Energy officials fail to account for Shs120 billion

Abdu Katuntu (chairman, MP Bugweri County): How much money do you hold on that account as of now?
Prisca Bonabantu (undersecretary/accounting officer ministry of Energy): Shs21.3b
Katuntu: What was the comment of the Auditor General in his last report about this?
Bonabantu: I am not aware of any comment from the Auditor General about this.
Katuntu: You have been the accounting officer for how long?
Bonabantu: I have been accounting officer since April 2016.
Katuntu: Colleagues, we have an issue that will need the Auditor General to audit these funds and to see what is going on. I don’t want to go in an area where we will require a lot of technical input and professional auditing.
As it is now, we find it irregular. The statutory ring-fencing is like the oil revenue when we established the Petroleum Fund. But if you got some money and you now cannot establish whether it was used in the Petroleum Fund or the budget.
After coming into force of these power companies, what is their role vis a vis the supervision of these projects. We must harmonise some of these problems.
Abraham Byandala (Katikamu North): I am wondering why they opted to have a management contract in preference to a supervision contract. The civil engineers are the ones who work on the dams. And in Energy, you have a skeleton of civil engineers. Why did you leave supervision to yourselves and outsource just management?
Katuntu: Were you in place then as generation?
Valentine Katabira (deputy CEO, UEGCL): We have been in place since 2001. Like you all know, the contractor at Karuma and Isimba and the consultants were all produced by the ministry of Energy and that is why they continued with a supervisory mandate.
Katuntu: And what was your role as UEGCL?
Katabira: We were appointed the implementing agency of these projects in 2013.
Katuntu: Do not take me to 2013. I want to take you back. What was your role?
Katabira: Our role was to oversee the generation facilities on behalf of government after disbanding the Uganda Electricity Board (UEB).
Katuntu: You were supposed to oversee and ministry of Energy was overseeing?
Katabira: Ministry of Energy was overseeing the two projects of Karuma and Isimba but we were overseeing the Nalubaale and Kiira hydro-power projects that had already been developed.
Katuntu: Why was it that they were overseeing these projects and not that one?
Katabira: I am not very sure but it was either a policy that the ministry takes over the two projects…
Katuntu: It was a power struggle.
Byandala: In your view, do you think the ministry has capacity to supervise a multi-billion dollar project?
Katabira: In my view, the answer is no and that’s why I think they appointed implementing agencies to help them oversee the projects.
Byandala: Do UEGCL and UETCL have the capacity to supervise all these projects?
Katabira: We did not have enough capacity to supervise these projects and on the side of UEGCL, we procured Project Management Consultants to help us supervise the projects.
Katuntu: That was after?
Katabira: That was in 2015.
Byandala: You know, if you hire someone for management, he is actually overseeing the consultant to see if the contractor is working properly. You can’t just hire him to supervise a weakling, why should he spend money?
So if there is no internal capacity in Transmission, Generation and ministry, and they didn’t even bother to outsource supervision. Do you think it was wise to get a management consultant?
Katabira: In the circumstances, it was necessary, but under normal circumstances, that shouldn’t have been the case. But the circumstances under which we were operating, I think it was absolutely necessary.
Katuntu: If I want to put it at ease and in simple language, this wasn’t normal circumstances.
Katabira: Yes.
Katuntu: This issue is a little bit big and we are going to look at the root cause and eventually look at all these funds which are being accounted for from 2013 to 2017, it is Shs1.7 trillion. We shall go into details to know if the supervisors have capacity.
We are going to go through all this, I just want you to be patient and know that at the end of the day, every penny will be accounted for.
Cuthbert Mirembe (Kibaale County): I need clarification from the ministry, she has told us that they received Shs120b in 2013/14 of which you only utilised Shs20b and you have told us that you have a balance of Shs21b.
However, I have seen the ministry of Finance give you more money in the subsequent years for the same activity. So I want to know whether you initiate request for these additional funds or the ministry of Finance is just good enough to give you money in the subsequent years.
Bonabantu: I told you that this money is for lands, compensation of the project affected persons, it is for supervising consultants.
Of course, it isn’t enough since 2013/14 to date, and we always budget and request ministry of Finance to add more money to other energy infrastructure related activities which aren’t necessarily those I have talked about.
That is why you see that in 2015/16, there is the issue of advance payment, there is the issue of management, there is the issue of the escrow account, supervising consultants of construction and supervision works, environmental impact assessments among others.
Katuntu: I don’t know if we would have a useful meeting with these gentlemen by us having to go through page this and so on. I think we needed some time to study these tables.
You know if you had sent these documents early, because some answers could be actually in the tables and then we are asking the question. Though it would help us analyse these tables and see if they make sense.
I hope you didn’t do it deliberately to say that we go with the documents today, after all they will not have time to go through them.
Bonabantu: No, that was not our intention.
Katuntu: But you know that we aren’t having proper time to analyse this. Because we can’t. We really can’t.
Bonabantu: Apologies for that chairman.
Katuntu: I was suggesting strongly, that we have another meeting with Auditor General, with ministry of Finance, Energy and so on, before we meet these people. Otherwise as we do right now, we may not make any progress.
I think we can go through these figures with Auditor General, we harmonise them with figures of ministry of Finance and then we can have a useful interaction. As of now, I don’t think we are making any progress because we are just making an eye conversation.
Takirwa: I suggest that as we meet the Auditor General we get a copy of the report of the financial years.
Katuntu: That will be internal. We are going to meet and request what we need from them. Ladies and gentlemen, we are in a little bit of a difficult situation, we would like this interaction to be more useful for us to appreciate these figures and we have to go through them.
