Salim Saleh heads electricity scam probe
Jul 16, 2009
GEN. Caleb Akandwanaho, known as Salim Saleh, has been appointed chairman of a special committee to investigate the current power tariffs with a view to bringing them down.
By Mathias Mugisha
GEN. Caleb Akandwanaho, known as Salim Saleh, has been appointed chairman of a special committee to investigate the current power tariffs with a view to bringing them down.
At the same time, the contract of Aggreko, the thermal power producer, which is bridging the power shortfall, has been reduced to six months as investigations into allegations of inflated power tariffs intensify.
Earlier this month, the Electricity Regulatory Authority (ERA) had extended Aggreko’s contract by one year, in defiance of a directive by Energy minister Hilary Onek.
In a July 14 letter, Onek said the appointment of the Saleh committee followed “a long time public outcry on electricity tariff, which is negatively affecting not only domestic consumers but also the manufacturing sector and the economy generallyâ€.
The probe will examine elements in the current tariffs that can be brought down immediately as the sector is being restructured, the letter to ERA board chief Ben Dramadri said.
The restructuring, Onek explained, is meant to “eliminate the current inefficient and wasteful management structure that has become a burden to electricity consumers and the national economy.â€
The letter, copied to President Yoweri Museveni and finance minister Syda Bbumba, appointed Muyanja Mbabali, a private consultant in Kampala, as the vice-chair of the probe committee.
It will also have a secretary and a legal adviser, as well as a representative from the Uganda Manufacturers’ and the Uganda Electricity Consumers’ associations. It is supposed to finalise its work in one month.
In a separate letter, Onek has accused ERA chief executive officer Frank Lubowa of insubordination by introducing other costs and extending Aggreko’s contract by one year, contrary to the ministry’s directive.
“I am really disappointed that in the extension proposal, you increased capacity charge, fuel logistics and other costs when we are working to bring down costs,†Onek said.The minister complained that Aggreko charges have surged to 44 US cents per kilowatt hour (kWh).
“You have decided to increase costs in order to make Aggreko earn what they would have received in one year. Incredible!†the letter said.
“Let us have mercy on our electricity consumers. Your action to me is gross insubordination and I would want a satisfactory explanation before a resolution on ERA’s performance.â€
Uganda’s electricity tariffs are currently the second-highest in the world, after Sweden which charges 26.2 US cents per kWh.
Despite huge government subsidies to keep the rates down, Ugandan consumers pay on average 24 US cents per kWh.
According to the agreement, besides sh92b subsidies annually, the Government also pays for the power losses, which amount to between sh8b and sh11b a month.
Asked for a reaction, Sebowa said he had simply communicated the board’s decision to extend Aggreko contract by a year to avoid more load-shedding.
On the increased Aggreko tariffs, Sebowa said the rates varied according to fuel prices, inflation and foreign exchange rates.
“We have a formula that was agreed upon by the Government which we use to adjust the tariffs,†he said.
GEN. Caleb Akandwanaho, known as Salim Saleh, has been appointed chairman of a special committee to investigate the current power tariffs with a view to bringing them down.
At the same time, the contract of Aggreko, the thermal power producer, which is bridging the power shortfall, has been reduced to six months as investigations into allegations of inflated power tariffs intensify.
Earlier this month, the Electricity Regulatory Authority (ERA) had extended Aggreko’s contract by one year, in defiance of a directive by Energy minister Hilary Onek.
In a July 14 letter, Onek said the appointment of the Saleh committee followed “a long time public outcry on electricity tariff, which is negatively affecting not only domestic consumers but also the manufacturing sector and the economy generallyâ€.
The probe will examine elements in the current tariffs that can be brought down immediately as the sector is being restructured, the letter to ERA board chief Ben Dramadri said.
The restructuring, Onek explained, is meant to “eliminate the current inefficient and wasteful management structure that has become a burden to electricity consumers and the national economy.â€
The letter, copied to President Yoweri Museveni and finance minister Syda Bbumba, appointed Muyanja Mbabali, a private consultant in Kampala, as the vice-chair of the probe committee.
It will also have a secretary and a legal adviser, as well as a representative from the Uganda Manufacturers’ and the Uganda Electricity Consumers’ associations. It is supposed to finalise its work in one month.
In a separate letter, Onek has accused ERA chief executive officer Frank Lubowa of insubordination by introducing other costs and extending Aggreko’s contract by one year, contrary to the ministry’s directive.
“I am really disappointed that in the extension proposal, you increased capacity charge, fuel logistics and other costs when we are working to bring down costs,†Onek said.The minister complained that Aggreko charges have surged to 44 US cents per kilowatt hour (kWh).
“You have decided to increase costs in order to make Aggreko earn what they would have received in one year. Incredible!†the letter said.
“Let us have mercy on our electricity consumers. Your action to me is gross insubordination and I would want a satisfactory explanation before a resolution on ERA’s performance.â€
Uganda’s electricity tariffs are currently the second-highest in the world, after Sweden which charges 26.2 US cents per kWh.
Despite huge government subsidies to keep the rates down, Ugandan consumers pay on average 24 US cents per kWh.
According to the agreement, besides sh92b subsidies annually, the Government also pays for the power losses, which amount to between sh8b and sh11b a month.
Asked for a reaction, Sebowa said he had simply communicated the board’s decision to extend Aggreko contract by a year to avoid more load-shedding.
On the increased Aggreko tariffs, Sebowa said the rates varied according to fuel prices, inflation and foreign exchange rates.
“We have a formula that was agreed upon by the Government which we use to adjust the tariffs,†he said.