UPHL ROT! COSASE MPs Storm To Kenya To Confirm MESS as Massive Financial & Operational Failures At State-Owned Property Manager Leave MD Wilbert Mugume Fighting For His Job
MOMBASA, KENYA – The noose is tightening around the leadership of Uganda Property Holdings Limited (UPHL) after Members of Parliament on the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) crossed into Kenya to physically inspect Uganda’s multi-billion-shilling property empire following a damning report exposing billions in unrecovered rent, unresolved tax liabilities, doubtful debts and prime government land lying idle.
The high-stakes oversight mission, led by COSASE Chairperson Muwada Nkunyingi, has taken lawmakers to Mombasa, where they are inspecting government-owned properties managed by UPHL as Parliament intensifies investigations into financial and operational failures that have rocked the state-owned property manager.
At the centre of the latest probe is Shs4.8 billion in outstanding rent arrears highlighted by the Auditor General, including Shs4.048 billion owed by Unifreight Cargo Handling Limited, a debt that has repeatedly appeared in successive audit reports since 2022 without being recovered.
The committee is also investigating concerns over several strategically located government-owned properties that have remained underdeveloped or underutilised despite their enormous commercial value.
Speaking during the oversight exercise, COSASE Chairperson Muwada Nkunyingi said the committee had moved to Kenya specifically to interrogate the Auditor General’s findings and establish why government continues to lose billions from assets that should be generating substantial revenue.
“As PAC-COSASE, we commenced oversight on Uganda Property Holdings Limited in Mombasa to interrogate the Auditor General’s observations for Financial Year 2024/25. UPHL is the custodian of Uganda properties formerly owned by Lint Marketing Board, Coffee Marketing Board and Transocean Uganda Ltd. The properties are located in Uganda, Kenya and the United Kingdom,” Nkunyingi said.
He revealed that the controversial Shs4.048 billion rental arrears relating to Unifreight Cargo Handling Limited continue to dominate the Auditor General’s observations despite reports that the debt had previously been waived by the President.
According to Nkunyingi, the committee has since learnt that the Solicitor General advised that such a waiver can only legally be effected through Parliament.
“We learnt that the Solicitor General has now advised that the waiver of rental arrears could only be done by and through Parliament,” he said.
The committee is equally examining the fate of prime government land in Nyali, Kenya, land transferred to the Ministry of Foreign Affairs and abandoned vehicles at the Mombasa Carport along Makupa Causeway, which remain stranded due to delayed processing or auction by the Uganda Revenue Authority.
The latest parliamentary inspection piles fresh pressure on UPHL Managing Director Wilbert Mugume, whose leadership has already come under intense scrutiny following explosive findings contained in the Auditor General’s report for the financial year ending December 2025.
The report paints a disturbing picture of a government company sitting on one of Uganda’s most valuable property portfolios while struggling with unresolved tax disputes, doubtful debts, declining revenues, abandoned strategic projects and grossly underutilised assets.
Sources indicate that Mugume, who has served as Managing Director since August 2019 and is currently serving his second and final term, is facing growing pressure as an intense succession battle reportedly gathers momentum within the company. Reports further indicate that Mugume has been lobbying for an extension despite claims that influential decision-makers are dissatisfied with the company’s performance.
Among the most alarming audit findings is an unresolved income tax assessment amounting to Shs2.19 billion arising from a Uganda Revenue Authority tax audit.
According to the Auditor General, although URA acknowledged that UPHL possessed foreign tax credits worth Shs2.44 billion, those credits were never applied to offset the assessment.
The company reportedly wrote repeatedly to URA requesting correction of its records, but the tax ledger has never been updated to reflect the available credits.
As a result, UPHL continues carrying what the Auditor General describes as an overstated tax liability worth billions of shillings, raising concerns about the accuracy of its financial statements and management’s handling of one of the company’s most significant tax matters.
The audit also uncovered another financial headache involving Shs4.048 billion owed to UPHL by Unifreight Cargo Handling Limited.
The debt has now been classified as doubtful and is increasingly viewed as unlikely to be recovered.
