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Umeme agreement to be reviewed

28 July 2008 – The agreement between the government and Umeme, Uganda’s distribution company, is going to be reviewed due to increasing load shedding, said minister for energy and mineral development, Daudi Megereko.


Minister of energy
and mineral
Daudi Migereko

Defending his ministry’s budget allocations before the Parliamentary committee on natural resources, Migereko told the committee "We want to take a critical review of some of the agreements we signed with Umeme and l want to assure you members that we are going to deal with them."

Several MPs have called for a review of the agreement when Umeme failed to lower high power tariffs as promised. Most members want the contract terminated.

"Umeme is highly subsidised but the tariffs are still very high yet they assured us that they would reduce the tariffs. Why don’t we cancel their contract," asked Beatrice Anywar, MP.

Outages have been increasing in recent weeks, putting strain on business and residential users.

Umeme promised to cut electricity losses from 40%, however, little progress appears to have been made in this regard over the last four years. Other problems facing the utility are inaccurate meters and “extortionist” billing.

According to Patrick Ochieng, the government gave Umeme leeway in the agreement "and they have ended up fleecing the end user."

"They promised to reduce power thefts and power loss but they have not done this. Let the government review the agreement," he said.

Umeme’s corporate and public affairs manager, Robert Kisubi, said this was not the first review of the agreement.

"The review is provided for in the agreement if at all it is there. But we cannot comment on issues we have not heard unless they are officially communicated to us," he said.

He said further that Umeme does not set the fee for electricity tariffs, which are set by the Uganda Regulatory Authority.

"They decide on the cost of electricity for the entire sector while our role is to set the bills and collect the money," he said.

He attributed the current high electricity tariffs on the high cost of generation.