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Court summons AG, Umeme over electricity deal
Publish Date: Aug 18, 2014
Court summons AG, Umeme over electricity deal
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By Andante Okanya

The High Court in Kampala has summoned government’s chief legal advisor the Attorney General (AG) and national electricity distribution company Umeme Limited over the power concession deal reached in 2004.


The summons dated August 11, 2014, was prompted by a civil suit filed on the same date by a one Rashid Kigemuzi, purporting fraud. He wants the deal terminated.

The civil division deputy registrar Charles Emuria has cautioned the defendants to heed, lest the case is heard  without their input.

They are required to file their defence within 15 days from the date of receipt of the court summons, as prescribes in civil procedure rules of court.

“Should you  fail to file a defence in the manner aforesaid, the plaintiff shall proceed with the case and judgement may be entered against you in your absence,” the  summons states.

On Friday, when New Vision sought a comment from the Solicitor General Francis, a senior official in the AG’s chambers, he said he was not aware of it. He however said he would ascertain and respond.

“I am not aware of it. I need to check. I will find out on Monday  and let you know,” Atoke said.

On Saturday, the Umeme head of communications Henry Rugamba, told  New  Vision that he was not aware of the case. He also promised to check with the company’s legal department, and  respond appropriately.

“Not to my  knowledge. I will verify and get back to you,” Rugamba stated.

Kigemuzi alleges that since 2004, the power distributor has fabricated levels of investment in the distribution sector.

Through Balondemu, Candia and Wandera Company Advocates, he asserts that Umeme claims to have invested sh32b, whereas the actual investment has not exceeded sh16b

He purports that on November 26, 2006, the loss cap was illegally and fraudulently  increased from 33% to 38%.

The complainant claims government is locked in a tricky predicament, equating it to a  ransom. He laments that the tax  payer would shoulder the burden  to compensate Umeme in the event  that the deal is terminated.

“The plaintiff shall contend that the concession agreement is contrary to public policy in so far as it, interalia(among other things) inhibits government’s right to terminate the agreement,” the plaint states.

Kigemuzi alleges  fraud, saying Umeme was not among the six bidders. He  claims the entity was handed a 20-year lease on May 17, 2004, eleven days after its incorporation.

The complainant is also querying the drafting of the concession, saying government reneged on its responsibility. Umeme’s concession runs expires in  2025.

Kigemuzi contends that concession is illegal, as the AG did not draft the legal documents. He states that government hired Hutton and Williams, and Shonubi, Musoke and Company Advocates, as external and internal transaction advisors respectively.

Kigemuzi cites conflict of interest, saying Shonubi, Musoke and Company Advocates were at time of signing still directors in Umeme.

He faults government for shelving a parliamentary resolution to terminate the deal. This year on March 26, Parliament resolved that the contract be terminated.

Parliament recommended a Public-Private Partnership, with the government having a 51% stake.

However, government has shelved  plans on the termination, and instead opted for a review, explaining that the tax payer stands to forfeit sh526.3b in compensation to Umeme.

Kigemuzi is demanding a forensic audit of the purported losses from which Umeme claims compensation.

A hearing date is yet to be scheduled.

RELATED STORIES:

Umeme IPO wins numerous accolades

NSSF buys 100 million Umeme shares for sh34b

MPs vote to terminate Umeme, Eskom contracts

Umeme wants to increase power prices

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