What you need to know:
- Leaked documents from the UETCL have disclosed how the bulk electricity transmitter disbursed Shs1 billion to an external recruitment agency to help it recruit 37 staff.
The Uganda Electricity Transmission Company Ltd (UETCL), the taxpayer-funded bulk power transmitter, is in the process of spending Shs1b to hire thirty-seven new staff, this publication can reveal.
This means each recruitment contracted out to Klynveld Peat Marwick Geordeler (KPMG), which describes itself as a global network of professional firms providing audit, tax and advisory services, will roughly cost Shs27m.
Sources briefed on the matter have described the expenditure contained in internal memos as unnecessary, arguing that UETCL’s human resources department should have conducted the exercise for free or minimal cost.
Our investigations reveal that the public entity signed the contract with KPMG on June 15, 2023 and the former committed to pay the latter on average Shs27m per new staff hire during the exercise to last 12 weeks.
However, Mr Joshua Karamagi, the UETCL managing director, said the decision to work with KPMG was due to the incapacity of its human resource department to conduct the exercise.
“Why KPMG, we have gaps in our human resource department (and at the moment) there is no substantive human resource manager. To recruit 37 positions. The total estimated time by the professional [KPMG] firm is three months and a dedicated UETCL could take up to six months yet most positions have been vacant for a year,” he said in a telephone interview on July 14.
“KPMG is a firm of international repute. We would attract good candidates, and cut out external stakeholder interference,” he added.
The contract, which was signed by then UETCL’s acting Company Secretary, Mr Martin Erone, and Ms Judith Erone, KPMG’s authorised representative, stated that UETCL will pay the consultant Shs1,046,495,000 inclusive of VAT 18 percent.
Others present were Mr Lookman Mukungu, UETCL’s then acting manager of Human Resources; Mr Emmanuel Owiny, UETCL’s principal disbursement and stores officer; Mr Edgar Isingoma, KPMG’s team leader, and Ms Juliet Kibirango Bitwire, KPMG’s senior manager, advisory, among others.
While 30 percent of the payment was to take shape upon submission and approval of the inception report, the parties agreed that 30 percent was to be effected upon submission and approval of the shortlisting report.
“Thirty Percent payment of the agreed contract sum upon submission and approval of the Selection Report and 10 percent payment of the agreed contract sum upon submission and approval of the End of Assignment Report,” it stated.
A breakdown of the contract’s lumpsum price indicated that overall, one UETCL official would pocket Shs6.66 million per day for 33.6 days translating to Shs210.5 million.
Another official would pocket Shs3.7m per day translating to Shs254.2 million for the 68.7 days she would participate in the recruitment exercise and the Financial Management expert would pocket Shs2.22 million per day totalling to Shs59.5 million for 26.8 days.
The Electrical Engineering expert would walk away with Shs48.8 million for 22 days. He would earn Shs2.22 million per day and the pool of support staff takes Shs1.85 million a day totaling to Shs248.4 million for the 134.26 days they are engaged in the exercise.
Meanwhile, officials take in a total Shs821.4 million, the budget in VAT-inclusive (18 percent) amounting to Shs147.9 million and an additional Shs77.2 million on miscellaneous expenses.
Under the contract’s miscellaneous budget, KPMG planned to spend Shs3.7 million on stationery, printing and administration, Shs36.9 million on psychometric assessment of an estimated 111 candidates at Shs333,000 each, and Shs1.29 million on technology and communication costs.
It also planned Shs370,000 on local transport, advertisement at Shs16.6 million and another Shs18.3 million for an interview venue for 11 days at Shs1.7 million per day.
In response to the exorbitant costs, Mr Karamagi said: “They (KPMG) have just successfully recruited about 45 for the scale access project in the Ministry of Energy at a higher unit cost than what we gave them. All positions are open to our internal staff.”
Considering UETCL’s tight timelines on the assignment, sources at UETCL say KPMG asked during the negotiations held on May 16, to be allowed to work with True North Consult Ltd to leverage their expertise.
“At the negotiations, KPMG also explained that the rate offered to UETCL was already discounted. It also gave examples of recent similar assignments at the Ministry of Energy and Mineral Development and Uganda Energy Credit Capitalisation Company (UECCC) where the average rates were $8,000 per position exclusive of taxes and disbursements,” a source said.
