Bad debts overwhelm UMEME
Nov 09, 2009
POWER consumers’ failure to pay bills is to increase UMEME’s bad debt write-offs. The power utility is demanding about sh60b from over 19,000 defaulters across the country.
By Ibrahim Kasita
POWER consumers’ failure to pay bills is to increase UMEME’s bad debt write-offs. The power utility is demanding about sh60b from over 19,000 defaulters across the country.
Apart from the 19,000 defaulters, it is also estimated that about 30,000 people use power illegally.
UMEME, in a desperate move to recover the debts, two weeks ago threatened to take legal action against the defaulters if they do not clear their bills within seven days (which expired on October 28).
However, as at November 3, the firm had only recovered sh800m out of a total of sh60b.
“Publishing names of defaulters is part of our bad debt write-off process required by the Uganda Revenue Authority,†Charlotte Kemigyisha, the firm’s head of communication, said.
“It serves as a notice and will enable us take the next step in the process, which is disconnection of power supply.†There were concerns that the exercise (debt collection) would keep UMEME’s expenditure high. This would later be transfered to the end-users.
Kemigyisha said the legal team, Kampala Associate Advocates, would sue clients with outstanding debts above sh5m to recover the money if they do not pay in time.
“Arrangements have been finalised.
“The legal firm will start the disconnection process today (November 3) and also demand that customers make arrangements to pay,†she said.
Before electricity supply is disconnected, Kemigyisha explained, an account is forwarded to the debt collector once it has arrears exceeding 60 days, for action.
“If we still do not hear from these customers, they will be informed that their accounts will be closed.â€
“They will thereafter have to apply afresh to have power supply restored in addition to clearing the debt,†she said.
Where all the above steps have been taken and still the money is not recovered, the balances are then considered for write-off as a last step in the process.
Among the list of defaulters are individuals, district local governments, municipal councils, hospitals, education institutions, government departments, hotels and churches.
Although UMEME claims that its collection rate stands at 93.6%, failure to collect the sh60b is a testimony that the Electricity Regulatory Authority should monitor and audit the firm’s assertions.
POWER consumers’ failure to pay bills is to increase UMEME’s bad debt write-offs. The power utility is demanding about sh60b from over 19,000 defaulters across the country.
Apart from the 19,000 defaulters, it is also estimated that about 30,000 people use power illegally.
UMEME, in a desperate move to recover the debts, two weeks ago threatened to take legal action against the defaulters if they do not clear their bills within seven days (which expired on October 28).
However, as at November 3, the firm had only recovered sh800m out of a total of sh60b.
“Publishing names of defaulters is part of our bad debt write-off process required by the Uganda Revenue Authority,†Charlotte Kemigyisha, the firm’s head of communication, said.
“It serves as a notice and will enable us take the next step in the process, which is disconnection of power supply.†There were concerns that the exercise (debt collection) would keep UMEME’s expenditure high. This would later be transfered to the end-users.
Kemigyisha said the legal team, Kampala Associate Advocates, would sue clients with outstanding debts above sh5m to recover the money if they do not pay in time.
“Arrangements have been finalised.
“The legal firm will start the disconnection process today (November 3) and also demand that customers make arrangements to pay,†she said.
Before electricity supply is disconnected, Kemigyisha explained, an account is forwarded to the debt collector once it has arrears exceeding 60 days, for action.
“If we still do not hear from these customers, they will be informed that their accounts will be closed.â€
“They will thereafter have to apply afresh to have power supply restored in addition to clearing the debt,†she said.
Where all the above steps have been taken and still the money is not recovered, the balances are then considered for write-off as a last step in the process.
Among the list of defaulters are individuals, district local governments, municipal councils, hospitals, education institutions, government departments, hotels and churches.
Although UMEME claims that its collection rate stands at 93.6%, failure to collect the sh60b is a testimony that the Electricity Regulatory Authority should monitor and audit the firm’s assertions.