Attorney General Kiryowa Kiwanuka (Left) and Minister of Finance Matia Kasaija (Right-front row) appearing before Parliament’s Ad Hoc Committee on Bujagali.
The Minister of Finance, Planning and Economic Development, Matia Kasaija (pictured) has yet again admitted that the contract signed between Government and Bujagali Electricity Company was a bad deal which has condemned Ugandans to paying high electricity tariffs.
“I am being forced to disagree with my team. I don’t know what this is, either we negotiated badly. If it was a loan, we would have negotiated a reasonable interest. But for equity which is within the business, you are removing away all the funds and taking away virtually all; you don’t even pay income tax. It is really very annoying. I can’t see through any imagination, if you love your country you could do this thing,” said Kasaija.
The Minister made the admission while appearing before Parliament’s Ad hoc Committee investigating the motion by Government to extend Bujagali’s tax waiver for another five years on top of the already 15years the company has been enjoying.
During the meeting, Paul Omara (Otuke County) informed the Minister that Uganda extended a loan worth US$90M to Bujagali and also contributed the infrastructure which is valued at US$20M, but despite that investment, Government has class C shares which don’t come with any voting rights on the board and there is no payment for dividends.
Minister Kasaija was also informed that Bijagali Electricity Limited has only invested US$179.8 Million and by 2015, they had redeemed all their preferential 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.
Omara said: “Now, the Government of Uganda which contributed US$90 Million and US$20 Million in terms of infrastructure plus the tax waiver has gone away with its empty jacket, with nothing but zero. I just don’t know, we are all Ugandans seated on this table, how can we treat our country like this? Just imagine how much money we would have hemorrhaged out of this country with very limited investment and somebody has taken away US$645 Million. This makes me sad.”
Herbert Tayebwa (Kashongi County) said that according to the agreements signed, Government will only start receiving any payment in form of dividends from Bujagali after 30years and yet there is no evidence from the financial books of Bujagali that indicate that the loan extended to Bujagali worth US$90 Million was ever paid back to Government.
He said: “Possibly after 30years when the machinery that has been bought has deteriorated and can’t generate anymore. How could government have thought of putting in money that wasn’t going to generate revenue. And on the loan of US$90 Million, we have tried to examine the books we don’t see specifically where Bujagali repaid this money to UETCL.”
While appearing before the same Committee, Attorney General, Kiryowa Kiwanuka defended the proposal by Government to extend another tax waiver to Bujagali saying all the tax holidays the company has received in the past was intended to reduce the power tariff and not for government to make business.
He said, “The class C shares didn’t give us right to dividends, didn’t give us right to vote because all these things that government is doing, government isn’t doing them as a business. Government is doing them to say I need to reduce the tariff.”
However, the Attorney General’s statement was rubbished by Omara who argued that on many occasions, when Government, was involved in funding the project, there is this element where they say as government we aren’t interested in business and yet we are putting in money and yet the other party comes and takes profits.
“Which kind of mindset is that where we put money as a country and say we aren’t interested in profit, we just want this thing to go. Unless there is something behind this thing which we can’t see,” said Omara.
Minister Kasaija asked the Committee to summon the team that negotiated the Bujagali deal, saying that he wasn’t in office at the time the deal was negotiated.
