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10,000 risk job cuts over Umeme saga - contractors

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By Nelson Wesonga

Posted  Thursday, April 3   2014 at  20:33
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Kampala.
The Association of Professional Electrical Contractors (APEC) has urged the government to disregard the termination of Umeme’s power distribution contract, saying 10,000 Ugandans could lose their jobs if it is cancelled.

Last week, Parliament recommended that the government terminate the concession, which contractually ends in 2025.
APEC said it had not been ‘sponsored’ by Umeme to blackmail the government.

“We are requesting Parliament to withdraw the recommendation to terminate the Umeme concession. The government should not terminate it,” Mr Tom Oluka, the executive director of Komolo Utility Services Ltd, said yesterday during a press conference in Kampala.

“APEC employs between 6,000 and 10,000 Ugandans in power line construction and would be affected if the government cancelled the contract,” he added.
However, Ms Irene Brendah Namubiru, an official from Interbuild Ltd, said the association should not be worried about losing business.

“Should contractors be afraid if the government terminates Umeme’s contract? Another company would come in. We are professional service providers. We could work with anybody,” Ms Namubiru said.

Unconstitutional
Parliament claims basing on evidence that the Attorney General Chambers did not draw the agreements constitutionally.
Transaction advisers hired by the Finance ministry did the drafting.
As a result of the omission, they, for unclear reasons, included clauses clearly skewed in Umeme’s favour.

Cabinet is to meet over the next three months to decide whether to cancel the concession or not.
If its terminated, Uganda would have to pay Umeme $206m (about Shs526.3 billion), which is 120 per cent of the company’s unrecovered investment as at December 2013.

Ms Irene Muloni, the Energy minister, in January said they would not terminate the concession, claiming that the energy sector would collapse because no one would collect dues from power consumers.
Consequently, the power transmission company would not have money to pay the power generation firms.

The latter would switch off their generators, plunging the country into darkness.

But Mr Maxwell Akora Ebong, the Maruzi County MP, yesterday said: “Such circumstances should have been envisaged. Electricity is a lucrative sector. There are people who are already positioning themselves and can buy out [Umeme].”