Mukono, Jinja: Who should gain from Bujagali dam?

Aug 27, 2008

Leaders of Mukono and Jinja district are at loggerheads over the entitlement of royalties from the multi-billion Bujagali power project.

By JOel ogwang

Leaders of Mukono and Jinja district are at loggerheads over the entitlement of royalties from the multi-billion Bujagali power project.

Surprisingly, the issue has come up even before the first unit of electricity is produced.

Location
The major point of contention is the location of Bujagali; is it in Mukono or Jinja? The site is located 8km from the source of the Nile on Lake Victoria. As a hydro-power facility, the dam will re-use the water flowing from the upstream power plants (Nalubale and Kiira) to generate additional electricity.

Construction
Initially, construction of the $530m plant was supposed to kick-off in 2003, but was delayed after protests from environmentalists and residents over its ecological and bio-diversity dangers.

In 2007, however, President Yoweri Museveni and the Aga Khan, Prince Karim al-Hussaini, the spiritual leader of the Ismaili Muslims, laid a foundation stone for the hydro-power dam on River Nile.

Earthwork and construction of the plant have started. Electricity production is expected to start in 2010.

The completion of the dam is expected in June, according to the energy and minerals development ministry. Bujagali will, upon completion, produce 250 Megawatts of electricity.

Wrangles
Francis Lukooya, the Mukono LC5 boss and his Jinja counterpart Hannington Basakana, are fighting for 100% share of royalties from the Uganda Electricity Transmission Company Ltd when power production starts.

Lukooya argues that when the decision to build the plant was first fronted, Jinja residents objected to its location in the district.

The facility was proposed by Bujagali Energy Ltd, a company jointly owned by affiliates of Sithe Global Power, LLC and the Aga Khan Fund for Economic Development.

Lukooya says the foundation stone for the Bujagali plant is in Wakisi sub-county and geographically lies in Mukono.

Lukooya says Mukono and Jinja share royalties from the Owen Falls Dam Project on a 60%-40% basis, respectively, The royalties are advanced in a four quarters annually. “Mukono gets sh16m per quarter,” says Lukooya.

However, Basakana says: “Lukooya is not even sure of the figures. Jinja gets 60% of the royalties.” He adds that the 1962 Constitution clearly indicates the boundaries of the two districts. “Our boundary between Busoga and East Mengo on the western and eastern banks of river Nile is clear,” says Basakana.

I do not know what Lukooya’s problem is! Whether or not Jinja supported the construction of the plant does not move it from Jinja to Mukono,” Basakana says. “I received a letter from Lukooya saying Mukono supported the construction and is entitled to 100% royalties. This is unfortunate.”

What is a royalty?
It is a form of recognition that the area from which a resource is got, is rewarded. According to the Electricity Act, 1999, districts where electricity is generated are entitled to royalties. While the Act empowers neighbouring districts to share the royalties, the district with a bigger part of the project gets a bigger percentage, usually up to 75%. The production firm declares the amount of resources in the area. The Government then ascertains if the figures are correct. The firm passes the royalties to the Government, which passes them on to the districts.

Sharing royalties fronted
According to James Kunobwa, the Mukono district speaker, Basakana is unreasonable. “Mukono agreed to go ahead with the construction,” he says. The estates housing the Bujagali builders are in Mukono and over 50% of River Nile lies in Mukono. “We have to share the royalties,” Kunobwa says. “No district can claim ownership of the whole project.”

Government position
Energy minister Daudi Migereko says royalties from the project will have to be shared as per the Electricity Act. “Mukono and Jinja will share royalties because the project impacts both districts.”

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