“The consultant indicated that this was the best offer that they could give and no further reduction would be possible without affecting the quality and timeliness of the service and the meeting considered the explanation acceptable,” the source added.
Monitor has also established that KPMG confirmed that the proposed energy expert (Mr Johnmary Migadde) has worked with KPMG for a long period and that he had been involved in assignments that relate to high voltage transmission lines such as the Nkenda-Hoima Project.
“He has recently supported recruitments done under MEMD & UECCC and is generally competent and appropriate for the proposed role. KPMG further explained that the firm will mobilise other experts as will be required or has the required assignment,” the negotiation document signed by Mr Mukungu reads in part.
UETCL, incorporated as a limited company in March 2001 per the provisions of the Companies Act, recently undertook a review of its organisational structure to align it with the Electricity Regulatory Authority (URA) Strategic Plan.
During this review, several positions were introduced at the senior and middle management level as well as the technical level for which the UETCL is seeking to hire the services of a consultancy firm to assist in identifying suitable candidates to fill the positions.
At least 34 positions were to be filled. Of these, 23 are newly created positions by UETCL management, and 11 positions are replacements after the bearers’ contracts were not renewed by the end of June when the contracts ended. However, some of the positions required more than one recruit. This brought the total number of staff recruited to 37.
The new positions include technical assistant to MD/CEO, strategy and business performance officer, manager of enterprise risk management, board administration manager, head of land acquisition and wayleaves, manager of survey and valuation, chief finance officer, two legal officers (litigation), information systems auditor, and two planning engineers.
Others are senior fleet management officer, civil engineer, senior protection engineer (metering), software engineer (backup control centre), hardware engineer (backup control centre), dispatch engineer (reconciliation, reports and outage), two power systems controllers and protection technician, among others.
Positions meant for replacement include senior legal officer litigation, investigation clerk, senior civil engineer, head projects implementation, head operations and maintenance, protection engineer, and business applications support officer.
Others are information systems officer (software), inventory accountant and stocktake, administrative assistant, and senior performance management officer.
In August 2022, the UETCL Board made changes in the top management of the company and five managers were sacked.
Mr Michael Taremwa Kananura, while holding the manager of finance position, was handed the mantle to lead the company as managing director in an acting capacity before Mr Karamagi was recruited in March.
This newspaper has learnt that the move is one of several administrative changes to be taken by UETCL management to improve efficiency and service delivery.
For example, an internal memo signed by the company’s acting manager for Human Resources and Administration, Mr Lookman Mukungu, saw four other senior staff members moved from their positions to head other departments.
“The Human Resource and Administration is cognizant of the fact that these changes may impact the flow of work in the short term but they will ultimately make UETCL more efficient in its service delivery and mandate,” he noted.
The changes, which took immediate effect, saw Ms Specioza Mukazi (head of procurement and disposal) moved to the head of corporate services, and Ms Pamela Byoruganda (principal public relations officer) moved to the head of human resource and administration.
Others were Ms Miriam Nambi (principal administration officer) and Mr Martin Byamukama (principal procurement officer) reassigned to manager training and development and acting head of procurement and disposal positions respectively.
Ms Mukazi was deployed to the head of corporate services (overseeing the company’s legal wing) and Ms Byoruganda deployed as administration manager (HR).
Inside sources have confirmed that there have been critical internal fights in the UETCL management, roughly six months after Mr Karamagi was hired as managing director.
Sources said this is because many staff believe some of the senior management personnel are unworthy to run their portfolios.
The source’s accounts indicate that Mr Karamagi has deployed the former head of procurement, Ms Specioza Kikazzi, as the head of corporate services that oversees the company’s legal wing.
“Whilst the company spokesperson has been deployed to as administration manager where she has no expertise. Is this a new style of throwing away staff? The deputy CEO has also confirmed without seating any interviews yet there’s a law against this,” one of the sources said.
“If the Minister of Energy recently instructed that all staff affected by merger have contracts extended for two years, why has Mr Karamagi laid off 66 projects staff? And if we do a quick audit, are these projects commissioned or does it mean the projects are suspended?” another source said.
