Uganda’s parliament has launched a probe into a 2024 aircraft deal between its shareholder, the Ministry of Defence and Veteran Affairs (MoDVA), and Dubai-based investment firm Alpha MBM, with lawmakers demanding answers over the failed joint venture that was meant to recapitalise state-owned Uganda Air Cargo (UCC, Entebbe) (UACC), which has been dormant for years due to inadequate funds.

Under the deal, UACC took delivery of a B737-400(F), P4-JMD (msn 27914), and expected six more following a memorandum of understanding signed on May 23, 2024, with Alpha MBM, the private investment office of Dubai's Sheikh Mohammed bin Maktoum bin Juma Al Maktoum.

During a meeting on July 17, the chairman of Uganda’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE), Medard Lubega Sseggona, criticised the arrangement, noting that the private partner delivered only one of seven promised aircraft before repossessing it, meaning UACC still has no operational fleet, Parliament Watch, the country's independent parliamentary monitoring site, reported.

"For the past year, the joint venture partner has failed to meet its obligations, yet the ministry insists UACC abides by the deal. The partner contributes no equipment, no business ideas - what value do they bring?" Sseggona asked. The committee ordered UACC to submit a value-for-money audit of the deal.

Sseggona also summoned the Ministry of Defence and Veteran Affairs to explain its failure to pay UGX29 billion shillings (USD8 million) owed to UACC for troop transport services to Somalia, amid growing concerns over financial mismanagement and interference in the state-owned company’s operations.

This followed findings from Uganda's Auditor General showing UACC being burdened by uncollected debts and heavy liabilities. MPs criticised the ministry for being UACC's largest debtor and questioned why it continues to seek recapitalisation while ignoring due payments. Sseggona also criticised what he termed the ministry’s overreach, saying it should stick to policy and leave management to UACC’s board.

In addition, COSASE raised alarm over the carrier's UGX8 billion shilling (USD2.2 million) annual budget to be spent on salaries and maintenance despite having no operational aircraft. MP Yusuf Nsibambi called UACC’s dysfunction an "economic liability", urging swift action to reestablish a functioning board and restore its independence from the Defence Ministry.

The grounded cargo carrier has requested UGX381 billion (USD106.2 million) to resume operations, having lost its air operator's certificate (AOC) in 2014.

According to the Auditor General's report for the year ending June 2024, the carrier's principal revenue-generating asset, a Lockheed Hercules L100-30, has been grounded at Jordan Aeronautical since November 2022. "While the aircraft was grounded, it was discovered that it needed an avionics upgrade in line with civil aviation regulations. In addition, the corporation has not received the anticipated capitalisation from MoDVA as approved by Cabinet," the report noted.

ch-aviation's historical data shows that UACC also used to operate two L-1011-200(F) freighters, 3X-GFP (msn 193U-1201) and 5X-AAV (msn 193U-1201), both stored at Entebbe.