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Bujagali Officials Forced Out Of Committee Meeting After Failing To Defend Tax Exemptions

Alaister McDougall (L) General Manager and Josephine Ossiya, Chief Finance Officer Bujagali Electricity Limited appearing before the Ad hoc Committee


MPs on the Ad hoc Committee on Bujagali were forced to chase away officials from Bujagali Electricity Company Limited, after citing inconsistencies in the Company’s registration and ownership before winning the multi-billion contract from Government.


Asked by Dickson Kateshumbwa (Sheema Municipality) when Bujagali Electricity Company was incorporated, Josephine Ossiya, Chief Finance Officer at Bujagali Electricity Limited said that the company was incorporated in August 2005, yet the company was contracted in 2004 by Government.


“So we want to know, from 2004 up to the time the company was incorporated, how did you respond to the request of the bid proposal before the company was incorporated? asked Kateshumba.


Ossiya replied saying that when the bid notice was put out, there was a special purpose vehicle that was formed to participate in the bid put out by Government.


Alaister McDougall, General Manager informed the Committee that the current team is new and only has snippets of information about how the company was formed, prompting Paul Omara (Otuke County) to question how a person of his hierarchy couldn’t have such information on his fingertips.


Further controversy arose when the Committee was told that when Bujagali Electricity Limited was incorporated, it was formed with two individuals Ebert Isaiah Byenkya and Innocent Kihika with each injecting in Shs1m and the duo later forfeited their shares, after the company was incorporated.


Innocent Kihika was recently named by Minister of Education, Janet Museveni as the Makerere University Governing Council member to replace Kiwanuka Kiryowa after he was named Attorney General. He is also the brother to Oscar Kihika, Director Legal Affairs at NRM Secretariat.


Byenkya on the other hand was the lead counsel in the Catherine Bamegemereire Land Commission and during the probe, a businessman, Grace Benon Mugisha, accused Byenkya of grabbing his property in Entebbe Municipality that comprised of 17 flats and the property was subject to a US$1.2M law suit at Commercial Court.


The revelation attracted questions from MPs on how a Shs2M company came to win a multi-billion tender contract and what Government based on to inject US$20M yet the founders only injected in Shs2M.


However, the team from Bujagali failed to explain the controversies prompted the Committee Chairperson, Kateshumbwa to adjourn the meeting after realizing there were no tangible answers coming from the top management.


In May 2022, Speaker Among put in place the Ad hoc Committee after Parliament rejected the request to extend another 5year tax exemption to Bujagali, and instead agreed on one year exemption so as to allow Government to conduct a forensic audit into the earlier 15years tax exemption the company had benefited from Government.


This followed a proposal made by Minister Musasizi, seeking amendment to the Income Tax Amendment Bill 2022, to amend section 21 of the Income Tax Act to extend the income tax exemption for Bujagali Hydro Power Project from 1st July 2022 to 30th June 2027.


However, the proposal was rejected in part with MPs demanding Government to undertake a comprehensive study on the cost benefits of tax exemptions, after realizing that in 2021/2022 tax exemptions cost Uganda Shs7.7Trn in revenue and in five years, Government has lost Shs21Trn to tax exemptions.

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