The bulk of the money for counterpart funding usually goes to land acquisition, settlement and compensation of people affected by the projects
Parliament's natural resources committee has expressed concern over failure by the ministry of finance to allocate the sh178b required as counterpart funding for various electricity transmission projects for which government secured loans.
The committee argued in its report that was presented to the parliamentary budget committee that failure by government to avail counterpart funding delays implementation of projects and makes the projects eventually more expensive than earlier planned.
The 2016/2017 Auditor General’s report revealed that over sh18trillion borrowed money was lying idle due to delayed implementation of projects partly caused by government’s failure to provide its counterpart funding for the projects.
It is upon that background that the natural resources committee headed by Dr Kefa Kiwanuka has proposed that the sh178b required as counterpart funding be appropriated by parliament.
Out of the sh178b for various transmission projects, sh50b is required for the Masaka-Mbarara transmission line, sh28b is for Mirama-Kabale transmission line, sh25b is for Mutundwe-Entebbe line, sh45b is for industrial parks, sh12b for Karuma Interconnection, and sh20b for Sukuru substation.
The report indicated that the bulk of the money for counterpart funding usually goes to land acquisition, settlement and compensation of people affected by the projects.
“The committee recommends that government provides sh178b for the transmission lines to enable evacuation of power in order to avoid associated costs and implications of project delays. The projects will increase power consumption throughout the country,” Dr Kiwanuka explained.
The committee recommended and urged the government to desist from the appetite of acquiring loans when it is not ready to provide the required counterpart funding because it eventually makes the loans more expensive and affects effective implementation of projects.
To address the same challenge, the committee suggests that government needs to explore the option of creating a utility corridor in order to curb down on the exorbitant amounts of money being spent on compensating land owners to acquire the right of way.
The committee recommended that an additional sh22.2b counterpart funding be provided by the government towards priority rural electrification projects in order to increase connectivity in different regions of the country.
The committee noted that there is a management gap in the energy sector which undermines the performance of the sector arising from the fact that the Uganda Electricity Board successor companies of UETCL, UEGCL, and UEDCL belong to the ministry of finance, which creates a technical monitoring and supervision challenge.
The committee asked the government to expeditiously draft and present to parliament an amendment to the Public Enterprises Reform and Divestiture Act to enable the aforementioned electricity companies to revert to the ministry of energy and mineral development for the smooth running of all the power associated companies.
Arguing that access of rural electrification is still low at 20.6% yet hundreds of billions have been injected in power generation projects, the NKyankwanzi woman MP Anne Maria Nankabirwa proposed that allocation of more towards new hydro projects be halted and more funds be allocated towards transmission and distribution of electricity so that more Ugandans are connected to the national grid.
Bulamogi County MP Kenneth Lubogo supported Nankabirwa’s suggestion, arguing that the power that has been generated through the various multibillion projects like Isimba power dam which has been completed should be used to help more citizens have access to electricity.
Kashari County MP Wilberforce Yaguma supported the proposals for availing funds for counterpart funding for the transmission projects and for more money to be allocated towards connecting households with electricity.