The source also wondered why management claims that the budget for required staff is already down even before the projects are completed.
“Is there an internal audit report to this effect? If no what is the role of the risk and internal audit section in the organisation? Can they comfortably share the link where the deputy CEO job was advertised? If not how come that for him the board has found comfort in just confirming him and not have him subjected to interviews as per PERD Act?” the source wondered.
Efforts to speak to some of staff for a comment on the matter were futile by press time as their telephone contacts were unavailable.
But, one of the implicated staff, who spoke on the anonymity by telephone, confirmed that they were content and comfortable with their new positions.
“I don’t have any complaints or comments, I am content where I am. What is the qualification for administration? The allegations are not true,” the source said.
The source hinted that Ms Mukazi was still handling procurement for the right of way and not legal affairs.
“Legal (affairs) will be handled by the company secretary,” the source said.
This publication could not independently verify by press time the claims that UETCL’s new head of corporate affairs and chief finance officers have recently been hired from its sister company Uganda Electricity Generation Co. Ltd (UEGCL) by press time.
Unfair contracts termination
The recruitment programme has, however, sparked concerns about why UETCL deliberately declined to engage its Human Resources Department to conduct the exercise for which it would have accomplished the undertaking at less than a quarter of the budget it awarded KPMG.
The Public Enterprises Reform and Divestiture (PERD) Act, 1993 Section 4, subsection 9 on the management of public enterprises, provides for equal opportunity for employment and selection and promotion of confidence, initiative, professionalism and excellence in management.
On the criteria for reforms and restructuring, subsection 20 of the Act states that it is the duty of the responsible minister (Ministry of Energy) to determine the course or courses of action, if any, to be taken in the case of restructured enterprises that do not meet their operating and financial targets.
It also provides the responsible minister with the power to formulate and execute detailed plans for the reform of any public enterprise.
“The minister responsible for finance or the responsible Minister, as the case may be, shall consult with the relevant line Minister before his or her making any determination or exercising any power about a public enterprise under this section,” it reads.
On May 30, a group of aggrieved UETCL employees wrote to the commission petitioning it to halt the process due to the numerous irregularities involved.
The Commission received a complaint from the aggrieved employees of UETCL alleging that there was a massive layoff of staff at the company by Mr Karamagi.
They further alleged, in the petition, that 66 members of staff were informed by Mr Karamagi in a meeting held on May 26, 2022 that their contracts were to expire on June 30 and will not be renewed by the company.
This newspaper also established that the alleged axing of experienced staff upon the expiry of their contracts and external recruitment of new staff members for the same positions violates a recent directive by the Public Service Ministry over the extension of staff contracts.
In February, the Energy ministry wrote to UETCL directing management to renew staff contracts for a period of two years only effective July 1, to June 30, 2025.
The directive was a fruit of the implementation of recommendations on the Rationalisation of Government Agencies passed in April 2021.
Earlier on May 19, the same (aggrieved) staff members petitioned the chairperson of the Board of Directors of the Electricity Regulatory Authority (ERA), UETCL’s supervisor, asking it to make haste and save the managerial messes cropping up at the firm.
“Intervene and rescue the organisation that is set to collapse if the situation is not arrested. There is also a great risk of staff resorting to other means of getting their voices heard if the situation remains unabated. Your quick interest and intervention in this matter is required,” the petition reads.
It is also our request that all staff movements and recruitments should be halted as the matters including the recruitment process are reviewed by you, the petitioners wrote.
The staff accused Mr Karamagi of deliberately trying to ship in new staff from UEGCL to form his new management team to the detriment of the existing ones.
“The CEO has disregarded the growth of staff and gone ahead to sanction the direct procurement of consultancy services from KPMG to undertake external recruitment for 37 positions, irrespective of the level, at an exorbitant cost of over Shs1 billion,” the petition adds.
Some vacant positions were going to be advertised internally for the vacant positions below the level of Head of Department as has been the practice to advertise internally for the benefit of staff growth but he has ignored this protocol, they claimed.
“Many of the engineers who have undergone specialised training at the cost of the company are yearning to grow within UETCL but booting them out under such circumstances denies them the opportunity of promotion without wasting funds.”
