Parliament’s Ad Hoc Committee has been told that at the end of the 30years of the contract Government signed with Bujagali Electricity Limited (BEL) would have earned US$2.014Bn equivalent to Shs7.617Trn, despite the company investing just US$176 Million about Shs670.109Bn in the company.
The information was brought to light by the Ministry of Energy and Mineral Development while appearing before the Ad Hoc Committee investigating the proposal by the Ministry of Finance to grant Bujagali another tax waiver of five years, on top of the 15years the company has already benefitted since its operation in Uganda in 2014.
According to the Ministry of Energy, based on the Power Production Agreement amortization formula Bujagali is paid each month US5.596 Million about Shs21.27Bn which will bring the total to US$2.014 in 30years, which money is paid by all electricity users on the national grid.
The revelation angered lawmakers like Muwanga Kivumbi (Butambala County) who lashed out at Government for renegotiating the Bujagali contract in 2018 and the subject of tariff paid by consumers wasn’t discussed, something he says has condemned Ugandans to high electricity tariffs.
“What makes it (Bujagali deal) bad, by the end of this process Bujagali takes away this is money levied on my yaka meter this isn’t money from taxes on URA. The money you pay on your yaka, Bujagali takes away a certain percentahge, every month for 30years it is going to be taking away 5.596m so after 30years they would have taken away US$2.014 Billion,” said Muwanga.
He added, “Ideally they are charging us based on the cost of money to run Bujagali which is a hemorrhage and on top of that, they don’t want to pay tax. Literally all the money they had put in they had paid it back to themselves. They still want to come to Parliament and say they want to have a tax waiver, you can see the level of greed.”
Information before the Committee indicates that Uganda extended a loan worth US$90M to Bujagali but there is no information to show that the company paid up this money and Government also made another investment to a tune of US$20M in form of infrastructure, but despite that investment, Government has class C shares which don’t come with any voting rights on the board, there is no payment for dividends.
However, Bujagali Electricity Limited has only invested US$179.8 Million and by 2015, they had redeemed all their preference shares and only retained US$10 Million in the business, yet the shareholders have earned the highest in payments of its shareholders to a tune of US$645 Million.
Paul Omara (Otuke County) while reacting to the new information compared the Bujagali deal to a company eating like a bird and shitting like an elephant, “This thing called Bujagali is eating alone, actually it is eating more than bankers who put in US$590 Million they have actually collected less money than Bujagali who has put in US$179 Million. Over a 10year period, Bujagali has taken away US$645 Million and now what they have in the company is US$10 Million, you can’t eat like a bird and shit like an elephant.”
