8 July 2009
editorial
Kampala — Private investors in the power sector have voiced concern that the manner in which energy minister Hilary Onek handled the recent clampdown on power companies was likely to discourage investment in the sector.
While they are entitled to their opinions, the complaining investors should know that Government has a duty to protect its citizens from exploitation by unscrupulous capitalists. The Government has since 2001 given UMEME sh92b in annual subsidy to keep the power tariffs low, but Uganda's power charges still remain the highest in the region.
With a guaranteed income of sh92b yearly, there was no way the Government could sit back when power losses remained at a high 36% due to inefficiency.
The investors argue, and rightly so, that such a probe should have been conducted by the Electricity Regulatory Authority (ERA). But it should be remembered that the authority has never done an audit of the Uganda Electricity Board successor companies since 2001.
ERA only engaged Deloitte and Touche to audit the power companies in July last year following a directive from the ministry. The report has never been made public. As the overseer of the power sector, the minister has a right to investigate the regulator.
The investors in the power sector, mainly in the generation, are simply scared that the outcome of the investigations might make Uganda Electricity Company buy their power at a lower rate than usual. That is being selfish because other investors in the manufacturing, industry and service sectors need cheaper power if their goods and services are to remain competitive.
The probe aims, to among other things review UMEME's efficiency and the financial model being used in the power sector to ascertain its adequacy in determining the revenue and the subsidy level required. If Ugandans have been paying too much for power, why shouldn't they get a fair deal? Onek should crack the whip. It is the power companies that have got it wrong.
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