Kampala- Various allegations surround the investor the government has guaranteed $379 million (about Shs1.4 trillion) to construct an international hospital in Lubowa, Wakiso District, through a promissory loan.
The allegations against Ms Enrica Pinetti aka Enrica Maria Aristidina Pinetti, and her company, Finasi, cover at least three continents – Europe, Asia and Africa.
In Africa, the Finasi Company, founded in 1969, lists its operations to be in Libya, Chad, Sudan, Egypt and Uganda. Its largest footprint is in the Middle East, operating in Iraq, Syria, Jordan, Kuwait, United Arab Emirates (UAE), and Saudi Arabia. It also operates in Russia, China, Mongolia, India, Switzerland and Italy. The conglomerate’s offices are in Milan, Italy, and Dubai, UAE.
The conglomerate states on its website that it has built four hospital projects – Sheikh Khalifa Bin Zayed Hospital (Mary – Turkmensitan), Sheikh Zayed Universiy Hospital (Khost – Afghanistan, Sharg Al Nile Hospital (Khartoum – Sudan) and Famboni General Hospital (Moheli – Comoros Islands).
Little is known about Ms Pinetti’s background. According to Bgreport, an independent information portal based in Italy, Ms Pinetti is originally from Oltrepò Pavese, an area of the Province of Pavia, in the north-west Italian region of Lombardy, and is the founder of Finasi srl.
Finasi, a “group active in many sectors, with branches in Russia and Sudan: supply of “turnkey” tanks for the storage of crude oil, in Basra, Iraq; hospital equipment in Africa, Central and South America; sale of furniture for hotels and embassies”.
Her presence in Uganda came in the limelight when she accused Mr Frank Mugisha Kasaka, the then head of procurement at the ministry of Health, of allegedly asking for a bribe from her. President Museveni, consequently, ordered the former Permanent Secretary of the Health Ministry to sack Mr Mugisha.
In Libya, Ms Pinetti, reportedly, had a reputation as the go-to person for business, especially contracts, with the military. According to the Bgreport, she registered seven companies in the British Virgin Islands in April 2008 sometimes as a shareholder or chief executive officer.
Some of the companies she has formed include Finasi Engineering Arca Magna for Heritage Conservation, Medfin Engineering Ltd, Finmed Design Consultancy SA, Finasset General Contractor, Hasep Holding Ltd., Asico Consulting Group Ltd. They are all based at the Trinity Group in Dubai.
“Almost always the “director” Pinetti leaves the post after one year. It is not in itself a crime,” Bgreport notes.
On September 18, 2015, the Bgreport, reported that a company linked to Ms Pinetti, Finaset di Pinetti, was accused of causing financial loss.
On February 20, we contacted the Italian embassy in Kampala about the allegations. An official asked us to, officially, write to the embassy with our inquiry. We wrote to the embassy on the same day but we are yet to receive a response despite confirmation by the same official of the receipt of our inquiry. On further prodding, the official advised us to look for Ms Pinetti to answer our questions.
On February 21, we sent a message to Finasi through an email on their website. To date, they have not responded.
On the same day, we contacted ROKO Construction Limited, which has partnered, under Finasi/Roko SPV, with Finasi to execute the hospital project.
Mr Wille Swanepoel, a director at ROKO, declined to discuss issues regarding Finasi.
“All media statements regarding Finasi and Roko, you must discuss with MD (managing director) Roko. He is out of the country now, he will be back in Uganda tomorrow,” he said.
On February 21, at 4:32pm, we sent an email to Mr Mark Koehler, the managing director of ROKO Construction Limited. We presented him with both the issues touching ROKO and their partner Finasi. He was yet to respond to our email by the time this story was published.
In 2016, in Uganda, Ms Pinetti was sued by Anita Kigonya and two others over an undisclosed matter. Ms Kigonya and her colleagues declined to discuss the details of the 2016 case.
“I am hesitant to discuss such a thing. I know that woman very well. You write your own things, you don’t need to mention this one,” Ms Kigonya said.
We later obtained the details of Anita Kigonya & Others Vs Enrica Pinetti (MEN-00-CV-ME-0642-2016). The dispute of Ms Kigonya and others against Ms Pinetti arose out a Shs14.6m or $4,400 payment. The trio, according to the suit filed in Mengo Chief Magistrate Court by Ms Matovu, Kateregga & Co. Advocates were owed consultancy fees for a three-day conference they organised for Ms Pinetti.
The said consultancy services relate to preparing an environmental and social impact assessment report for the specialised international hospital. “The plaintiff shall aver that owing to the breach of contract, the plaintiffs have suffered financial loss and inconvenience for which they hold the defendant liable in special and general damages,” the suit document reads in part. In a response, Ms Pinetti, through her lawyers of Kampala Associated Advocates (KAA), admitted to have entered an oral agreement with the trio, but denied allegations that she and her company Finasi owed them any money as claimed.
“The First Plaintiff prepared a presentation but it was defective and materially lacking in content. This necessitated a complete overhaul by Finasi srl’s staff Hisham Sultan in order to meet the required minimum standards,” the KAA response filed on March 21, 2017, reads in part.
