East Africa

Uganda MPs vote against Umeme, Eskom

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By a unanimous vote yesterday, Parliament adopted a resolution urging government to cancel its contract with power companies Umeme and Eskom.

Umeme Limited is the power distributor while Eskom holds the power generating contract.

The resolution against the companies was passed after MPs debated, for the second day running, the findings of the Ad hoc committee set up more than a year ago, to review the activities of the energy sector.

Among its key recommendations, the committee, chaired by West Budama South MP Jacob Oboth-Oboth, called for the termination of the contract government signed with Umeme in 2004. Prime Minister Amama Mbabazi tried but failed to dissuade the House from adopting the recommendation. He  argued that termination would have severe consequences.

“This issue came to cabinet and we considered it because the agreement was not favourable to Uganda, we [cabinet] asked the Attorney General [Peter Nyombi] to go and review the agreements, not only this one but even others and come up with a report,” Mbabazi said.

He said Nyombi came up with a partial report that warned against termination. Mbabazi urged the MPs to be mindful of the message they would be sending out to the investors if they cancelled the Umeme contract.

According to the committee report, the country is bound to lose $147.6 million (Shs 371bn) if government terminates the contract now. If the termination of the contract was initiated by Umeme, the government would still pay $129.5 million (Shs 325.7bn). Worse still, if the contract naturally comes to an end, the government would still pay $98m (Shs 245bn).

Either way, MPs argued, Ugandans would suffer the consequences, thus a termination was a better option since it is likely to save the country a loss of at least Shs 14 trillion throughout the 25 contractual years. NRM MPs were the most outspoken, including especially former ministers Kabakumba Matsiko (Bujenje), Kasirivu Atwooki(Bugangaizi West) and Anna Maria Nankabirwa (Kyankwanzi Woman).

And when Fox Odoi (West Budama North) moved that the matter be put to a vote, the government front bench sat completely isolated.

“Honourable Prime Minister, for us as Parliament we have done our part, it is now up to you in government to begin from there,” Speaker Rebecca Kadaga told Mbabazi after the resolution was passed.

Earlier, the House also resolved to hold former Energy minister Hilary Onek personally and politically liable for the irregular appointment of the Electricity Regulatory Authority (ERA) board.

“Considering the manner in which this board was constituted, it is clear that there was a conflict of interest and abuse of office on the part of Engineer Hilary Onek. We should demonstrate that we are above protecting people because of certain political interests; let Parliament pronounce itself that [Onek] be held liable for the mistakes,” Nandala-Mafabi (Budadiri West) said.

In response, Eskom through its Corporate Affairs Manager Simon Kasyate said: “We take great exception to the recommendation of this ad hoc committee report which terminates the operations of Eskom in Uganda.

We are, however, confident and aware of the fact that parliamentary resolutions such as this one are only advisory to government and not compulsory and so we are banking on government, who, with their technical knowhow, will evaluate this recommendation and keep our contract running.”

Kasyate said it was “only government at this moment which appreciates the quagmire this parliamentary resolution bestows on the Ugandan [power] sector.”

Eskom, he said, remained committed to its concession agreement with government and would continue to produce electricity.


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