Museveni calls energy bosses
Nov 11, 2009
PRESIDENT Yoweri Museveni on Tuesday night summoned energy minister Hilary Onek and his permanent secretary (PS), Fred Kabagambe-Kaliisa, over the recent row about the Salim Saleh report.
By Ibrahim Kasita
PRESIDENT Yoweri Museveni on Tuesday night summoned energy minister Hilary Onek and his permanent secretary (PS), Fred Kabagambe-Kaliisa, over the recent row about the Salim Saleh report.
“They met at State House Entebbe and agreed on a ceasefire,†a source in the ministry said yesterday.
During the meeting, which started at 7:00pm and lasted up to midnight, the President reportedly told the protagonists to address the issues in the energy sector collectively.
The New Vision has also learnt that the minister and the PS are planning to address a joint press conference today.
A bitter row had ensued between the minister and his PS over the findings of the Saleh report on electricity tariff reduction.
The disagreement has threatened to undermine much needed investments into the energy sector and risks plunging the country into darkness.
The PS is trying to stop the controversial report from being presented to the Cabinet, arguing that the technical people had been excluded and basic facts on power losses were wrong.
“It is very important that those weaknesses in the report are pointed out prior to it being submitted to the President and Cabinet. In any case, a public document should have a minimum standard,†his letter to Onek, dated November 5, read.
He dismissed the claim in the report that the contractual loss figure was raised to 38%, translating into sh370b in compensation paid by the Government.
The loss benchmarks in the Umeme contract are of two categories, according to the PS, one being the cap for termination of the contract and the other being the benchmark used for setting the tariffs.
“The 38% loss benchmark refers to the cap beyond which, if exceeded by Umeme, the contract would terminate without the Government compensating the company,†he wrote in his letter.
“The factor of 38% has never been applied (in setting the tariffs) and therefore the financial loss purported in the report does not arise.â€
The PS also questioned the comparison of fuel consumption among three heavy-fuel-oil plants, arguing that two plants, Electro-maxx and Invespro, were not yet operational.
Another shortcoming of the report, according to the PS, was the recommendation on reducing the tariffs by 44% - or sh188 per unit - from the current sh426, arguing that sh426 is the subsidised price whereas the real tariff is sh730.
Onek in a strongly-worded response accused his PS of influence peddling and interference in issuing licenses, which is the mandate of the Electricity Regulatory Authority (ERA).
“There is evidence to show that on several occasions you have interfered with their carrying out of their functions and there are instances where you have outrightly usurped their licencing powers,†said his letter of November 6.
He also accused his PS of hiding information from him. “It is high time you stop pushing your personal interests ahead of national objectives,†the letter said, adding that such “gross insubordination†would be dealt with.
The minister reiterated his claim that Umeme inflated the power losses and that there is no incentive in the contract for them to reduce the losses. “You are fully aware that Umeme buys power from UETCL (the transmission company) at sh150 per unit. This simply shows you that Umeme adds more than 300% on the tariffs.â€
Under the law, the power tariffs are set by ERA, the regulator. Experts say factors other than power losses are considered when determining the tariffs. “The tariffs are set in respect of the foreign exchange rates, the inflation rate and the cost of a barrel of oil,†said Eriasi Kiyemba, the managing director of the transmission company, UETCL.
He further pointed out that the figure of sh150 quoted by the minister as the price at which Umeme buys from them is inaccurate. The price fluctuates depending on the source of energy, he explained.
“Most of the electricity generated is from thermal power facilities. Compared to hydropower, thermal power is much more expensive.â€
PRESIDENT Yoweri Museveni on Tuesday night summoned energy minister Hilary Onek and his permanent secretary (PS), Fred Kabagambe-Kaliisa, over the recent row about the Salim Saleh report.
“They met at State House Entebbe and agreed on a ceasefire,†a source in the ministry said yesterday.
During the meeting, which started at 7:00pm and lasted up to midnight, the President reportedly told the protagonists to address the issues in the energy sector collectively.
The New Vision has also learnt that the minister and the PS are planning to address a joint press conference today.
A bitter row had ensued between the minister and his PS over the findings of the Saleh report on electricity tariff reduction.
The disagreement has threatened to undermine much needed investments into the energy sector and risks plunging the country into darkness.
The PS is trying to stop the controversial report from being presented to the Cabinet, arguing that the technical people had been excluded and basic facts on power losses were wrong.
“It is very important that those weaknesses in the report are pointed out prior to it being submitted to the President and Cabinet. In any case, a public document should have a minimum standard,†his letter to Onek, dated November 5, read.
He dismissed the claim in the report that the contractual loss figure was raised to 38%, translating into sh370b in compensation paid by the Government.
The loss benchmarks in the Umeme contract are of two categories, according to the PS, one being the cap for termination of the contract and the other being the benchmark used for setting the tariffs.
“The 38% loss benchmark refers to the cap beyond which, if exceeded by Umeme, the contract would terminate without the Government compensating the company,†he wrote in his letter.
“The factor of 38% has never been applied (in setting the tariffs) and therefore the financial loss purported in the report does not arise.â€
The PS also questioned the comparison of fuel consumption among three heavy-fuel-oil plants, arguing that two plants, Electro-maxx and Invespro, were not yet operational.
Another shortcoming of the report, according to the PS, was the recommendation on reducing the tariffs by 44% - or sh188 per unit - from the current sh426, arguing that sh426 is the subsidised price whereas the real tariff is sh730.
Onek in a strongly-worded response accused his PS of influence peddling and interference in issuing licenses, which is the mandate of the Electricity Regulatory Authority (ERA).
“There is evidence to show that on several occasions you have interfered with their carrying out of their functions and there are instances where you have outrightly usurped their licencing powers,†said his letter of November 6.
He also accused his PS of hiding information from him. “It is high time you stop pushing your personal interests ahead of national objectives,†the letter said, adding that such “gross insubordination†would be dealt with.
The minister reiterated his claim that Umeme inflated the power losses and that there is no incentive in the contract for them to reduce the losses. “You are fully aware that Umeme buys power from UETCL (the transmission company) at sh150 per unit. This simply shows you that Umeme adds more than 300% on the tariffs.â€
Under the law, the power tariffs are set by ERA, the regulator. Experts say factors other than power losses are considered when determining the tariffs. “The tariffs are set in respect of the foreign exchange rates, the inflation rate and the cost of a barrel of oil,†said Eriasi Kiyemba, the managing director of the transmission company, UETCL.
He further pointed out that the figure of sh150 quoted by the minister as the price at which Umeme buys from them is inaccurate. The price fluctuates depending on the source of energy, he explained.
“Most of the electricity generated is from thermal power facilities. Compared to hydropower, thermal power is much more expensive.â€