Umeme Limited, Uganda’s largest power distributor has run out Yaka meters, affecting new customers/connections, Business Focus has reliably established.
Reports indicate that people who applied and paid for Yaka meters almost three months ago are yet to receive them as the power distributor continues to play ping-pong; a thing that has left many counting losses.
This crisis is affecting all Umeme branches, with Bwaise and Nateete the most hit.
A number of victims say Umeme has been telling them that they have run out of materials, a thing that has paralyzed their businesses.
“I had tenants willing to rent my houses, but failure to get Yaka meters from Umeme for the last two months has cost me business,” a victim, who spoke on condition of anonymity, told Business Focus.
This state of affairs saw the disgruntled customers on Wednesday December 6, 2017 cause a brawl at Bwaise branch over delayed issuance of their Yaka meters.
“There was a big quarrel at Umeme Bwaise branch on Wednesday by people who paid for Yaka meters as early as September,” a source said, adding that Umeme has run out of answers-for they have been telling them to “come back next week for the last two months.”
“This was a warning to Umeme. If they don’t respond quickly by availing to us our meters, we are going to organize a bigger strike,” the source added.
When contacted, Stephen Ilungole, the Stakeholder Relations Manager –Media and Communications said general complaints were unfair to Umeme.
“There could be some delays here and there, but new connections process is running normally,” Ilungole said.
On exorbitant and unclear ever changing monthly service fees, Ilungole said: “Service fee is a mandatory charge determined by the regulator (Electricity Regulatory Authority). Like with any other levy, Umeme never determines fees it charges its customers. We are price takers as determined and approved by the regulator.”
Yaka is the prepayment system from Umeme that allows customers to conveniently manage and control their electricity. It works much like buying airtime for your mobile phone line, when the units are used up, the customer can buy more to continue using the service.
It is worth noting that Umeme recorded a net loss of Shs47.5bn in the first six months of 2017, against a Shs54.5bn profit a year earlier.
Umeme Bad Deal
If there is any deal that has been negotiated badly on earth, it’s a concession between Umeme and Uganda government to manage power distribution in 2004.
Among the mind blowing closes of the concession that put Uganda in a tight corner includes the government being obliged to pay 120% of the total Umeme investment should the government initiate termination of the contract.
On the other hand, in case Umeme chooses to initiate the termination of the contract, the Government is still obliged to pay 80% of the total Umeme investment. What a deal?
Government also negotiated on behalf of Uganda that in the event of natural termination of the contract, government would have to pay 105% of the amount Umeme invested at the time of termination, which would be over Shs294bn.
Natural termination of the contract is when the contract expires and the contractor (Umeme) claims they have not recouped their total investments. The agreement also reveals that in case of termination of the contract due to circumstances beyond the control of both parties (Force Majeure), government pays 90% of the invested money.
This would be not less than Shs252bn. Such circumstances include war, riot, strike, crime, flooding or earthquake or volcanic eruptions.
The contract also obliges the Government to pay an interest of 20% per annum of any outstanding portion of the buyout amount should 91 days elapse after the termination date until it clears the money in full.
The other clauses that gave Umeme a blank cheque are Section 2.1 (U) (ii) of the Lease and Assignment Agreement, which states that should Umeme be indebted to, say its Ugandan shareholders by the time of terminating the agreement, the government will either pay off or cancel the debt(s).
Section 9.5 of the Support Agreement removes the immunity of the government from claiming its assets in case Umeme brought any legal proceedings against it.
Very heavily skewed in Umeme’s favour, the contract has made it very hard for Parliament to terminate the distributor’s concession despite the fact that it has become a pain in the lives of Ugandans.
Former Permanent Secretary at Ministry of Energy, Fred Kabagambe- Kaliisa was Uganda’s chief negotiator.
During the 2004 agreement, former Finance Minister Gerald Ssendaula signed on behalf of the Government, Irene Muloni, now Energy Minister signed for the Uganda Electricity Distribution Company Limited (UEDCL) as then Managing Director, while former director David Grills signed on behalf of Umeme.
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