Jude Etyang
30 April 2004
Kampala — THE Electricity Regulatory Authority's (ERA) decision on a new tax to be paid to Jinja district administration by the Uganda Electricity Generation Company (UEGCL) will be made on May 7.
UEGCL and Jinja administrators disagreed on the fee and had been holding settlement talks at the ERA office in Kampala.
The district had proposed that UEGCL pays 12% of their annual income which amounts to about sh4b. However, UEGCL's lawyers proposed to pay 1%.
UEGCL argued that if the 12% rate was to be accepted, tarrifs on power consumption would have to be raised so as to balance the royalty charge.
Jinja had dragged UEGCL to court seeking payment of sh4b as royalty for 2004.
But the head of the Commercial Court, Justice James Ogoola, referred the case back to ERA for settlement talks before court's decision.
According to the Electricity Act of 1999 a power licence holder paid a royalty fee to the district local government in which the dam was situated a royalty fee agreed upon by the licensee (UEGCL) and local authority.
In case the licensee and district authority fail to agree, the act says the Electricity Regulatory Authority (ERA) will determine the royalty to be paid.
Before the talks the district had disagreed with UEGCL over the royalty fee.
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