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UMEME bosses dash to State House as Museveni threatens to terminate power deal

President Museveni poses with UMEME board chairman Patrick Bitature (2nd left) and CEO Celestino Babungi (left), the CFO Gerald Ssendaula and the COO, Ms Florence Nsubuga at State House Entebbe on Tuesday. 

Four senior UMEME officials on Tuesday evening held talks with President Museveni on the backdrop of his threat to terminate the power distribution company’s contract over high power tariffs.

The UMEME delegation to State House Entebbe was led by Board chairman Patrick Bitature, and included Mr Celestino Babungi, the company’s Chief Financial Officer, Mr Gerald Ssendaula and Ms Florence Nsubuga, the Chief Operation Officer.

Sources said Mr Museveni and the officials discussed the increasing power tariffs levied by UMEME.

The meeting comes after President tasked the ministry of Energy to explain the incessant cost of power, with tariffs charged by UMEME remaining astronomical despite significant reduction in technical and commercial losses incurred by the power distribution company.

In March 12, 2018 letter to Energy Minister Irene Muloni, the President accused certain ministry officials of inflating the magnitude of the technical and commercial losses incurred by UMEME so as to keep tariff rates high.

“The Auditor General had calculated the two categories of losses to be at 28% in 2005. Then all of a sudden, a certain delegation of Ugandans went to the USA and mysteriously, together with the investors, hiked the magnitude of the technical and commercial losses to 38%,” the President’s letter reads in part.
He adds that whereas commercial losses have shrunk to 1% and UMEME claiming to have invested $500m in the distribution infrastructure, the power tariffs have remained high.

“When Gen Salim Saleh wrote his investigative report in 2009, then again mysteriously, the losses parachuted back to 28%. Of the 28%, about 15% were technical losses caused by old wires, 13% were commercial losses caused by non-collection of debts by Uganda Electricity Board (UEB). Since that time, technical losses have shrunk to 1% while commercial losses have climbed back to 17.3% yet the investors claim to have invested $500m in the distribution infrastructure. If they have invested so much, why the technical losses not decline?” he adds.

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