UETCL Lugogo sub-station on Fourth Street, Industrial Area, Kampala. PHOTO / ISAAC KASAMANI

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How UETCL board got red flags flying

What you need to know:

  • It is alleged that the eight board members who participated in all 22 full board meetings took a collective Shs170 million.

An investigation into allegations of fraud, witch-hunt, and blackmail against the Uganda Electricity Transmission Company Limited (UETCL) board of directors, has exposed how the vices have impaired the energy transmitter’s operations in the past decade. 

Documents reviewed by the Sunday Monitor—including interviews with different sources within the company over the claims and allegations—revealed a series of questionable dealings by the members of the UETCL board.

Last week, we revealed how some members of the board allegedly manipulate the company’s human resource and administration department, fixing blood relatives into key positions at the company. 

We also understand there were fights among board members to take over the managing director position in the company. 

Our sources partly blame the current state of confusion on a weak board charter.

The lacunas [gaps] in the board charter apparently enabled Mr Richard Santo Apire—a former board chairperson of Electricity Regulatory Authority (ERA), to be appointed to the UETCL board. 

Our sources tell us that the appointment has reportedly complicated ERA’s regulatory work because workers at the government agency are uncomfortable telling their former boss (Mr Apire) hard truths.

“How do you expect ERA to make binding decisions in regulating UETCL activities while those ERA officials still regard this person (Mr Apire) as their boss, a former board chairperson?”, our source then asked rhetorically.

Conflict of interest
Mr Apire was appointed to the board in October 2020, alongside Ms Grace Achieng Oburu. 

This followed the retirement of Mr Nicholas David Oluka and Mr John Genda Walala. 

Documents leaked to Sunday Monitor indicate that UETCL’s board and board committees met an eye-watering 55 times in 2019. 

This—we understand—is by any measure higher than expected. 

A 2018 Board Practices report by Deloitte, for instance, reveals that companies annually average four to six board meetings and four to five committee meetings. This could be because of the cost implications. 

The current UETCL board has eight members—seven substantive and one alternate to the managing director. It is reported that each board meeting—where all eight members are mandatorily required—earns a board member Shs1m in cash allowances.

It is alleged that the eight board members who participated in all 22 full board meetings took a collective Shs170m. The four members of the Audit, Risk and Compliance Committee bagged Shs35m. 

Elsewhere, whereas the Finance and Administration Committee members reportedly split Shs40m; their counterparts on the Remuneration and Technical Committee allegedly received in the excess of Shs60m for 15 meetings held.

It is also alleged that ERA has chosen not to act on information about exorbitant expenses around board meetings out of respect for Mr Apire. 

We also discovered that there are members of the same board, who are currently serving on more than one board within the electricity sub-sector. This may constitute conflict of interest. 

Mr Christopher Mugisha, a board member at UETCL, for example, also sits on the Uganda Electricity Distribution Company Limited (UEDCL) board as a member. 

Our source also confirmed that for the past six years, no board member has been changed or replaced.
We understand that the company has over time developed a culture in which the board has favoured engineers to become the managing directors of the company. 

Two years ago, the culture was put to test following the retirement of Mr William Kiryahika [an engineer], and the eventual catapulting of the company’s deputy managing director, Mr Valentine Katabira [also an engineer] into acting managing director. 
While Mr Kiryahika got absorbed into the board (as a member), a power fight reportedly erupted over who should be the next managing director. The board fronted one of its members in Mr Abdon Atwiine [an engineer as well].
“But because that was not acceptable, according to the company’s board charter, which prohibits a board member from taking up any other position in the administration of the company, the company’s legal team—then headed by Ms Georgina Kugonza Musisi, the company secretary— discarded the move,” our source revealed.

Rwabajungu appointment
Our source adds that the mix-up caused the formalisation of a selection process in which Mr George Rwabajungu (an accountant) was voted by the board at the expense of Mr Katabira. 

We understand this created a rift in the company, where some recognise the authority and leadership of the current managing director and others the deputy managing director (an engineer).

