• What is UNN?
  • Why UNN?
  • Our Team
  • Support Us
Thursday, September 28, 2023
  • Login
  • Home
  • Featured stories
  • Editors Choice
  • Trending Stories
  • News
  • Africa Today
  • Opinion
  • Literature
  • Videos
  • Sports
No Result
View All Result
  • Home
  • Featured stories
  • Editors Choice
  • Trending Stories
  • News
  • Africa Today
  • Opinion
  • Literature
  • Videos
  • Sports
No Result
View All Result
UNN Times
No Result
View All Result
Home Business

Power-Giant – Umeme’s Operations in Uganda Ends

The company has since 2019 been compelling government to pronounce itself on the concession with regard to delayed negotiations

Ronald Mugabi | UNN Times ReporterbyRonald Mugabi | UNN Times Reporter
December 8, 2022
in Business, Featured stories, News, Trending Stories
0
Power-Giant – Umeme’s Operations in Uganda Ends
6
VIEWS
Share on FacebookShare on Twitter

KAMPALA – The Government of Uganda has finally notified Umeme – the country’s prime electricity distributor that it will not renew its 20-year concession once it expires in March, 2025.

The company had since 2019 been compelling government to pronounce itself on the concession, especially with regard to delayed negotiations, saying the delay was affecting its ability to attract investments and trading on the stock markets.

RELATED STORIES

When Museveni Assured Basoga of Subsistence Life

When Museveni Assured Basoga of Subsistence Life

July 16, 2023
When Gun-violence, Brutality Dominated Law Society Report

When Gun-violence, Brutality Dominated Law Society Report

July 15, 2023
Why URA is facing a Parliamentary Probe over Recruitment

Why URA is facing a Parliamentary Probe over Recruitment

July 15, 2023
Why Muslims Hailed President Museveni over Iran’s Leader Visit

Why Muslims Hailed President Museveni over Iran’s Leader Visit

July 15, 2023

Umeme acknowledged the government’s position a December 8, public notice. Read hereUMEME_CONCESSION_Press_Statement

“The Company has formally received written communication from the Government of the Republic of Uganda, notifying it that the current Concession will continue to run until its natural end in March 2025 as stipulated in the Concession Agreements after, which, there will be no renewal after March 30, 2023,” read the Umeme statement in parts.

Umeme, which is listed both on the Uganda and Nairobi Stock Markets, has endured uncertainty over its future after 2015, with many critical views from both political leaders and consumers of the service.

In 2020, the government finally formed a committee for negotiations with the company after two directives from President Museveni and other government officials, from the Ministry of Finance, Planning and Economic Development, the Ministry of Energy and Mineral Development, and the Attorney General’s office.

However, the committee’s delay to conclude its negotiations and engaging Umeme has been a concern for the company’s management and shareholders.

In May last year, Umeme Board Chairperson, Patrick Bitature expressed hope that the negotiations would start soon after the new government is formed by June of the same year, as the government had cited the electioneering period as a reason for the delays.

The hope, however,  reduced when the government’s ‘rationalisation of the ministries, departments, and agencies plan started taking shape and it became clearer that the several electricity government agencies would either be merged, scrapped, or made departments under the ministry.

During this debate, there were calls for the Uganda Electricity Distribution Company Ltd to take over the distribution activities currently run by Umeme, on grounds of the high cost of electricity to the consumers as well as the erratic supply.

Some of the workers of Umeme Ltd. Thousands are likely to lose jobs as the power supplier exits the country. (Photo/File)

As early as 2013, barely eight years into its concession, there were already calls for the revocation of the concession, with a parliamentary investigating committee accusing the company of failing to reduce losses and costs while exaggerating investments.

The then Managing Director, Charles Chapman said the report had come too late because the losses had been reduced from 40 to 24 per cent since they started operations. Five years later, President Yoweri Museveni spoke against the extension of the concession accusing Umeme of behaving like a middleman bent on making a profit and influencing the cost of electricity.

In August last year, Ibrahim Ssemujju Nganda – the Kiira Municipality legislator led parliament to block the presentation of a report on the evaluation of Umeme’s performance by Minister Ruth Nankabirwa, saying parliament had already recommended the termination of the concession. They also cited the high return on investment of 20 per cent as set in the contract.

“We need to be serious; we take a decision to terminate and then you come here to brief us about the defiance of a resolution of Parliament,” said Ssemujju. Bitature said these developments and the delay to conclude negotiations were affecting their ability to attract investments into the company’s operations.

He said the company was willing to take a downward-revised rate in a renewed concession. The decision to revoke the contract would have perhaps come earlier, but there have been concerns about how much the government would have to pay Umeme in recoverable investment costs currently totalling about $300.

Last month, the distributor accused the State Minister for Energy Okasai Sidronius Opolot of stating that the government had made the decision not to renew the concession.

