Umeme woes blamed on inadequate regime at time of concession

PIC: Eng Dr Frank Sebbowa addressing staff of Umeme. He has blamed Umeme's woes on the PPP Act

BUSINESS

KAMPALA - Umeme has been in the news recently, and for all the wrong reasons. The electricity distributor has been rocked by unprecedented criticism following revelations that President Yoweri Museveni is against the renewal of their concession with the Government.

The company is also dealing with negative reviews from parliamentarians, as well as downright public dissatisfaction with service delivery.

Against this backdrop, Eng. Dr Frank Sebbowa, the principal consultant at Frank Energy Consultants and former chief executive officer of the Electricity Regulatory Authority (ERA) has said the woes of Umeme can be traced back to the lack of proper legal framework at the time of the concession agreement.

 "Umeme came into being without the right legal framework that would have addressed some of the glitches we are hearing of now," he said in Kampala on Thursday.

Had the Public Private Partnership (PPP) Act of 2015 been in existence in 2005, the current mess with Umeme would have been avoided, reasons Sebbowa. Umeme's current concession with Government runs until 2025.

"The PPP Act allows government and its agencies to offload, in a very controlled or regulated environment, the responsibilities of providing a public service or infrastructure to private sector through a special purpose vehicle."

Ssebowa says with the PPP, the thorny issue of losses would have been dealt with more decisively.

"Technical losses should have gone to Umeme, as they did. This is because Umeme were the ones investing in the infrastructure….On the other hand, commercial losses should have gone to Government," he says.

Sebbowa, also a former executive director of the Uganda Investment Authority, says the Government is in a better position to handle commercial losses as opposed to the power distributor.

"Why don't big men and women pay (their bills)? I know ministers who have hotels, students' hostels and they do not pay (bills). Why don't some government institutions pay?"

The next power distribution concession should, therefore, follow the PPP Act and there should be a competitive bidding process that is transparent.

 "Uganda Electricity Distribution Company Limited though, would have to be strengthened in law and operational ability as the contracting authority in terms of the act."