Electricity distribution company Umeme has received backing from Electricity Regulatory Authority to continue negotiations with government to harmonise the factors that can lead to a reduction in price of power – after the President castigated Umeme for exaggerating investments and failing to eliminate technical losses, reports Moses K. Mugalu.
Speaking at a media briefing to address the state of the energy sector in Kampala yesterday, Ms Ziria Tibalwa Waako, the ERA chief executive officer, said that whereas; “we appreciate the concerns of the President that we need a tariff that is affordable to boost industrialisation”, there is need to understand that the cost of capital recovery (interest on loans) continues to be high, a situation that has not been helped by low demand for power.
Ms Tibalwa (pictured up) also advised that Umeme, as a company that has been in Uganda should discuss with government on how they could come to a common understanding to ensure that they continue to deliver service without negatively impacting the economy.
For much of this year, discussions from different quarters over the renewal of Umeme’s concession have been at the centre stage.
Both Parliament and the Executive have been in deep reflections probing claims of exaggerated investments and higher end user tariffs.
In a February letter to the Minister of Energy, President Museveni wondered why Umeme had failed to eliminate technical losses that stand at 9.9 per cent.
Government also understands that with the nature of investments we are currently undertaking is worth hundreds of billions of shillings.
We need an extended period beyond the remaining seven years of our running concessions to ensure that the shortages such as load shedding which we experienced as a country before does not re occur.
This will also allow for appropriate spread of our investments and automatically much lower tariffs to end users.