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EXPOSED: How UETCL spent Ugx1bn to hire 37 new staff

Mr Joshua Karamagi, the UETCL managing director has defended the billion expenditure on hiring the new 37 staff (Photo/Courtesy)

KAMPALA, UGANDA: The Uganda Electricity Transmission Company Ltd (UETCL) is a subject of an investigation by the Inspectorate of Government (IG) over a mouthwatering Shs1 billion deal splashed on hiring 37 new staff at the government-owned power transmitter.

The IG earlier this week said they had launched an investigation to ascertain the circumstances under which the agency which is funded by the taxpayers’ money injected more than a billion on a questionable recruitment deal.

Ms Patricia Achan Okiria, the deputy IGG confirmed to this publication that an investigation has been sanctioned, but declined to give details, saying it would jeopardise the exercise.

“We have kicked off an investigation on that and I don’t want to talk about it, I would love to talk to you about the matter once the information is ripe,” Ms Okiria said yesterday evening.

“The motive of spending that huge amount of money to hire a few people is questionable, even if that company has a fully-fledged human resources department that we are informed is capable of handling the assignment,” she added.

Background of the story

The story which was uncovered on Monday by DailyMonitor exposed how UETCL had gone ahead to spend a hefty sum of money on recruitment indicating that Klynveld Peat Marwick Geordeler (KPMG), a multinational human resource consultant which won the contract for hiring the new staff cost the government agency Shs27m per person.

The contract, which was signed on June 15, 2023, by then UETCL’s acting company secretary Martin Erone, and Ms Judith Erone, the authorised representative of KPMG indicated that UETCL would pay the consultant Shs1,046,495,000, inclusive of VAT 18 per cent.

The Newspaper further quoted sources briefed on the matter describing that the ‘dubious’ expenditure contained in internal memos as unnecessary, and argued that UETCL’s human resources department should have conducted the exercise for free or minimal cost.

A further breakdown of the contract’s total cost showed how one KPMG official would pocket Shs6.66m per day for 33.6 days, translating to Shs210.5m at the end of the 12 weeks contract period.

Energy minister Ruth Nankabirwa (2nd right) and members of the UETCL Board at Olwiyo Sub-station in Nwoya District on March 23, 2023. PHOTO/DM

Another official would pocket Shs3.7m per day, translating to Shs254.2m for the 68.7 days he would participate in the recruitment exercise. The financial management expert would pocket Shs2.22m per day, totalling Shs59.5m for 26.8 days.

Furthermore, an electrical engineering expert would walk away with Shs48.8m for 22 days, for which he would earn Shs2.22m per day while the pool of support staff would take Shs1.85m a day, totalling Shs248.4m for the 134.26 days they are engaged in the exercise.

Meanwhile, officials would take a total of Shs821.4m, the budget in VAT-inclusive (18 per cent), amounting to Shs147.9m, and an additional Shs77.2m in miscellaneous expenses.

Under the contract’s miscellaneous budget, KPMG planned to spend Shs3.7m on stationery, printing and administration, Shs36.9 million on psychometric assessment of an estimated 111 candidates at Shs333,000 each, and Shs1.29m on technology and communication costs.

The company also planned Shs370,000 on local transport, advertisement at Shs16.6m and another Shs18.3m for an interview venue for 11 days at Shs1.7m per day.

Before signing the contract, KPMG also explained that the rate offered to UETCL was already discounted.

KPMG, which boasts of a global network also gave examples of recent similar assignments at the Ministry of Energy and Mineral Development, and Uganda Energy Credit Capitalisation Company (UECCC) where the average rates were $8,000 (Shs29m) per position, exclusive of taxes and disbursements.

UETCL Speaks

When contacted for a comment on the matter, Mr Joshua Karamagi, the UETCL managing director took defence of the expenditure and said that the decision to work with KPMG was due to the incapacity of its human resource department to conduct the exercise.

“Why KPMG, we have gaps in our human resource department (and at the moment) there is no substantive human resource manager. To recruit 37 positions. The total estimated time by the professional [KPMG] firm is three months and a dedicated UETCL could take up to six months yet most positions have been vacant for a year,” Karamagi is quoted to have told the Newspaper on July 14.

He added; “They (KPMG) have just successfully recruited about 45 for the scale access project in the Ministry of Energy at a higher unit cost than what we gave them. All positions are open to our internal staff.”

Parliament Intervenes

The Parliamentary Committee on Energy and Natural Resources yesterday (Tuesday) quizzed the management of UETCL over allegations of mismanagement and the exorbitant recruitment programme.

Mr Emmanuel Otala, the committee chairperson, said: “Last Wednesday, we scheduled a meeting with the UETCL management and one of the agenda was the issue of the recruitment irregularity, but we postponed it to today (Tuesday) and we have been having a committee hearing on that matter.”

He said the committee received a petition from former workers of UETCL, through the Speaker of Parliament, claiming their contracts were erroneously terminated while alleging mismanagement by the company’s top management.

“We have heard from the management this afternoon and we are going to have a hearing from the petitioners on Tuesday next week. Once we engage them, we shall meet the company’s board of directors before making a conclusive report,” Mr Otala said.

About KPMG

KPMG was formed in 1987. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services.

The firm operates in 143 countries and territories. It serves the needs of business, governments, public-sector agencies, not-for-profits and through KPMG firms’ audit and assurance practices, the capital markets. 

It provides audit, tax and advisory services.

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