KCCA executive director Jennifer Musisi.
THE Kampala Capital City Authority (KCCA) is to pay dearly for what it pleads was an erroneous allocation of a prime plot of land to a city tycoon.
The High Court has ordered the authority to pay over sh2b to Ibrahim Kibirige, commonly known as BMK, for allocating him Buganda Road Primary School land and withdrawing it later.
The allocation was made by the authority’s land board under its predecessor, Kampala City Council (KCC) in 2005.
BMK, the proprietor of Hotel Africana, had wanted to construct a hotel on the said land, through his company Jima Properties Ltd.
The land in question is on plot Plot 19, Bombo Road. But later in 2012, the land board wrote to Jima Properties, recalling the title. It cancelled it, saying the lease was granted in error.
Jima Properties dragged KCCA and its land board to court. It demanded that KCCA pays back all the monies the company spent in acquiring the piece of land and preparation for building, including drawing of the plans.
Jima Properties said it spent sh141m on premiums and ground rent and $150,000 for architectural plans — plans for the hotel that was to be constructed.
It also demanded general damages for the loss of bargain and prospective profits and costs of the suit.
The Commercial Court judge, David Wangutusi, ordered the Kampala district land board and KCCA to pay Jima $105, 000 (about sh283m) as 70% of what it spent on drawing the building plans and sh700m as general damages under the heads of loss of bargain and prospective profits.
In addition, the court ordered KCCA to pay 18% and 6% interest respectively on the said amount per annum from the date of judgment till payment in full.
The court also ordered KCCA to pay Jima a commercial interest of 18% per annum on sh136m, which was earlier paid to Kampala District land board.
The judge said KCCA erred when it cancelled the lease after it duly awarded it to Jima Properties Ltd. The plot had been leased to Jima for an initial term of five years, which would be extended to a full term of 99 on completion of the hotel.
The district land board said it cancelled the offer because KCCA was not the owner of the land and, therefore, could not lease it out.
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