According to the UETCL HR Manual, this newspaper saw, the progression of employees up the organizational structure greatly motivates staff through triggering movement up the structure.
It emphasizes that it is only if there is no internal capacity that such positions could be advertised externally.
It is also noted that while Mr Karamagi has moved to externalize recruitment at an exorbitant cost of Shs1 billion, there are more than 50 staff that are supported using resources from the Consolidated Fund and such staff who are likely to lose their jobs soon due to the reduced project portfolio for UETCL.
Mr Karamagi, this publication learnt that, in a recent engagement with the Board of Directors, reportedly upwardly raised the CEO’s financial approval threshold from Shs300 million to Shs1.2 billion.
This was said to be done in the absence of a framework to guide such huge payments like PAP (project-affected persons) compensations which may be subject to fraud.
Whereas the KPMG’s contract is currently running, an internal source at the Energy Ministry says the direct procurement of KPMG is not in the approved MYT budget and has since raised eyebrows.
“UETCL has a Human Resource and Administration Department competent enough to undertake the recruitment of staff below the level of Head of Department at no additional cost, as it has always been done, why are we seeing this yet the budget is also not in approval,” the source said.
It is also established that the new positions created for example chief finance officer and the chief technical officer introduced under Mr Karamagi’s management with a planned gross monthly salary of Shs29 million a total annual cost of about Shs1.04 billion are not approved by ERA.
“These costs were not approved by ERA and no budget savings were declared to ERA to cater for both the KPMG costs as well as sustainable remuneration and other costs for the ‘Chief’ over the next three years,” the source stated.
In a response addressed to Dr Shaft Nasser Mukwaya, the secretary of the Equal Opportunities Commission, over the allegations stating that the UETCL management terminated several contracts due to funding gaps, Mr Joshua Karamagi, the UETCL managing director, said: “UETCL has terminated only the contracts of staff that are attached to unfunded projects. The decision not to renew staff contracts is therefore a financial decision resulting from resource constraints.”
The June 22 response adds: “These projects are funded on a project basis and staff employed to implement these projects are funded by government’s counterpart funds appropriated for the respective projects. When these projects end, the government ceases appropriating funds, in effect the funding for staff under the project also terminates.
“UETCL is, therefore, not in a position to halt the contracts’ non-renewal decision as this would amount to committing the Company without a supporting budget. It is, therefore, not true that the decision was unfair and unjust as alleged by the said complainants.”
Whereas Mr Karamagi hints that the affected staff had already been notified under their contract terms and the Employment Act, 2006, Mr Mukwaya on June 14, wrote to Mr Karamagi and the UETCL acting manager for Human Resources and Administration, Mr Lookman Mukungu, calling the termination of the 66 staff unfair and directing that the termination be halted.
“The purpose of this letter is to inform you to halt the proposed action of terminating the said employees until the Equal Opportunities Commission carries out investigations into the allegations.”
“The complainants find these actions unfair and unjust since it is contrary to the directive from Ministry of Energy and Mineral Development, stating that all staff will be offered two years contracts before the merger and rationalisation of government entities,” Mr Mukwaya wrote.
Ms Judith Alyek, the chairperson of the Parliamentary Equal Opportunities Committee, says they already caught wind of the issue but were waiting for the petitioners to officially table a petition before Parliament.
“It is really unfortunate if those allegations are true and we are watching, the only thing we are waiting for is the petition landing at Parliament,” Ms Alyek said in an interview.
When contacted earlier last month to establish whether the company’s management acted in consultation with the Board in taking such decisions, Mr Kwame Ejalu, the UETCL board chairman, declined to speak stating that it was an official (sensitive) matter to be discussed in the media.
He referred us to Mr Karamagi, saying, “We do not run the cooperation’s business in the press and the spokesman of the company is the MD and if there is any comment we shall give, we shall give it through him.”
KPMG was formed in 1987. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services.
The firm operates in 143 countries and territories. It serves the needs of business, governments, public-sector agencies, not-for-profits and through KPMG firms’ audit and assurance practices, the capital markets.
It provides audit, tax and advisory services.
*Source: KPMG website