Correspondences between President Yoweri Kaguta Museveni have leaked revealing that Tian Tang Group proposed to the president and the president accepted, plans by the Chinese-owned but Uganda-based conglomerate to redevelop the present-day government-owned Luzira Prisons into a 5-star hotel and conference centre.
In the leaked 10th July 2022 letter, the President is directing Internal Affairs Minister, Gen. Kahinda Otafiire under whose dockets the Uganda Prisons Service falls to start negotiations with Tian Tang Group and to identify land in the interior, where to relocate the prison.
The letter is copied to the Vice President; the Rt. Hon. Prime Minister; the Minister of Works and Transport, the Minister of Lands, Housing and Urban Development, the Attorney General and Paul Zhang, the Chairman Tian Tang Group Ltd.
Another leaked letter shows that Gen. Otafiire on 22nd February 2024, proceeded to invite the Attorney General and Administrator General to a consultative meeting on the matter. According to General Otafiire’s letter, it appears the plan to give away the prime Luzira land is fait accompli with only a few administrative matters left to effect the deal.
In the letter, Gen. Otafiire tells the Attorney General that the Uganda Prisons Service has identified 3.5 sqm of land in Buikwe District, out of which they have agreed to buy 1 sqm for the said relocation. However, the land in question still has some unresolved matters, especially on ownership, the subject of which the interior minister was inviting the Attorney General and the Administrator General to a 6th March 2024 meeting at the Internal Affairs Ministry Boardroom. Once resolved the matter would proceed to full closure.
It is however not yet clear, who will bear the cost of the Luzira Prisons land and the new piece of land in Buikwe. It is also not clear who will bear the costs of rebuilding and relocating the prison.
Who is Paul Zhang Zhigang, the Chinese Billionaire behind the Tian Tang Group?
According to the Tian Tang Group website, Zhang Zhigang (Paul Zhang), was born in Tangshan, in the Hebei Province of China in 1972. He served in the Hunan Armed Police Force for three years from 1990 to 1993. In 2000, he went to Tanzania to start a business and engaged in the luggage trade; in 2002, he opened a luggage processing factory in Uganda. He would later establish the Tian Tang Group in 2006.
According to the website profile, the group’s business now covers 8 major areas: hotel and catering, tourism, manufacturing, real estate development, mineral development, machinery trade, security services and park construction. Tian Tang Group also says it has more than 20 subsidiaries and 3,000 local employees.
The company runs a manufacturing park in Malala Mukono.
Amongst the Group’s subsidiaries are Nanjing Hotel, Nanjing Tours & Travel Limited, Tian Tang Steel, ComFoam Mattresses, China North Machine Company, Sino-Uganda Mbale Industrial Park and Pearl Trac Limited, the sole authorised dealer of Sany Group in Uganda.
Controversial businessman
In 2021, Tian Tang Group was in the headlines when one of its subsidiaries, Tian Tang Steel, was involved in the vandalising and stealing of Uganda Railways Corporation (URC) rail lines for conversion into steel products. According to the suit details, URC accused Tian Tang Group Limited of destroying up to 14 tons of railway materials (equivalent to 750 metres) recovered from the billionaire’s factory complex at Mbalala, in Mukono District.
Following a tip-off and a court-sanctioned search of Tian Tang’s premises at Mbalala Mukono conducted by the Uganda Police, 14 tons of railway materials/equipment were recovered at Tian Tang’s premises.
On March 29th 2021, Mukono Grade Two Magistrate Steven Waidhuuba issued an order to search the premises of Tian Tang for rail sleepers and steel rails. The search was witnessed by Uganda Railways Corporation and security officials led by Captain Henry Mawejje and Superintendent of Police, Agnes Agabirwe.
URC then proceeded to sue Tian Tang for the actions that it said were “illegal, callous, criminal, detrimental to a public good railway works infrastructure, and in most material particular, the defendant facilitated vandalism of the plaintiff’s railway installations/equipment/materials by providing a black market for the same”.
Through their lawyers, Engoru, and Mutebi Advocates, URC asked the court to order Tian Tang to compensate URC UGX11 .4 billion for the replacement of the rail materials and lost value as well as compensation and UGX150 million as cost of reinstatement and UGX400 million as cost of freight, insurance, procurement and other related costs.
However in an ugly turn of events, according to the Auditor General’s audit report for FY2021/22, Tian Tang entered into an out-of-court settlement with URC.
“It was established that 750 meters of the railway line had been vandalised and the culprits who were arrested led security to one factory in Mukono District where the railway materials, having identification marks of URC, were found. Although the cost of the stolen railway materials, excluding compensation and reinstatement costs, was estimated at UGX 1.10Bn, URC entered into an out-of-court settlement for only UGX 0.21Bn as per the agreement made on 16th November 2021 resulting in a loss of UGX.0.89Bn,” the Auditor General reported.
Question why URC accepted a lesser settlement, the URC Accounting Officer explained to the Auditor General that among other reasons, Tian Tang Steel had pleaded to “be on the verge of bankruptcy due to Covid-19”.
In 2014, the Commercial Court, ordered ComFoam Uganda Limited, a subsidiary company of Tian Tang Group to pay UGX2 billion to Megha Industries Limited, the manufacturers of Royal Foam mattresses over trademark infringement. The court found ComFoam guilty of manufacturing and selling mattresses dressed in Royal Foam-branded mattress covers. The court also ordered ComFoam to pay another UGX1 billion for disobeying a 2011 court order stopping the illegal act while the case went on.
Subsequently, both parties reached a compromise on an agreed figure and entered into a consent settlement which they filed with the Court of Appeal and the High Court and the matter was resolved.