ERA withdraws licences of five contractors over performance

A Umeme operator disconnects power from a pole in Naguru recently. The Electricity Regulatory Authority has withdrawn licences of companies over poor handling of projects. PHOTO BY FAISWAL KASIRYE

What you need to know:

The authority says the companies had not demonstrated substantial feasibility progress.

Kampala- The Electricity Regulatory Authority (ERA) has withdrawn licence permits of at least five companies that did not exhibit any ‘discernible performance on their projects.

ERA chief executive officer Benon Mutambi said on Tuesday the companies had not demonstrated substantial feasibility progress.

“The authority discourages speculative behaviour in this sector among applicants for licences, permit holders and licensees,” he said.

The authority, however, disclosed names of only two companies; LTL Holdings for 3MW small Hydropower and Sesam Energetics Ltd, for 30MW Biomas project, indicating the rest are still undergoing a hearing but would not be spared.

‘Speculative behaviour’
The regulatory body decried the rise in such tendencies, and described the contractors as speculators, whose behavior impedes development of the electricity sector despite the favourable policy framework in place and an attractive tariff regime.

However, the authority reiterated the need for increased (private) investments in the sector to bring about steady electricity supply both on the main grid and hard-to-reach areas-operated by the Rural Electricity Agency.

The desperate need to increase investments, coupled with the unchecked corruption tendencies, and a flawed contractor procurement process, and speculators in the sector are affecting the contractors’ performance, something which ERA has vowed to address.

Briefing journalists about the sector performance in the same regard, ERA as of December last year said had, embarked on statutory inspections of operations of nine generation licensees to ensure efficiency.

Mr Mutambi also said ERA had stepped up regulations for wiremen and was issuing installation permits as well as monitoring the performance of ERA- certified wiremen/women and contractors.

Power in Uganda
Much of the electricity network in Uganda is at present poorly maintained and the country experiences frequent power cuts.
Demand: Uganda will require 2,000 Megawatts (MW) electricity by the year 2025 to run its industries and homes.

Funding: To achieve this, more than $3.5 billion (about Shs623 billion) will have to be sourced and spend in the energy sector. [Interrnet]

ERA's Licence procedure

Under ERA’s licensing procedure (Notice of intended application), a person who intends to establish a project for which a licence is required under the Act shall submit to the Authority a notice of intended application containing:
Information on the financial and legal status; and the technical and industrial competence and experience of the intended applicant.

Also required is a description of the project and the time plan for the execution of the project, a review of the use of land for the project and the relation of the project to local authorities, a review of public and private-measures necessary to carry out the project, a description of the impact of the project on electricity supply, among others.

Contravening these automatically calls for the withdrawal of the licence.


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