Wednesday, September 19, 2018
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REVEALED: Why UMEME Wants Contract Extension

Power distributor Umeme is lobbying the Ministry of Energy to have its concession agreement extended before it expires and as President Yoweri Museveni threatens to have the contract terminated.

A source at Energy ministry told local media on condition of anonymity that Umeme officials have been using different lobbyists to convince President Museveni and Energy Minister, Engineer Irene Muloni, to commence early negotiations to have the current twenty- year concession extended beyond 2025.

Umeme has been using its latest achievements like increased roll-out of pre-payment metering, increase in revenue collection and distribution efficiency to lobby the government to extend its concession.

The company says it has excelled in distribution efficiency at 83% compared to 50% at the start of the concession in 2005.

It appears that sections within the Ministry of Energy have been convinced by Umeme’s lobby but the President, who has over the years been critical of power tariffs, was not.

President Museveni in a March 12 letter to Minister Muloni directed against the renewal of Umeme’s concession. He also directed the Inspectorate of Government to investigate Umeme and the Energy ministry officials over suspected exploitation of consumers.

President Museveni’s letter left many wondering to why he would direct against the renewal of the Umeme concession with seven years left to the end of the current one.

Dickens Kamugisha, Chief Executive officer at the Africa Institute for Energy Governance (AFIEGO), a research and consumer lobby group, says Umeme badly wants an early extension of concession because they would use it to seek for loans from local and international banks.

URN

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