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Umeme under attack again

Uganda’s parliament is currently locked in a battle over the contracts of electricity distribution company, Umeme, and generation company, Eskom Uganda.

This, despite the fact that members of the Association of Professional Electrical Contractors (APEC), at a specially organised a press conference,  begged government not to terminate the contract, saying the move will be disastrous to the Ugandan economy.

The Association argues that the MPs decision was not in the interest of the public and according to Ssemakula Paul, the Secretary General of the Association, a request was made to government to treat MPs recommendation with the contempt it deserves.

With almost 400 suppliers and contractors directly doing business with Umeme, an estimated 10,000 people are directly or indirectly employed by the electricity company due to the multiplier effect. It’s reported that about $ 22. 3m was being fed into the economy through people doing business with Umeme in the form of contracted business deals and payment for the work and services delivered.  This, in addition to the belief by association member that Umeme has met and exceeded all performance indicators as prescribed in the concession contract, including reducing power losses from 40 percent in 2004 to 20 percent were it stands now.

In April 2014, Minister of Power, Irene Muloni warned the Ugandan Cabinet that “if the concessions (of Umeme and Eskom) are terminated and placed into the hands of speculators, the power sector will inevitably collapse and the entire economy may collapse with it. The recommendation is not tenable!”

She told the MPs that the committee discovered that the government would compensate Umeme whether it terminates the contract, whether Umeme terminates the contract or whether the contract comes to its natural end.

She said that in an event that Umeme terminated the contract, the government would pay it $129 million, if government terminated the contract, it will pay Umeme $147 million and if the contract came to its natural end, the government will pay it $98 million.

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