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Umeme contract unchanged

By Vision Reporter

Added 2nd August 2007 03:00 AM

UMEME'S power distribution agreements with the Government are unlikely to be reviewed further following the signing of the Amended Concession Agreements in December 2006.

UMEME'S power distribution agreements with the Government are unlikely to be reviewed further following the signing of the Amended Concession Agreements in December 2006.

By Ibrahim Kasita

UMEME'S power distribution agreements with the Government are unlikely to be reviewed further following the signing of the Amended Concession Agreements in December 2006.

Sam Zimbe, the Umeme chief commercial manager, said that in May last last year, there were negotiations on contractual issues including Umeme’s exit provisions.
“These discussions took account of the prevailing energy issues.”

Zimbe was responding to MPs on the public accounts committee call for a review of Umeme’s contract because “Umeme charges excessive rates and had failed to solve rural electrification problems.”

The MPs said the energy minister, Daudi Migereko, had told them that Umeme does not pay money to the Government and all the money collected in electricity bills is repatriated.

Zimbe said Umeme is not responsible for extending power to the rural areas.
“Umeme has fully complied and worked within the framework of the concession agreements and has not breached any provisions related to payments to Government,” he stressed.

“The concession agreements provided for a transaction fee of $1.4m payable to the Government at take-over in March 2005 in accordance with the contract.”

Under the concession agreement, Umeme will operate, maintain and manage power distribution for the next 20 years.
Zimbe said Umeme had neither made any dividend payments to shareholders nor expatriated funds.

He said between March 2005 and todate, Umeme had invested over $18m in the business which is more than the sum it was contractually obliged to spend.

Umeme contract unchanged

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