My view is that we are going to put on halt this meeting to look at the figures you have given us, to harmonise with the figures from ministry of Finance and harmonise with the Auditor General.
If it is necessary, we may send the Auditor General to you, to come and do a quick study of these and he just gives us a report and then we shall discuss the report with you.
But we are yet to take a decision, one way or the other because we want to analyse these things quite professionally, I must say. So on this particular one we are sorry, I hope you appreciate our challenge.
Katuntu: Madam accounting officer, you did forward to us the accountability of the Non-Tax Revenue some time back, yes?
Bonabantu: Yes.
Katuntu: There are one or two issues we would like to seek clarification on. How many production licences have you issued?
Bonabantu: I am sorry I can’t give the exact number, but I recall that in August 2016, we issued eight. I need to crosscheck the facts.
Katuntu: This is information you should have on your fingertips. You need to consult your colleagues. That is why the minister should have been here. Is there any revenue accruing to government from these production licences so far?
Bonabantu: Revenue has accrued from the production licences, but unfortunately I can’t give the exact figures now. I would request that I go back and get the exact figures and send them over.
Katuntu: Okay, in your submission, did you indicate any revenue accruing as a result of these production licences?
Bonabantu: I want to request that I go back and check.
Katuntu: This document came from you and you signed it!
Bonabantu: Yes I did.
Katuntu: And I am asking about the document. You want me to give it to you? You do not have it? You want me to give you the chairman’s file? Is there any revenue which is accruing? Madam Bonabantu, if you ever want to appear before this committee, come prepared. This sort of thing does not augur well. We create headline for nothing.
Bonabantu: I am sorry I think I need further scrutiny of these documents.
Katuntu: You need further scrutiny of your own documents? That document is yours.
Byandala: I want to tell my friends here that we are not against you. We just want to make improvements for this country. To you as technical officers, it reflects badly for you to know less than the politicians.
We have interacted with Hon Simon D’Ujanga [Energy State minister] and Hon Irene Muloni [Energy minister]. They have a lot of knowledge and these are just politicians. They have a lot of information more than you technical people.
I think you have to improve and no wonder the projects are facing a lot of problems. When we tell you how the projects are being run, they are run on quicksand. You do not know the asphalt things. I have been with Hon D’Ujunga and Hon Muloni, they are so knowledgeable. I think you have to improve.
Katuntu: Why I am asking these questions is because we think the submissions which you made fell short of disclosing all the oil revenues as of the time you submitted. And these questions we are asking are deliberate because we know the answers, for example, the training and research fees.
We are going to see how it is reflected in your submission. Who are the beneficiaries? You forwarded a long list but can you tell us how you picked these people to go for training? What was the policy?
Bonabantu: These people who went for training were picked in the spirit of national content. At least that is what I know. Institutions across government were requested to nominate people to go for training so that we acquire skills in the management of oil and gas.
Katuntu: Isn’t it an ongoing programme?
Bonabantu: Some of the nominated people are still undergoing training.
Katuntu: Aren’t you still nominating people to go for training programmes?
Bonabantu: At the moment we do not have people going for training programmes because the training is contributed to by the oil companies and there is a committee that approves the budget for the training fund, but the committee is yet to sit to approve that budget.
Katuntu: You know there is money for that which you did not account for? You did not even mention it in your submission? And by the way, even the money being contributed by the oil companies, isn’t it recoverable costs?
Bonabantu: That is indeed recoverable costs and I am sorry I did not come with the details of the funds.
Katuntu: But you should have indicated it when you submitted the revenues?
Bonabantu: I am sorry.
Katuntu: I am sorry too! What do we do? Can we proceed this way? We must now have another meeting with them. We do not want you people to be coming here all the time yet we know you are managing public offices. Because your work suffers when you come here and yet you are under legal obligation to come here. And so you need to prepare so that when you come here, you spend very little time, we get clarification so that you do not come back.
But like now you have been here for the whole morning and yet you are going to come back here. Why? Because you are not ready. You should know that we have a problem of time. This is not an endless process. We were given time and that is why we are asking for an extension of only four weeks because many times officers have come here and have asked for adjournments because they are not ready. They come the following day and they waste time.
On that we would like to discharge you so that you prepare and come with clarifications we will be seeking. In the next meeting, the permanent secretary and the minister should be here and all the officers who think have the information we would require.
Two, we do not want to go into this drama of studying figures which you have just submitted. And so can we receive them at least 48 hours before you come so that we can have an opportunity to go through them so that we can have a more useful conversation.
Some of these issues have opened up your mind on the sort of areas we will be looking at. We will also want to look at acreage rentals. How much money should have accrued company by company and how much acres each company has.
Katuntu: Have you ever received revenue from DRC?
Bonabantu: I don’t know of any.
Katuntu: You may inquire about it before you come. And the annual surface rentals. And can you categorise how much money you have received from each PSA from the time under review. Can you also come in detail with all the Projected Affected Persons (PAPs)?
Details of all the PAPs, the people who have been paid and the payments which are outstanding. We do not want you to be like Uganda National Roads Authority which kept people’s money and they gave it to some people who transferred it to their own countries.
We need details of the PAPs and we are going to share them with their areas MPs because we can see that Shs120b was provided then and yet many people have not been compensated. Compensation is a constitutional obligation. Those are things you must do. With situations like these, you have a problem.
The problem by government to change the land law or that particular provision will meet stiff resistance in Parliament if you are not paying people and you now want to take over rights of their land. You may be undermining government policy because you are not doing your job.
Francis Takirwa (UPDF): In relation to PAPs, wouldn’t it be necessary to look at the bank statements?
Katuntu: It will and it is so directed.