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Investigations on UMEME concession will not lower power tariffs

By Admin

Added 4th April 2018 10:20 AM

The President addressed the inflation of energy losses to 38% and high return on investment of 20% guaranteed to UMEME by his government in the concession that was signed in 2005 and decried the burden the above are putting on Ugandan electricity consumers through high power tariffs.

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Dickens Kamugisha is the Chief Executive Officer of Africa Institute for Energy Governance.

The President addressed the inflation of energy losses to 38% and high return on investment of 20% guaranteed to UMEME by his government in the concession that was signed in 2005 and decried the burden the above are putting on Ugandan electricity consumers through high power tariffs.

By Dickens Kamugisha

On March 12, 2018, President Museveni wrote to the Minister of Energy, Irene Muloni, over the ‘messing up’ of UMEME’s concession by some officials in the Ministry of Energy.


The President addressed the inflation of energy losses to 38% and high return on investment of 20% guaranteed to UMEME by his government in the concession that was signed in 2005 and decried the burden the above are putting on Ugandan electricity consumers through high power tariffs. 

The President, who noted that the inflated energy losses contribute 26% to the electricity tariff while UMEME’s ‘mysterious’ investments account for 22% of the tariff, directed that UMEME’s contract should not be renewed. He also called for investigations by the IGG over the ‘messed’ up concession.

While the directive to not renew UMEME’s contract is welcome because the company has failed to provide Ugandans with affordable, reliable and safe power among others, Ugandans must question the President’s willingness to realise lower power tariffs through addressing corruption and impunity in the electricity sector.

First, Ugandans must question why 13 years since the signing of the concession with UMEME, the President is ordering for an investigation today. Has the President just realised that Ugandans were cheated through the concession? This cannot be!

In 2009, only four years after the UMEME concession was signed, a committee that reviewed electricity tariffs headed by Gen. Salim Saleh noted that the concession was bad and recommended for its renegotiation! So bad was the concession and other electricity sector failures such as cheating of customers through faulty metres by UMEME that Saleh later called for the renationalisation of the power sector! The President and his officials ignored Saleh’s recommendations.

In 2013, an adhoc parliamentary committee that investigated electricity failures also called for termination of UMEME's concession because it was highly unfair on Ugandans while it favoured UMEME. The recommendation was also ignored only for the President to wake up in 2018 and demand for an investigation!

Doesn’t the President know the government officials who connived with UMEME to ignore the 2004 Auditor General report that put power losses at 28%? Doesn’t he know the government officials responsible for signing the concession?  

Moreover, what does the President want the IGG to investigate when institutions such as the Electricity Regulatory Authority (ERA) whose daily mandate is to supervise UMEME and others maintain accurate information on power losses and actual investments from all power companies in the country? In his letter, the President questions UMEME’s ‘mysterious’ investments and losses that have kept power prices up.

We also have a full time paid Auditor General (AG) to audit and assess value for money for all public investments. The President can get reports on UMEME’s ‘mysterious’ investments and losses from these entities for action.

In ordering for investigations to generate answers that are he already has and are readily available, the President appears to be hoodwinking Ugandans into thinking that the Government is interested in lowering power tariffs by bringing UMEME to book.

Ugandans must not allow to be hoodwinked. Instead, Ugandans must know that the real problems they have to fight include corruption that saw the Government sign bad contracts with companies such as Bujagali Energy Ltd, Electro Maxx, Jacobsen, Sinohydro and China International Water and Electric Corporation among others.

These agreements contribute or will contribute to the exorbitant power tariffs Ugandans pay. The Bujagali contract was so bad that today, Ugandans are paying one of the highest electricity prices of US cents 12 for each kilowatt of electricity generated from Bujagali.

The President is well aware of the bad Bujagali contract but has never held any Government official accountable. As Ugandans, we cannot believe that he is willing to fight corruption and lower electricity tariffs. Ugandans are also paying for thermal power from companies such as Electro Maxx and Jacobsen that they are not consuming and the President is fully aware of this exploitation of Ugandans.

With continued cheating of Ugandans, the electricity tariff will not decrease and the President must be well aware of this.

The problem of bad governance and impunity by leaders who were entrusted with powers to ensure that companies do not cheat the citizens will also continue to see Ugandans paying high power tariffs.

Leaders are using the powers to connive with companies against citizens for self-gain. Instead of negotiating for the country, they negotiate for themselves to accumulate enough money because they selfishly know that it is easier to bribe poor people than convincing an empowered society.

As such, Ugandans should not be deceived that the Government is interested in empowering them and in providing lower tariffs which will translate into increased productivity and wellbeing. Knowing this, Ugandans should continue tasking the Government to fully address corruption in the electricity sector until the President feels citizens’ pressure and delivers lower tariffs that every citizen deserves.

The writer is the Chief Executive Officer of Africa Institute for Energy Governance.

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