Members of Parliament have asked the Ministry of Energy and Mineral Development to conduct a study on the status and performance of energy distributor, Umeme as its concession ends.
Umeme’s concession granted in 2015 will end in 2025 subject to renewal. The total investments that Umeme has made as of December last year stand at US$547.5 million with a recovery of US$331.94 million. It is reported that there is US$215.6 million outstanding.
Although the Ministry of Energy sought Shs256.2 billion as part of the money to start the buyout in phases, MPs have recommended that the Government should focus on assessing the status of Umeme and its performance instead of looking for money for a buyout.
The Members of Parliament sitting on the Committee of Environment and Natural Resources were on Tuesday, 18 January 2022 meeting with the Minister of State for Energy, Hon Sidronius Okaasai Opolot and Permanent Secretary Irene Batebe to discuss the Budget Framework Paper for the financial year 2022/23.
In the meeting, Okaasai had asked the committee to support the Ministry with Shs256.2 billion for starting the payment process of the Umeme buyout. He said this would help Government manage the buyout effectively.
“This is a proposal we are making to make the final buyout simpler,” Okaasai said.
However, MPs questioned the request for the budget for the buyout.
Hon Elijah Okupa, the Kasilo County MP said that the previous Parliament had recommended for the termination of the Umeme contract because they did not meet the concession terms and conditions. He added that there is no need to concentrate on the buyout but focus on doing a study on the status and performance.
“There is a reason those who drafted the concession included the study in the 17th; they knew certain conditions had to be met. Has Umeme performed 100 per cent? That is why we needed an evaluation of the performance of Umeme,” Okupa said.
He said there is need to know if Umeme performed to 80 or 90 per cent, adding that the Ministry should be asking for money for the assessment and that the settlement would come in later.
The Committee Chairperson, Dr Emmanuel Otala said that providing for funds for the buy-out now is speculation adding that a study should be undertaken to inform further decisions. “We cannot begin budgeting for something we don’t know; it is important that a study is done that will inform the termination or progression of the concession,” he said.
Hon Paul Akamba, (NRM, Busiki County) said that, ow that Umeme is left with only three years, the concession in itself ensures that there should be an assessment’.
Irene Batebe, the Permanent Secretary, Ministry of Energy said that they were seeking the money to pay the buyout in installments pending a final decision from Parliament.
She told the committee that Government was planning to regulate further investments by Umeme to ensure Government does not have to pay a lot of money.
Okaasai agreed with the members and conceded on the proposal to halt the demand for funds the buyout and instead told the committee that they will progress with the study through the Office of the Attorney General.
“I would wish to concede that Umeme will continue investing and we are going to submit to the Committee of Budget for a study and we are proposing that the study be done by the Auditor General as we continue discussions with cabinet on the future of Umeme,” he said.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
