Overview:
Appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Wednesday, Mr Basajjabalaba said his company won a tender in 2001 to redevelop City Square and paid Shs1.635 billion to the then Kampala City Council as a premium.
KAMPALA. A fresh bid to turn Kampala’s City Square into a commercial complex has reopened a long-running dispute over the development rights to one of the capital’s most valuable public spaces, with businessman Hassan Basajjabalaba demanding compensation over a cancelled deal dating back 25 years.
The dispute puts the commercial future of the approximately 2.5-acre site at the centre of questions over public land, private investment and the government’s potential revenue from redeveloping prime property in the heart of Kampala.
Appearing before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) on Wednesday, Mr Basajjabalaba said his company won a tender in 2001 to redevelop City Square and paid Shs1.635 billion to the then Kampala City Council as a premium.
Under the proposed arrangement, the green space at ground level would have been preserved, while commercial facilities were to be constructed underground.
The agreement provided for an initial five-year lease beginning in 2002, with an option to extend it for another 49 years.
The project was later halted, becoming part of a wider series of compensation claims arising from cancelled market and property arrangements involving companies associated with Mr Basajjabalaba’s Haba Group.
The businessman told MPs that he was surprised when a new proposal emerged to commercially develop the same piece of land while his claim over the earlier agreement remains unresolved.
In a letter dated August 18, 2026, businessman Hajji Hassan Bulwadda asked government to allow him to develop about two acres of City Square into an eco-friendly commercial complex comprising a hotel, shopping mall and other facilities powered by solar energy.
The proposal effectively places a fresh commercial investment plan on a site that has already been at the centre of a major government-private sector dispute.
On August 30, President Museveni directed Kampala Capital City and Metropolitan Affairs Minister Minsa Kabanda to study Mr Bulwadda’s proposal in consultation with the Kampala Capital City Authority (KCCA) and report back to him.
But the proposal has faced resistance from city authorities and civil society groups, who argue that commercial development would undermine the public purpose of the space.
Kampala Lord Mayor Ronald Balimwezo Nsubuga has opposed redevelopment, saying City Square should remain an open public space because of its environmental, recreational and emergency-response functions.
He has also raised questions about KCCA’s legal obligations in managing public land held in trust for the city.
For Mr Basajjabalaba, however, the renewed commercial interest in the site raises a separate business and legal question: what happens to his earlier investment and claim if government proceeds with another developer?
His City Square claim is part of a much wider dispute involving companies associated with his Haba Group and several public properties.
Between 2000 and the early 2010s, companies linked to the businessman secured management or lease arrangements involving several Kampala markets and Constitution Square, also known as City Square.
After some of the arrangements were cancelled, government paid or became liable for compensation running into more than Shs140 billion.
The compensation claims later attracted scrutiny over the basis and value of the payments, placing the government’s handling of public assets and private investment agreements under closer examination.
The legal battle reached the Supreme Court last year.
In September 2025, the court set aside orders issued by the Constitutional Court in litigation involving Mr Basajjabalaba and Legal Brains Trust, holding that the Constitutional Court lacked jurisdiction to determine a fact-heavy enforcement dispute under its constitutional-interpretation jurisdiction.
The ruling forms part of the wider legal history of the compensation dispute and does not amount to a blanket judicial endorsement of commercial redevelopment of City Square.
The latest proposal has therefore brought the commercial question back into focus: whether and how a prime public property can be redeveloped, who should benefit from its commercial value and how government would deal with competing claims arising from previous investment arrangements.
City Square sits in the centre of Kampala, close to major government institutions and the Independence Monument, making it one of the city’s strategically located public spaces.
Its location gives it significant commercial potential for hospitality, retail and other businesses, but successive attempts to commercialise the space have encountered legal, environmental and public-interest objections.
A 2007 government designation also identified City Square as a protected historical and monumental site, adding another layer to the debate over whether its commercial value can be unlocked without changing its public character.
For government, any decision on the latest proposal will therefore have implications beyond the proposed hotel and shopping mall. It will also test how the state balances the commercial value of public land with existing investment claims, legal obligations and the wider public interest.