Industrialists, Umeme agree on plan to cut costs

Umeme officials listen to complaints from large consumers of electricity in Kampala last week. PHOTO BY STEPHEN OTAGE

KAMPALA. Power distribution company Umeme, and manufacturers have agreed to start joint planning of locations to set up industries in order to maximise economies of scale.
Economies of scale is the cost advantage that arises with increased output of a product.
Speaking at a large consumers’ consultative meeting in Kampala last week, Mr Richard Mubiru, the director policy at the Uganda Manufacturers’ Association board, said much as Umeme has always been blamed for poor quality and unreliable power supply, manufacturers ought to understand that the company’s role is to distribute the power which they do not generate.

Industrialisation 2025
“Government has come up with a strategy for industrialisation by 2025; it may not attract industries if the cost of electricity remains high and industries remain scattered everywhere due to poor planning,” he said.
He said by planning with Umeme, the manufacturers can benefit from supplying Umeme all the consumables which will lower the impact on the tariffs because the consumables will be largely Ugandan.
“We have issues of scattered industries yet the cost of setting up critical infrastructure like power lines is high,” he said.

Need for investment
Last week, Umeme met industrial electricity consumers to listen to their concerns as well as get feedback regarding their quality of services.
Among the common complaints was the poor quality of electricity and the unanswered questions regarding the actual rates of the electricity tariffs.
Umeme managing director Selestion Babungi said power reliability requires investments and so far they have injected $300 million towards distribution networks and with a foreseeable 1000 megawatts coming in the next six years, there will be further growth to attract investment and industrialisation.

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