Management is reportedly still awaiting guidance from the Attorney General on whether the amount should finally be written off, leaving billions trapped in uncertainty while the company’s books continue reflecting receivables whose recovery remains doubtful.
The Auditor General warns that the prolonged uncertainty materially affects the accuracy of UPHL’s receivables and exposes weaknesses in the company’s credit management systems.
Perhaps the most shocking revelation concerns UPHL’s management of some of Uganda’s most valuable government-owned properties in Kenya.
Physical inspection by the Auditor General established that UPHL owns three large properties in Nyali, one of Kenya’s most prestigious and commercially attractive locations.
The three properties cover approximately four acres of prime land with enormous commercial development potential.
Instead of generating premium returns expected from such strategic assets, auditors found the properties occupied by small-scale tenants paying relatively low rent, denying government millions of shillings in potential income.
The Auditor General observed that the valuable properties remain grossly underutilised despite their location in one of East Africa’s prime real estate markets.
Audit findings show that proposals had already been prepared to construct maisonettes and flats capable of generating significantly higher rental income.
Those plans were reportedly presented to shareholders but never took off because of cash flow constraints.
Consequently, some of government’s most valuable foreign assets continue earning only a fraction of their true commercial potential.
The Auditor General concluded that failure to develop the Nyali properties continues to weaken the company’s earning capacity, undermine long-term financial sustainability and delay opportunities for expanding its investment portfolio.
The watchdog recommended that management work jointly with shareholders to mobilise investment resources and immediately fast-track development of the properties to maximise utilisation and increase revenue generation.
The audit further reveals that despite facing only a modest funding gap of 12 percent, UPHL still failed to implement nearly half of the interventions contained in its own strategic plan.
Out of 27 planned interventions, only 16 were implemented, leaving eleven strategic targets unfinished despite the relatively small financing gap.
The Auditor General says the failures raise fresh questions about planning, execution and institutional effectiveness.
Financial performance also deteriorated sharply during the review period.
According to the audit, UPHL registered increased losses after suffering declining revenues and increased income tax obligations.
Its operating margin dropped dramatically from 15.5 percent to only 5.4 percent.
The report attributes the decline largely to the World Food Programme downsizing its operations in Uganda and vacating warehouses previously rented from UPHL.
As WFP was the company’s single biggest client, its departure significantly reduced rental income and exposed the risks associated with dependence on one major tenant.
Combined with increased tax obligations, the loss of the major client pushed the government-owned property manager deeper into financial distress.
The findings are particularly significant given the enormous asset base under UPHL’s control.
The company manages a multi-billion-shilling real estate portfolio on behalf of government under the Ministry of Finance, with assets spread across Uganda, Kenya and the United Kingdom.
Its portfolio includes strategic industrial, residential and commercial properties in Kampala, Jinja, Tororo, Mombasa and London.
Within Uganda, UPHL manages the Bugolobi factory complex on Spring Road, warehouses in Tororo and extensive land holdings across Greater Kampala, Nalukolongo, Gayaza and Namulonge.
Overall, the company oversees 29 government properties comprising 12 industrial properties, nine residential properties, seven commercial properties and one land holding.
Its Kenyan portfolio includes 11 warehouses, one carport, two office blocks, three commercial blocks, four residential houses and two yards.
Government records show these Kenyan properties were valued at approximately Shs244 billion following the latest valuation.
UPHL was incorporated on November 3, 1998 after government transferred 23 former state-owned properties into the company.
Those properties were initially valued at Shs13.93 billion before government invested approximately Shs18.7 billion in maintenance and refurbishment to restore them into competitive income-generating assets.
However, the Auditor General’s latest findings have raised uncomfortable questions about whether that objective has been achieved.
With billions locked in unresolved tax disputes, billions more sitting in doubtful debts, prime Kenyan land lying underdeveloped, strategic interventions abandoned and revenues declining, COSASE’s visit to Mombasa is expected to pile even more pressure on UPHL’s leadership as Parliament determines whether the government property giant is delivering value for taxpayers or presiding over a steadily deteriorating real estate empire.
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