MPs demand audited report for UMEME buyout cash

KAMPALA - Although Parliament has passed the $190.9 million (sh699 billion) buyout for electricity distributor UMEME Limited, some legislators have called for an audit of the money before payment.

This was after it emerged that part of the sh699 billion that the finance ministry sought to allocate for the company's buyout had no audited reports presented in Parliament.

During the committee deliberations, Maracha county MP Dennis Oguzu Lee (FDC) raised concerns about the legitimacy of UMEME’s financial claims.

"The minister came to us (National Economy Committee) that they want to borrow money to buy UMEME out. But when we interrogated him as to whether the claims are justified, there has not been a conclusive position," he said.

"Until now, the figures of the claim are being disputed. Why? Because UMEME has been recovering their costs through what we call feed-in tariff [FIT]. They are supposed to add their costs and then charge it in tariffs. Now UMEME is coming to demand money from Ugandans when their concession is about to expire,” added Oguzu.

“We even asked the Auditor General for audited accounts which he hasn’t brought. We are supposed to interface with REA which approves all investments in the energy sector, but that has not happened."

Oguzu added: "We cannot continue being a rubber stamp Parliament. This Parliament must for once do a service to Ugandans. I, therefore, implore you that we stand over that budget."

Committee chairperson Robert Migadde Ndugwa (Buvuma Island, NRM) revealed that the committee was still reviewing the $190.9 million loan request intended for UMEME's buyout when the minister presented another source of funding.

"It’s true we have interacted with the Ministry of Finance, but we have not concluded because Ministry of Energy was supposed to produce the report of the auditor general on how they arrived at that $190 million," he said.

"Ministry of Energy has not come back to the committee. Actually, we don’t know what will happen to the request before the committee."

MP Geoffrey Ekanya insisted that the money should be audited before the payment is made. 

“We need this company out because they make [a lot of] profits. Unfortunately, there are issues surrounding the amount to be paid out which we need audited," he said.

General duties finance state minister Henry Musasizi clarified that every budget presented by the government is backed by revenue sources such as taxes, external borrowing, and domestic borrowing.

"On UMEME, we are going to borrow $190 million from the domestic market to finance the obligations which have fallen as a result of winding up of UMEME. As a result of this, we are seeking approval from Parliament to allow us to borrow from the domestic market," he said.

"What we presented today in the committee was: 'Here is our financing requirement totalling sh4.255 trillion', and the question was, can we provide how we are going to finance them?

“We said yes, we are going to borrow sh3.1 trillion out of which the [$190 million] is for UMEME. That is why we are here. This means if we approve this borrowing, the one in the national economy committee collapses," said Musasizi