Ms Pinetti’s lawyers told court that Ms Kigonya had been overpaid given that she received money in Euros and yet her claim was in dollars and that she paid back $100, with Ms Pinetti treating the remaining $300 as “sufficient compensation for the time and effort expended to prepare a presentation at short notice”.
“The case was dismissed by HW Rachel Nakyazze on the April 24 for non-attendance of (appearing in) court by both parties,” a source in the Judiciary said.
June 23, 2016: The Ministry of Health should assist Ms Enrica Pinetti to build her hospital at Lubowa so that referrals abroad stop and we stop the haemmorhage of an estimated $150 million per year that goes into “medical tourism” to India. The heart, the kidneys, the brain and the cancers should all be treated here.”
Strategic Guidelines and Directives for the Term 2016-2021.
August 22, 2014: President Museveni directs the then Permanent Secretary in the Ministry of Health, Asuman Lukwago, to dismiss the Head of Procurement Frank Mugisha Kasaka, for allegedly asking for a bribe from Ms Pinetti.
‘How can you keep a thief in the ministry? And how are you going to counsel a thief ? A thief is a thief. He should be removed.” “I requested them to come to Uganda to deal with kidney and heart problems so that we stop people from going to India for treatment,’’ he said.
October 20I4: Government approves the project to construct an international specialised hospital in Uganda on the 32-hectare piece of land located at Lubowa.
November 2014: The project framework agreement is signed to guide the negotiation of the final project agreements.
May 2015: The project works investment agreement (PWIA) is signed for the design, finance, construction and equipping of the 24O-bed hospital and staff training.
It was agreed that construction would cost $249.9 million and the financing cost of $99.5 million.
December 2015: The project services agreement is signed for the operation and maintenance of the hospital for a period of eight years.
It was agreed that the Ministry of Health, among others, shall pay the hospital operations remunerations (management services remunerations) of $5 million per quarter during the first year and $6 million per quarter in the following years. In addition, the ministry shall pay annual operations services remuneration to be agreed upon by the Ministry of Health and the hospital.
December 2018: The Direct Agreement was signed with the project’s Promissory Note funders.
Source: Committee of National Economy report
Museveni, ministers back hospital project
President Museveni has on various occasions argued in favour of government backing the hospital project.
It was one of the first directives Mr Museveni made shortly after this term started, in what he called “Strategic guidelines and directives for the term 2016-2021”.
The President wrote: “The ministry of Health should assist Ms Enrica Pinetti to build her hospital at Lubowa so that referrals abroad stop and we stop the hemorrhage of an estimated $150 million per year that goes into “medical tourism” to India. The heart, the kidneys, the brain and the cancers should all be treated here.”
Since then, Mr Museveni has written more letters in support of the project, with the latest, to the Speaker of Parliament, coming in on February 25.
Legislators on the Committee of National Economy had raised questions about the company and its ability to deliver the promised hospital. Dr Ruth Aceng, the minister of Health, and Mr David Bahati, the State Minister for Finance in charge of Economic Planning, also defended the company in interfaces with MPs.
“It is a solid company. It has combined with a construction company [Roko], we all know ROKO. It [ROKO] has renovated Mulago, it is building the Parliament of Uganda. It [Finasi] has combined with an internationally recognised hospital of Papa Gania [Papa Giovanni XXIII] of Italy,” Mr Bahati told journalists shortly after interfacing with MPs on February 21.
“Finasi is a multi-company. It has many branches. For us the one we know is the one that deals in the construction of hospitals. The other one of furniture is based in Dubai. We have not had any contract with that branch,” Dr Aceng said at the same briefing, While addressing ruling party MPs in Kyankwanzi.
Yesterday, President Museveni commented on Parliament’s decision to allow the government to guarantee the loan for the hospital.
He said: “I want to thank you for passing the loan for the hospital because you were about to sabotage my three projects. That lady [Pinetti], the Italian lady, is going to build a coffee factory, coffee processing factory in Namanve, so that one also would have collapsed, she has already built a children’s hospital in Entebbe; all those were at risk. But it is good that you stood up and decided correctly.”
However, Saturday Monitor has done a quick background check and found that neither Ms Pinetti, her company, Finasi, nor their local partners are listed as connected to the Entebbe Center of Excellence in Pediatric Surgery hospital.
The government donated the land where the hospital is being constructed, but the hospital, which will have three operating rooms and 72 beds, is being constructed by Emergency, a charity organisation founded in Milan, Italy.
Ms Pinetti or her company Finasi and their local partner, Roko Construction Company, are not listed among Emergency’s donors, partners and friends, the categories of units supporting the project.
Lawyers to write to British governement over Lubowa land
Lawyers representing the family that claims to have fraudulently lost the land on which the proposed specialised hospital in Lubowa is to be built, say they will now take their case to the British government since they accuse a British-registered company of dispossessing their clients of their land. The lawyers say the case may end up in British courts.
The land in question is comprised in Block 269 Plot 1, Lubowa, Wakiso District, and is claimed by the administrators of the estate of Victoria Luwedde, one of the two daughters of Yusuf Ssuuna Kiweewa (RIP), who was a prince in Buganda Kingdom.