Umeme said this was bad for the company and for its trading on the stock markets, adding that its prospectus when floating its shares, states that the contract ‘naturally runs up to 2025, which is still the position to date.

“The Company shall, in accordance with the Listing Rules governing it, promptly issue a Public Notice once written communication is received from the Government on the future of the Umeme Concession,” said a statement to the markets. Umeme’s exit will come two years after power generation company ESCOM, which leaves Uganda next year.

The Chief Executive Officer of Eskom Uganda, Thozama Gangi said they are serving out their contract in March. She told a tariff review public hearing Thursday that 126 of their 127 employees will all be transferred to the Uganda Electricity Generation Company Ltd.

The tariff review public hearing is aimed at enabling the public to give views on the applications by the companies to the Electricity Regulatory Agency on how much the consumers will pay next year. Umeme buys electricity at an average Tariff of 290 shillings per kilowatt-hour (unit) and sells to customers at a weighted average tariff of about 504 per kWh, according to ERA.

“The difference is the distribution price covering the approved cost of running the distribution business, including the recovery of investment costs and return on investment,” said ERA Chairperson, Sarah Kanaabi. Blessing Nshaho, Umeme Ltd Head, Corporate, Legal, and Regulatory Affairs, says that they require a purchase price of 168 shillings per unit to meet the recommended cost of electricity.

Additional reporting by URN

 

Tags: Ibrahim SsemujjuIbrahim Ssemujju NgandaNairobi Stock MarketsUgandaUganda GovernmentUmeme
Previous Post

Mpuuga – Nabbanja in Stale Meet Over Abducted Opposition Supporters

Next Post

Parliament Orders Public Service to Reinstate Over 170 Police Officers onto the Payroll

Related Posts

She Cranes Coach Mugerwa Threatens to Resign over Mistreatment

byMoses Kalaire | UNN Times Reporter
August 8, 2023
0
She Cranes Coach Mugerwa Threatens to Resign over Mistreatment

KAMPALA - The Cranes’ coach Fred Mugerwa has threatened to resign on the Ugandan national netball team returned home from...

Read more

Why the NRM Gov’t Can Never Meaningfully Conserve Uganda’s Environment

byUNN Times Editor | UNN Times Editorial
July 21, 2023
0
Does Environmental Justice in Uganda Matter Anymore?

By Oweyegha-Afunaduula Towards the beginning of the 1980s - the University of Nairobi, Kenya, was the only institute in the...

Read more

Linking Ugandan Society to Military Occupation, Militarisation and Criminalisation

byUNN Times Editor | UNN Times Editorial
July 20, 2023
0
Does Environmental Justice in Uganda Matter Anymore?

By Oweyegha-Afunaduula If you asked me why I decided to link military occupation, militarisation and criminalisation of Uganda’s society, I...

Read more

How to De-nranize Uganda Electoral Processes

byUNN Times Editor | UNN Times Editorial
July 16, 2023
0
Does Environmental Justice in Uganda Matter Anymore?

By Oweyegha-Afunaduula NRA is the abbreviation for National Resistance Army – the rebel group that waged an armed revolt against...

Read more

Bill-gating Science to Conquer God’s great Nature project

byUNN Times Editor | UNN Times Editorial
July 14, 2023
0
Does Environmental Justice in Uganda Matter Anymore?

By Oweyegha-Afunaduula I am sure you have never heard of the verb bill-gating. Well, I have coined it from two...

Read more

Norbert Mao and the Echoes of Opposition Politics in Uganda

byUNN Times Editor | UNN Times Editorial
July 2, 2023
0
Ofwono Opondo on Namuganza Censure, Erias Lukwago and Gen Saleh’s Memo

By Ofwono Opondo The ever jocular Norbert Mao a.k.a. Won kom, and venerable President General of Democratic Party - DP,...

Read more
Next Post
Parliament Orders Public Service to Reinstate Over 170 Police Officers onto the Payroll

Parliament Orders Public Service to Reinstate Over 170 Police Officers onto the Payroll

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

About us

UNN is a new people powered TV channel, Radio station and Newspaper leading the revolution. We’re a media outlet focused on inspiring and empowering you while telling the truth, because as they say, the truth will set you free.

Recent

She Cranes Coach Mugerwa Threatens to Resign over Mistreatment

Why the NRM Gov’t Can Never Meaningfully Conserve Uganda’s Environment

Linking Ugandan Society to Military Occupation, Militarisation and Criminalisation

The Concept of types of Knowledge and its Integration

Of Ugandans’ Craziness for Modernisation

Advancing Science in African Universities through Integration Experience

Follow Us

Tweets by GetUNN

Facebook

© 2023 UNN Times

No Result
View All Result
  • Home
  • Featured stories
  • Editors Choice
  • Trending Stories
  • News
  • Africa Today
  • Opinion
  • Literature
  • Videos
  • Sports

© 2023

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.