

Should the government sign a new protocol with the Chinese company, the terms of the old protocol state that Uganda “shall provide another land free of charge for production (or lease/sale the land in favourable conditions), and provide facilities and preferential policies of the investment in their market-oriented activities.”

TERMS OF DEPARTURE

Prof Yi said they have no qualms about handing the project over to the Uganda government, although there are some conditions that need to be met.

“If the Uganda government wants us to hand it over, we are willing to do it. In fact, we have requested several times, but there is no formal letter or documents to the Chinese government. If the Uganda government wants us to hand over this project, they should do the paperwork,” he said.

According to Prof Yi, the other condition is that Uganda must provide a sustainable plan for the running of the centre, which should satisfy the Chinese government that it will not be run down once the Chinese experts are gone.

“The Chinese government is very concerned about the future of this project after we hand over to the Ugandan people; so, we want to know what their plan about the future of this project is,” he asserted. “That’s why we want the report. We don’t want this project to die when we leave.”

October 23, 2015; http://www.observer.ug/news-headlines/40616-govt-agency-chinese-firm-fight-over-5m-fish-project