KAMPALA, UGANDA: Businessman Patrick Bitature who is also the Board Chairman UMEME Ltd a power distributing company has revealed that the senior management did their best to have their 20-year contract renewed, but government had other ideas.
Mr Bitature who was addressing the press on Friday said in the most recent discussions with officials from the Ministry of Energy, they were tasked to explain what Umeme was going to do if the concession is renewed that “government couldn’t do itself.”
“We explored the option to extending the concession as the law says, but because this is the government’s prerogative, they asked us what we were going to do in the next 20 years which government can’t do itself,” Bitature said.
“So, they then told us to wait for a while as they discussed among themselves, and eventually cabinet sat last week and decided not to extend.”
UMEME Woes
Umeme had long been accused by President Yoweri Museveni of keeping the cost of power in Uganda very high, which has affected the manufacturing industry, some Bitature says was not entirely Umeme’s fault.
“We have been running power distribution as a business to ensure that we are efficient, but as you know, we are not the ones who determine the power tariff. It is the regulator who does that every year,” he said.
Regarding the fate of the current employees of Umeme, Mr Bitature said government was unlikely to get rid of all of them, save for a few people including himself at the top management.
“I don’t think they are going to fire everybody in Umeme to bring new people; I don’t think it will get to that,” he said.
“Maybe people like me as chairman will have to go because I have been here for 10 years, so the time has come for other people to come in. But the workers of Umeme who are doing a good job, I think they will retain their positions,” he added.
Nonetheless, Bitature says Umeme has done a tremendous job over the past two decades in cutting down power losses through theft, and expansion of coverage across the country.
“We have been able to build over 44000kms of power lines which were not there. At the time we came in there were only 200,000 customers, now we have over 1.5 million,” he said.
“When we came, the losses were very high and we brought prepaid meters and most of the customers are now paying.”
Plans to create National Electricity Company
Yesterday, the Ministry of Energy and Mineral Development announced that it has commenced the process which will among others, see the creation of a state-owned entity that will run the country’s power sector after the exit of Umeme, and power generators Eskom Uganda Ltd.
Minister Ruth Nankabirwa said a transition phase had been launched, which will see the formation of a company named Uganda National Electricity Company Limited (UNECL).
This state-run entity, she says, will have majority shareholding under a Public Private Partnership (PPP) arrangement.
“On behalf of the Government of Uganda, I take this opportunity to appreciate UMEME and Eskom for the Operation and Maintenance of the Government assets on behalf of UEDCL”
The Minister noted that the electricity distribution network under UMEME covers a large percentage of the country, has grown in asset capacity and complexity and employs about 2,000 staff. “To this effect, I call upon the parties to the concession agreements to ensure a smooth transition of all the relevant responsibilities and asset handover in close coordination with this Ministry,” Said Nankabirwa
She said the Ministry would spearhead the transition process and engage all concerned parties, including the shareholders, to ensure that the Government of Uganda’s decision to end the concession naturally is executed reasonably.
The Ministry has already constituted a Joint Committee to handle the Eskom Concession and is in the process of making a similar arrangement for the UMEME concession. The respective Committees are tasked with the planning and management of the end of the concessions to ensure seamless handover of the operations of the assets.
“Government is committed to avail the necessary financing to ensure it fulfills its obligations in the related agreements,” elaborated Irene Bateebe, the Permanent Secretary in the Ministry.
“UEDCL and UEGCL will be supported to enable them to manage the transition period and operation of the concessions as happened with the 50MW Namanve Thermal Power Plant that has reverted to UEGCL in 2021.”
The Permanent Secretary said the Ministry, with the support of the Auditor General, would undertake a valuation of the companies’ investments to determine any outstanding obligations by Government.
A statement from the Ministry says the reforms are expected to minimize expensive private capital in the electricity sub-sector investments in generation, transmission and distribution.
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