Cabinet plots to throw out energy report

Saturday April 6 2013


The Cabinet has been meeting over the last two months to “dilute” the recommendations of a parliamentary report on the Electricity sub-sector, a Cabinet memorandum shows.

In the February memorandum, Cabinet questions the technical competence of the ad hoc committee of Parliament that prepared the report whose recommendations would have far reaching implications on the running of the electricity sub-sector, if implemented.

The Speaker of Parliament appointed the committee in August 2011 to investigate the then electricity crisis, which was characterised by limited power generation and 24- hour load-shedding.

“It is likely that the [Ad Hoc] Committee [on Energy] did not benefit from the input of technically knowledgeable people,” says the memorandum seen by this newspaper.

However, the chairperson of the ad hoc committee on Energy, Mr Jacob Oboth-Oboth, defended his eight-person team. “One of our terms of reference was to scrutinise the agreements between the government and the power utilities.

You do not have to be an electrical engineer to do that. Even then, the committee had people whose professional credentials cannot be doubted. It had an engineer, lawyers as well as accounting and financial professionals,” Mr Oboth-Oboth said.
“Those questioning our competence could actually be the ones who have failed to comprehend the report.”

The memorandum also alleges that the committee ignored the submissions and explanations by the witnesses who appeared before it. Mr Oboth-Oboth, however, said the Cabinet should point out which submissions were ignored instead of “hiding behind generalities”.

The damning report, which was tabled in Parliament in December, is yet to be debated although it has been on the Order Paper for several months. In the meantime, the Cabinet is reportedly “internalising it in order to adopt a joint position on the Floor of Parliament”.

The dangers
Among other recommendations, the parliamentary committee said the concession agreements between the government and power distributor Umeme Ltd and power generator Eskom be terminated because they are to the “disadvantage of Uganda”.
However, should Uganda decide to terminate the contract, taxpayers would have to pay Umeme its unrecoverable cost multiplied by 120 per cent, whereas if Umeme initiated the termination, the Buy-Out-Amount would be unrecoverable investment multiplied by just 80 per cent.

In December 2011, Aston Kajara, the State minister for Privatisation, said Uganda’s “negotiators [David Ssebabi and Mr Bruce Carrie] caused a liability to the government” but luckily, there is a “safety exit”.

The Cabinet memorandum said “the recommendation [termination of the concession agreements] is not tenable because it would send negative signals to the investor community. “The power sector would inevitably collapse,” the memorandum warns.

The committee had also recommended that three energy officials be held responsible for increasing the loss threshold from 33 per cent to 38 per cent. However, the memorandum said: “The above recommendation arises out of a possible misunderstanding of the technical operations of the power sector”.