Current Affairs

Scandal: Umeme Officials In Trouble After Managers Purchase Fake Yaka Meters From China

Uganda’s power supplier Umeme is battling a multibillion scandal involving the procurement of counterfeit Yaka meters, which have seen many Ugandans risk their lives as they fix the faulty Yaka meters whenever they blackout, on top of paying exorbitant charges for electricity.

On top of blacking out any time, consumers are crying foul about these Umeme Yaka meters, complaining of how they often overcharge them for power compared to the old Yaka Meters which were purchased from South Africa.

We’ve learnt that alot of clients also complain that these Yaka meters often run out of batteries or simply stop working, thereby forcing them to incur extra costs of buying a new battery or hiring a technician to fix them.

As a result of the endless complaints pouring in at Umeme offices, we have learnt that the power distributor has since started sending out notices, pleas and warnings to their customers beseeching them not to tamper with the Yaka Meters whenever they black out.

One such notice was published by Umeme on social media recently and it reads; “What to do of your meter has a problem;
Do Not attempt to fix meter problems on your own as this could lead to damage of the meter and endanger your life and property. If you suspect a meter malfunction, please reach us using contact channels for guidance or visit the nearest Service Centre and apply for meter testing.”

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However, insiders reveal that the problem of Yaka meters that many Ugandans are facing started last year, when Umeme purchased a consignment of meters from China worth billions of shillings, from a company called HEXING Electrical Company limited, in a bid to connect more Ugandans onto the national power grid.
But when the Yaka meters were flown to Uganda, they were subjected to tests by the Uganda National Bureau of Standards (UNBS), and results were that the Yaka meters did not conform to the recommended standards and that they had to either be returned to the manufacturer to fix them or be destroyed.

Another option was to fly them to South Africa, and contract another company to fix the faulty meters from China, which Umeme refused because of the costs involved, so instead of destroying the fake Yaka Meters, they started selling them to Ugandans.

The research by UNBS revealed that 35% of the electricity meters used by industrialists and large commercial set-ups are inaccurate and susceptible to cheating manufacturers. The research, conducted during the 2017- 2018 financial year, also indicated that 15% of meters used by domestic consumers were inaccurate and susceptible to cheating customers.

The quality standards body came up with the figures above after verifying 144,471 meters against a target of 100,000 meters.

Dr. Ben Manyindo, who was the UNBS Executive Director then, made the revelation while addressing journalists at Uganda Media Centre in Kampala.
Meanwhile, the demand for Yaka meters from millions of Ugandans who had applied for power connection was piling and complainants were becoming overwhelming, so Umeme appeared as if they were frustrating President Yoweri Museveni’s objective of connecting more Ugandans onto the National Power Grid.

Insiders reveal that after realizing that it would be costly both in money and time to fly the Yaka meters back to China for fixing, shrewd Umeme officers decided to distribute power to Ugandans with meters they knew were faulty, but there was no other option.

A few months down the road the Yaka meters in people’s homes have started jamming and many customers are bombarding Umeme with calls to complain about their meters jamming, although it seems the problem is not about to be solved in the near future because whenever a news agency publish the rot in Umeme, it’s management quickly rush to distance selves from the allegations instead of solving the problem.

It should be noted that by the time of filing this story, panicky Umeme officials had already released a statement distancing selves from allegations as Ugandans continue to suffocate.

It should however be remembered that during Umeme’s 6th Annual General Meeting in May 2019, Patrick Bitature, the Chairman, Board of Directors of Umeme revealed that the power distributor was optimistic of getting a new concessional deal by end of the year (2019).

However, Speaking to Ugandans during 58th Independence Day celebrations held at State House Entebbe, President Museveni revealed why he has refused to renew umeme’s contract. “We are working hard to evacuate power from Karuma dam to manufacturing hub and export excess power. There is a group called Umeme. These are private people who want to make high profits. Can you make high profits from bone marrow and then we survive? We are debating that. If you are looking for high profits, there are areas you can go to; invest in clubs, casinos I will not follow you,” Museveni said.

He added that there are people who have been pushing him to approve Umeme’s concession, but he has refused to bow down to their pressure. “…when it comes to electricity, this is a strategic issue. We now have enough electricity, it can be sold cheaply to the manufacturers but people who want to make business are the ones pushing up,” said Museveni.

However, this wasn’t the first time President Museveni expressing his disgust at Umeme.

In March 2018, he wrote a letter warning the Ministry of Energy against renewing Umeme’s concession arguing that the country should be looking for cheaper ways of modernising and expanding the distribution and distribution lines.

Museveni tasked the Ministry of Energy as well as Ministry of Finance to furnish him with details regarding financial reports by Umeme’s of the losses the company was incurring and the investments the entity had undertaken in the country.

The President wrote: “I am now directing you to furnish me with the explanations on all these matters. In the meantime, there should be no question of renewing Umeme’s concession. By copy of this letter, I am also directing the Inspector General of Government to look into these issues.”

The President’s decision to cancel Umeme’s concession was informed by the 2017 audit report by the Auditor General, John Muwanga that indicated that Government lost approximately Shs129Bn to Umeme in depreciation and return on asset since Government entered into contract with the electricity company.

Why Umeme Contract Is Bad For Ugandans, Good For Shareholders

If there is any deal that has been negotiated badly on earth, it is a concession between Umeme and Uganda government to manage power distribution in 2005.

Former Permanent Secretary at Ministry of Energy, Kabagambe Kaliisa was at the center of negotiations of this deal.Among the mind blowing clauses of the concession that put Uganda in a tight corner include; The Government is obliged to pay 120% of the total Umeme investment should the government initiate termination of the contract.

On the other hand, in case Umeme chooses to initiate the termination of the contract, the Government is still obliged to pay 80% of the total Umeme investment. What a deal!..

It was also agreed that in the event of natural termination of the contract, government would have to pay 105% of the amount Umeme invested at the time of termination, which would be over Shs294bn.

Natural termination of the contract is when the contract expires and the contractor (Umeme) claims they have not recouped their total investments.

The agreement also reveals that in case of termination of the contract due to circumstances beyond the control of both parties (Force Majeure), government pays 90% of the invested money.This would be not less than Shs252bn. Such circumstances include war, riot, strike, crime, flooding or earthquake or volcanic eruptions.

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The contract also obliges the Government to pay an interest of 20% per annum of any outstanding portion of the buyout amount should 91 days elapse after the termination date until it clears the money in full. The other clauses that gave Umeme a blank cheque are Section 2.1 (U) (ii) of the Lease and Assignment Agreement, which states that should Umeme be indebted to, say its Ugandan shareholders by the time of terminating the agreement, the government will either pay off or cancel the debt(s).

Section 9.5 of the Support Agreement removes the immunity of the government from claiming its assets in case Umeme brought any legal proceedings against it.The contract is heavily skewed in Umeme’s favour, a thing that has made it very hard for Parliament to terminate the distributor’s concession despite the fact that it has become a pain in the lives of Ugandans.

During the agreement, former Finance Minister Gerald Sendaula signed on behalf of the Government, Irene Muloni, the former Energy Minister signed for Uganda Electricity Distribution Company Ltd (UEDCL) as the managing director, while former director David Grills signed on behalf.

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