By KT Reporter
The Minister of Energy and Mineral Development, Ruth Nankabirwa has explained the changing figures of the Umeme buy-out. The Umeme buy out amount on expiry of a 20-year concession has been subject to public debate with section of MPs and the public saying that the costs were inflated by the company.
There has been growing anxiety among different people about the buyout figures of Umeme Limited, with many claiming that they are not consistent. The government through a loan from Stanbic Bank paid Umeme $118 million. While Umeme agreed handover to the government, it disagrees with the among and therefore is asking for more than the cost verified by the Auditor General
Speaking at the Umeme Limited asset handover to the Uganda Electricity Distribution Company Limited (UEDCL) at Lugogo on Monday, Nankabirwa said that the amount paid to the power distributor was an estimates because the concession was still running by the time it was computed.
Nankabirwa added that the Auditor General had to provide a provisional figure to enable her ministry to make request to the Ministry of Finance for a loan of 190 million US Dollars.
Nankabirwa also mentioned that they have followed the proper procedure, and the Auditor General provided a buyout figure, while Umeme had a different figure.
According to Nankabirwa, there will be a harmonization period between Umeme and the government starting on April 1st.
“In the Auditor General’s report, it was very clear that the figure given was not the conclusive one because there is work that Umeme is still doing,” Nankabirwa remarked.
She also mentioned that, according to the Auditor General’s report, the government was allowed to pay 118 million US Dollars while also planning to pay for incomplete Umeme work amounting to 9.78 million US Dollars, which the government recognizes as a liability to be cleared.
She added that there is a need to conclude the Umeme concession naturally because it is not a termination but the natural end of an agreement.
Umeme Limited issued a memo on social media saying that it expects 234 million US Dollars as opposed to $118 million it received from the government last week. URN has learnt that while Umeme Limited has made public statements in the media, it was yet to launch a formal claim for the balance of money.
Under the concession, Umeme is allowed 14 days within which to study the decision of the government and then determine to accept or refuse buyout sum. Umeme Managing Director, Selestino Babungi confirmed to URN that they yet to lodge a formal objection to the amount paid by the government.
“We put out our claim to the government, quickly they approved $118 million which they paid. As indicated by the Minister, we shall be reconciling to determine how much more they have to pay us” said Babunji.
The difference between what the government has been and what Umeme is demanding is as a result on the ongoing repair at Gaba and Mukono substations among others. Nanbirwa on the other hand hoped that the two parties should part ways peacefully since the concession came to its logical conclusion without a termination
Meanwhile, Dr. Sarah Wasagali Kanabi, the Board Chairperson of the Electricity Regulatory Authority (ERA), said that the authority has approved the end-user tariffs effective from April to June 2025, starting at midnight.
Wasagali mentioned that with the new tariffs, ERA expects demand to grow at an annual rate of 10.4 percent this year. She also said that the quarterly tariff adjustment methodology implemented since 2014 will continue to be in effect in 2025.
Additionally, Wasagali stated that ERA will continue to implement measures to reduce electricity end-user tariffs for manufacturers and continue with the declining block tariff structure for large industrial manufacturing customers for the tariff year 2025.
In a bid to encourage domestic users to cook using electricity, there will be a continued implementation of the domestic cooking tariff of 412 shillings per unit for between 81 and 150 units consumed monthly-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
