MPS: Umeme Contract Should Be Terminated

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Members of Parliament (MPs) have rejected the proposals of the Executive and maintained that the contract of power distributor Umeme should be cancelled as the committee that was set up to investigate the electricity sector recommended.

Umemeee

The MPs on the adhoc committee that was instituted in 2011 to investigate the irregularities within the sector in its report recommended that umeme’s 20 year concession agreement be terminated due to the gross legalities and manipulations surrounding the signing of the concession and its scandolous provisions.

Minister Irene Muloni in her responses to the report told parliament that the Executive disagrees with the recommendation because the Attorney General advised that terminating the contract would have serious legal, financial and implications for the country.

She said that cabinet however agreed that a set up a team of knowledgeable people to review the all the agreements in the sector and identify the areas that need adjustment.

The chairman of the committee Jacob Oboth Oboth told the minister that it was one of the committee’s terms of reference to point out provisions in the contract that are unfavorable to Ugandans.

He said that by saying that a team of experts will look into the contract the minister implies that the members of the committee were not competent to execute this task.

Kyankwanzi woman MP Ann Maria Nankabirwa asked the minister not to mislead Ugandans by saying that termination of the contract will have grave implications for the country saying that there will be grave implications even if the contract is left to expire naturally.

She told the MPs that the committee discovered that the government would compensate Umeme whether it terminates the contract, whether umeme terminates the contract or whether the contract comes to its natural end.

She said that in an event that Umeme terminated the contract, the government would pay it 129 million dollars, if government terminated the contract, it will pay Umeme 147 million dollars and if the contract came to its natural end, the government will pay it 98 million dollars.

She said that Ugandans are already suffering financial implications by having to bear the highest tariff rates in the whole world after surpassing Denmark.

Prime Minister Amama Mbabazi failed to dissuade the house to wait until the Attorney General advises government on how best to handle the situation and said that government has already decided to review not only the Umeme agreement but all the agreements in the sector.

The MPs however disagreed with him saying that if government wanted to review the contract it would have done it a long time ago. Bujenje county MP Kabakumba Matsiko asked why the government hasn’t reviewed the contracts after having the report for almost two years.

West Budama North MP Fox Odoi also said that the time government has had the report is long enough for them to have taken action on the committee’s recommendations if they deemed them serious.

He adds that in fact terminating the contract would minimize the financial implication since it will still pay Umeme if the contract was left to end naturally.

He said that Ugandans would have incurred more amount than the difference that is there between the costs they would incur if they terminated the contract and what they will incur when the contract comes to an end through the power rebates and the exorbitant tariff rates.

Ndorwa West MP David Bahati urged his colleagues to handle the issue carefully baring in mind that there are some Ugandans who have bought shares in Umeme including the parliamentary pension fund. Soroti woman MP Angelinne Osegge called Bahati a selfish legislator who wants to blackmail MPs.

After about two hours of heated debate on the matter, the speaker put the question to vote and the majority members agreed to the termination of the contract.

Umeme was given a 20 year concession to distribute power in 2005 but Ugandans have blamed it for all the problems in the sector from load shedding to faulty billings and high tariff rates.

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  • Sauda

    “in an event that Umeme terminated the contract, the government would pay
    it 129 million dollars, if government terminated the contract, it will
    pay Umeme 147 million dollars and if the contract came to its natural
    end, the government will pay it 98 million dollars.”

    What kind of contract is that???? and who signed on behalf of government and why are they not in Luzira already.

    Who actually owns UMEME? I notice that top management is mostly foreign and so is the board of directors.

  • elgon58

    If we fear terminating that contract then many companies will simply make a lot of money and continue offering poor services like umeme without the fear of the contract being terminated because they would be compensated anyway for breach of contract.What a cheap way of making money.There should have been conditions in that contract that protect the consumer.

  • Arthur Paulo Kamuntu

    Hahahah, SAUDA!!! You ask: “What kind of contract is that????” ANSWER: The type drawn up at back of an SH toilet wiper after imbuing ones brain with Waragi whilst in the company the Uganda AG and his acolytes at State House? And if not the one: Whom a person with vested interests negotiates. And third the one: When the buyer holds a barrow of a gun on your head and Museveni-mails into signing it!!