" The loan agreement requires UCAA to set up an escrow account to hold all of the Authority's revenues.
The agreement provides that UCAA cannot use any of the accrued money for whatever expenditure without approval from Beijing. (!!!)
Toxic clauses
Back in Uganda, UCAA officials, have flagged up to 13 clauses in the agreement as "unfair and erode the sovereignty of Uganda".
The agreements authorises Exim Bank to approve UCAA withdrawals yet there is a statutory board mandated to do so.
"It's clear that CAA will lose its rights of use and control over its revenues... . as a self-financing institution with limited funding. Such provisions would expose the organisation to risk of failure in service delivery and bankruptcy," a source said.
Among the controversial provisions is a surrendering under the airport loan agreement of the approval of UCAA budget, master and strategic plans, which ordinarily are the mandates of the aviation regulator's board, to Exim Bank in Beijing.
"This also exposes UCAA to risk of failure to deliver its mandate, and infringes on State's effective control over UCAA," Prof David Kakuba, then the UCAA director general, who retired in June last year, wrote. He added: "There is, therefore, urgent need to start the review and renegotiation of the Government Concessional Loan Agreement on the upgrading and expansion of Entebbe International Airport Phase I project, together with [other] agreements... in order to reduce the intentions of the parties into a legally binding agreement."
The Government Concessional Loan Agreement provides conditions for signing three other agreements: On-lending agreement between Uganda and UCAA; Repayment Mechanism Agreement between Exim Bank and Uganda and CAA and then, Escrow Account Agreement between Uganda, UCAA and Exim Bank.
Under Section 3 of the Repayment Mechanism Agreement and Section 3.1 (a) of the Escrow Account Agreement, it's required that Annual Operating Budgets for UCAA will be prepared and submitted for approval to both government and Exim Bank. Under subsection (b), Exim Bank has the right to reject or approve the budgets.
Similarly, monthly operating budgets are to be approved to the escrow account in a form acceptable to Exim Bank. The bank is also authorised to inspect both UCAA and government Books of Accounts, which erodes the sovereignty of the State"
Top Ugandan officials have been boxed into a corner of bother after lenders in China rejected their request to re-negotiate 'toxic clauses' in the $200m (Shs713b) loan picked six years ago to expand Entebbe International Airport.
allafrica.com
Basically, China is the worst loan shark of all loan sharks out there!
www.reuters.com
A paper signsture on paper. The moment we tell you to get lost...you get lost. You are set in a trap and i already imagine your little paper documents in your angry little hands 
