Page 9 - EPSI Magazine Issue 8 final 2018.indd

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d) The most outstanding disappointment
with unbundling was the failure to bring user
tariffs to levels consumers (with urging of some
poorly articulated political statements) had
expected. This is buttressed by the belief that
Umeme Limited, erroneously perceived to be
fully foreign owned even when more than 50%
of the stock is held by Ugandans and NSSF, the
company is making a killing from the rather
high tariffs. Far from fact as Umeme takes less
than 35% of the sector revenues. Much as it is
the collector; the bulk goes to the generation
segment, taxes and repaying investment costs
for others in the electricity supply chain.
To the Issue of Recreating UEB
As we proceed to ponder the merger issues
it might be worthwhile considering some of
what follows below:
i. From the onset I must state that it would
be a folly to recreate UEB of old. Thankfully gov-
ernment has recognized this and is thinking
of leaving the autonomous ERA and the EDT
in place while creating a corporate entity with
business units doing what UEGCL, UECTL, UED-
CL and REA are currently doing. Even to do that
will require an amendment of the Electricity Act
1999. Perhaps this will speed up the amend-
ment processes for this law which started more
than four years ago. From my knowledge of the
Ugandan Parliamentary processes that amend-
ment will take more than the three years recent-
ly announced. That leads me to a personal opin-
ion that the initial announcement of a merger
was ill-timed especially now at a time when
private investment in the distribution segment
is badly needed to deliver the ramped-up gen-
eration capacity to consumers. The current ab-
sence of clarity around the merger issue sends
mixed signals to would be investors increasing
the political risk associated with investing in the
sector in Uganda.
ii. The merger itself must address the
unique activities/roles each of the would-be
merged entities have been performing/serving.
Investors in and donors to the renewable ener-
gy segment might be reluctant to put their cash
in an omnibus entity.
iii. Care needs to be taken in selection of the
top managers for this entity; focus of project exe-
cution can be in areas of interest to the managers at
the expense of the less liked or less funded dockets.
iv. The consolidating corporate entity when
formed must be squarely and firmly under the
Ministry responsible for Energy. The entities to be
merged get policy guidance from the Ministry of
Energy and Mineral Development while adminis-
tratively they are owned (and operated) by the Min-
istry of Finance which owns them 100% on behalf
of government. This leave the Mangers of these en-
tities in a position of double royalty. And in such a
situation, key decisions can be left unmade for lack
of clarity on who must make them especially if they
are hard issues to deal with.
v. As a country our memories can be very short
or shallow; we need to guard against elements that
have previously sought to take over the lucrative
aspects of the current entities not necessarily in the
interest of the majority of Ugandans. These “others”
are still among us waiting to grab whatever they
can and should never rule out the evil and self-cen-
tered interests.
Conclusion:
It is very prudent that any law be looked after
ten or so years of enactment. The Electricity Act
1999 has yielded some goodies to the country. As
we proceed to amend it and create a consolidating
entity, we must ensure that this is formed carefully
and its tasks well-articulated.
By Dr. Frank B. Sebbowa