It is alleged that the decision by Ms Kugonza to oppose the proposal to make Mr Atwiine the next managing director later saw her handed the proverbial pink slip.

“The circumstances under which she was fired has remained unclear to date, and that is why she has run to court to sue the company and the board over her unfair dismissal because it is connected to the internal politics,” our source further revealed.

When contacted, Ms Kugonza confirmed the court proceedings against UETCL over her dismissal. She, however, declined to make further comments, saying this could be in contempt of court.

Mr Apire declined to comment over any matter to do with the company operations for fear of contradicting his boss, the board chairperson, Mr Peter Ucanda. 

UETCL board boss Mr Peter Ucanda (L) and Mr George Rwabajungu. PHOTO/FILE/COMBO

On September 9, 2021, Ms Kugonza filed a suit at the Civil Division of the High Court, seeking orders restraining the respondents from convening a disciplinary committee to hear and determine her fate. This is until the court case is concluded. 

UETCL was sued alongside Ms Sarah Irumba Muhumuza, Atwine, Mr Apire, Ms Obura, and Mr Mugisha. 
Court documents seen by Sunday Monitor indicate that on July 1 and July 11, 2021, the respondents, being members of the board of directors of the company, presented their complaints against her. 

She adds that on July 6 and July 12, 2021, the chairperson of the board of directors wrote to her to file a response, to show cause why disciplinary action should not be taken against her about the grievances (insubordination) raised by the respondents.

Ms Kugonza said she filed a response, which has been discussed by the respondents with a view of commencing disciplinary proceedings against her. 
She deems the respondents’ acts as illegal, irregular, and contravene rules of natural justice, as well as the company’s disciplinary code as embedded in the revised staff regulations, 2020.

Mr Ucanda declined to comment on the issues our investigation unearthed. Although he admitted that there was a lot of turmoil at the company, he said divulging any details would worsen the situation.

He added: “I rather keep quiet and people investigate it themselves. Once they find the truth, it is up to them. But to the best of my knowledge, we have done nothing wrong except people are fighting us left and right.”

Audit recommendations
Last year, upon the demand of the World Bank Group in Uganda, the Ministry of Energy, through a private firm—Empower Consults Ltd—conducted a detailed assessment of operations at the energy transmitter.   

The report said thus: “There is no record seen to show that the board has been evaluating its performance and its composition has not changed over the period under review. There is an apparent lack of boundaries between the UETCL board of directors and ERA, which affects the operations of UETCL negatively in pursuit of the delivery of the corporate mandate.” 

In their recommendations, the auditors asked that the membership term duration at the UETCL board be strictly three years. 

It also proposed membership rotation enshrined in the board charter. 
Other recommendations included reduction of board meetings to allow management time to implement the various set goals. It suggested six full board meetings and five committee meetings per committee inside a calendar year. It also emphasised that board member competency evaluation be carried out to ensure quality membership.

During the audit, the most senior experienced board members from the three transmission utilities—UETCL, KETRACO (the Kenyan Transmission Company) and STATNETT (the Norwegian Transmission Company)—were compared.

It was discovered that while KETRACO required a ‘sitting’ PS (Energy ministry) and Cabinet Secretary as Board members, UETCL sought out senior members in society who had previously held such levels of seniority.

UETCL role
Uganda Electricity Transmission Company Limited (UETCL),  has a major role in developing an efficient electricity sub-sector in Uganda through planning, developing, and maintaining an efficient transmission grid to meet the national electric power requirements within the allowable national and regional standards. 

It owns, operates, develops, and maintains the high voltage transmission grid. The grid connects power generation plants to load centres throughout the country, as well as interconnection with neighbouring countries.

Presently, the transmission grid comprises 150km of 220KV (initially operated at 132KV), 1443km of 132KV, 300m of 132KV underground cable, 35.2km of 66KV high voltage transmission lines, and 20 substations (includes Kabulasoke and Nalubaale switching stations).
 

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