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Parliament debates Umeme reportPublish Date: Dec 04, 2013
Parliament debates Umeme report
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Umeme CEO, Charles Chapman
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By Cyprian Musoke and Moses Walubiri

MPs on Tuesday started debating the report on the UMEME concession to manage the power sector in Uganda, with a majority agreeing with the committee position that it should be terminated.


Betty Amongi (Oyam south)said that after the Salim Saleh probe that unearthed exaggeration of losses by Umeme in order to get rebates from government, Umeme publicly declared a reduction of losses.

“The probe also found out that Umeme were not making the right investments in the sector, and it is obvious who were the key figures who exaggerated the losses and they have remained significantly high. So government has continued paying highly with only 12% of Ugandans connected to the grid, the lowest figure in the world,” Amongi said.

Florence Abia said that the Company’s Managing Director Paul Mare earns over sh30 million per month and lives large at the expense of power consuming Ugandans.

“Why does government have to hire four companies to trade in one commodity? All this leads to nothing but leakages because all directors have to be paid exorbitantly at the expense of more investments,” Abia said.

Alice Alaso (Soroti) faulted government for going “full blast” in privatising a strategic sector like electricity, and therefore should rethink the concession. “”For the last five years the President attributed the mess in the energy sector to the 6th Parliament. It is the executive which messed up the sector not parliament,” Alaso said.

She said Umeme claims to have invested US$130 million but the tariffs have remained high with less power provided. “”What happened to the supervision Let the contract be terminated and and government rescues its people,” Alaso said.

Monica Amoding (Youth) said since the sector is of high importance to the country, government should not leave it in the hands of “profiteering” investors. “Its predecessor used to pay sh600 million to the consolidated fund but since it was disbanded, there is no remittance at all. Government needs to repossess the energy sector and make it competitive again,” she said.

Kabajo James (Kiboga east) since losses have not reduced, this means Umeme has not made the investments they promised in the sector. “The contract was lopsided. Let it be re-negotiated rather than terminating the contract,” he said.

Margaret Kiboijanaszaid that poor negotioators tied the hands of Ugandans such that they are damed if they terminated the contract to pay US$147 million, and damned if they don’t.

Syda Bumba tried to put up a spirited defence, arguing that studies were undertaken by competitive firms before UEB was disbanded in order to reduce the losses of energy and attract private capital.

Abia wondered whether the minister was in order continue defending a bogus deal when she was the minister of energy at the time to strike a deal that is continuing to post losses for government.

Bakaluba Mukasa also supported the termination clause and wondered why Ugandan ministers keep negotiation lopsided contracts that don’t favour the common man.

Others who supported termination included Jane Ongom, Barnabas Tinkasimiire, Elijah Okupa, Amos Lugolobi (Ntenjeru).

Rosemary Sseninde (Wakiso) wondered what will happen to Ugandans who had bought shares in Umeme. Leader of opposition Nandala Mafabi  said when former energy minister Hillary Onek tried to point out the anomalies, he was “removed” from the ministry.

Fred Badda said there are other strategic sectors like agriculture which have always asked for subsidies in order to provide employment to the people, but government keeps funding foreign-owned firms instead. Paul Mwiru and Wafula Oguttu wondered where government’s role in the entire deal was, apart from absorbing the losses. Others who supported the severing of the contract were Santa Olom, Florence Ibi, Kaps Fungaroo and James Kakooza.
 

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