The government of Uganda has allocated the land to Ms Enrica Pinetti aka Enrica Maria Aristidina Pinetti, and her company, Finasi, to build a specialised hospital and Parliament this week allowed the government to guarantee a loan of Shs1.4 trillion ($379.71m) which the Italian investor intends to use to build the hospital.
“We are going to sue. I was called to the committee [of Parliament] and I gave them facts, but they went against my facts in spite of the fact we explained to them that the government has a freehold title deed over Mailo land, which is not allowed in law. So the title they have is fraudulent,” Mr Peter Mulira, the lawyer representing the family, said.
He added: “What we are now doing, because a British company is central to the fraud, we are writing to the British government through the High Commission here to institute investigations into the frauds committed by their company. This is Mitchell Cotts Ltd. They are the ones that came back and got that land fraudulently, and they are the cause of all these problems. So we are asking the British government to institute proceedings in the UK because there were frauds, tax offences, corruption.”
In a letter to the Attorney General dated March 11, Mr Peter Mulira writes: “… a few individuals, due to their greed, are about to tarnish the good name of the country and to bring down an international bank [from which the money is to be borrowed] since it will never recover its money on a voidable promissory note. Parliament has no power to validate a title deed which is void for fraud.”
He adds: “Our clients are not against the idea of having a hospital at Lubowa and borrowing money for the purpose. All they are saying is that let this be done properly according to law and without cheating anybody.”
Points dissenting MPs raised
Some members on Parliament’s Committee on National Economy wrote a minority report in which they opposed the idea of the government guaranteeing the loan for the hospital project. Below are excerpts from the report:
The procedure and compliance with the enabling laws has all been flouted and already raises questions. The request to issue Promissory Notes is due to the illegal contractual obligations that had hitherto been signed between GoU and a private company FINASI/ROKO SPV LTD without due Parliamentary Approval.
Why should a private investor such as FINASI/ROKO SPV LTD be given precedence in accessing guarantees when less risky institutions can be revamped or upgraded to offer such services? Autonomous and national referral hospitals like the Uganda Heart and Uganda Cancer Institutes and other tertiary core units should be facilitated in the development of specialised hospital core funclions.
A background assessment would have revealed that FINASI/ROKO SPV LTD is wanting for a project of the magnitude proposed. There is no available information or testimonial evidence of the capacity of the company. According to the Ministry of Finance, Planning and Economic Development, an investor who owns FINASI “a good ally of government” made proposal to H.E the President in February, 20l3 to build and manage specialised healthcare at Entebbe Grade A and the Uganda Cancer Institute.
Acting on this, the President directed the Ministry of Health and Ministry of Finance, Planning and Economic Development to negotiate the project and the contractor financing to which there is no clear evidence that payments should be made through issuance of Promissory Notes.
Rather, the President suggested a Public Private Partnership arrangement and indicated that the company should not get any financial guarantee as they had initially sought. This arrangement is, therefore, against paragraphs 2 and 3 of the Presidents directive in a letter dated April 23, 20l4 to the then Minister of Finance, Hon. Maria Kiwanuka.
Inconsistency in the cost of financing
The investor seems assured of making a profit over the eight year horizon involving construction and operating the ISHU Lubowa Facility. What happens to this otherwise GoU/tax payer’s guarantee, in instances of low yields or even disasters and who tokes the contingent liability on having this health facility in place? The Promissory Note financing modality gives the private investor in this ISHU Lubowa facility 100% funding and guarantees to safeguard them from any losses whatsoever.
Payment for completion of project works through the Escrow Account vs issuance of Promissory Notes
There is no evidence whatsoever, for the decision regarding the undesirability of the Escrow Account thus causing suspicion that money is meant for individual private deals at the expense of Ugandan tax payers.
This is also in total contradiction with the minister’s idea of multiyear commitments untill the loan is paid off for a period of six years after which revenues generated by the facility would be deposited into the consolidated fund annually.
Project Monitoring component absent in the project documents
A much more detailed work plan for supervision and monitoring of project activities before issuance of the Promissory Notes as evidence for complete work should have been clearly provided to ovoid payments of huge sums of monies for works that have not been critically supervised and monitored. A practice which is very common with most Ugandan projects.
There is also no evidence whatsoever, that technical staff in the Ministries of Health, and Finance benchmarked on some accomplished hospital project works which have been previously undertaken by FINASI/ROKO SPV Company elsewhere as best practice requires for quality assurance to guarantee them as favorable candidates for the construction of the ISHU facility project.
Budgetary implication and consequent absence of the Note purchase document.
The project lacks the Note Purchase Document that details the terms of financing which thus makes it an uphill task to calculate the total financial implication of the project to Government much as the direct agreement makes reference to terms in the Note Purchase Agreement which the Ministry of Finance, Planning and Economic Development hasn’t availed.
Lack of clarity on the operation of the ISHU facility alongside other existing specialised facilities in the country
The Ministries of Health and Finance have not clarified on how the ISHU hospital will function alongside the existing specialised facilities like the Heart institute, cancer institute and the super specialised hospital at Mulago and whether there is a possibility of the said facilities being accredited internationally.