Uganda Thermal Power firms resume supply

Wednesday July 13, 2011

LOAD shedding is set to reduce, after two private thermal generating plants resumed operations, energy minister Irene Muloni said yesterday.

Aggreko and Electromaxx shut down operations last week following governments’ failure to pay arrears amounting to sh207.5b as of June 30.

The closure has caused an acute power shortage and resumption of the daily 12-hour load-shedding.

“I want to assure you that discussions are being held with fuel suppliers. As I speak, Mutundwe is on and Jacobsen in Namanve is also on,” Muloni told the legislators.

“We feel for our people and do not want our economy to suffer as a result of power shortage,” she said.

Aggreko and Electromaxx demand sh455.96b from the Government in arrears and subsidies. A total of sh139.8b will cater for the Mutundwe power plant, while another sh316b will be for Kiira Aggreko and Electromaxx-Tororo and Jacobsen Namanve.

Muloni explained that the Government had since 2005 been paying 60% of the power consumed by every Ugandan in subsidies. She revealed, however, that Kiira power plant would not resume operations following the expiry of its contract in June. Its power will be compensated following an increase in power generation of up to 40 megawatts that resulted from increased water flow at Nalubale and Kiira power stations.

Muloni also told MPs that her ministry would next year start using locally produced crude oil to run heavy generators to generate power. She said load shedding and reliance on thermal generated power would reduce in November when the first unit of the Bujagali (50megawatts) project is expected to be switched on. The whole Bujagali project (250 megawatts)is expected to be commissioned in April next year.

Energy ministry’s permanent secretary Kabagambe Kaliisa said the arrears resulted from non-payment of subsidies of four months since March 2011.

Finance state minister Aston Kajara told journalists that the Government would process the sh31b approved to pay off the generators in the meantime.

“We have to bear with them because they are also commercial people. They cannot afford fuel. That is why most of them switched off the plants,” he said.

Kajara and Muloni were appearing before the Budget and Natural Resources committees yesterday to defend a request for sh61.3b over and above the vote on account.

MPs refused to approve the money saying the minister has to first write a corrigendum to the budget.

“This money is supposed to be spent throughout the year. Our committee cannot authorize you to acquire it in one lot. Go back on the drawing board, prepare and bring a corrigendum on the floor of parliament,” ruled budget committee chairman Tim Lwanga.

Kajara said the remaining sh155b would be got from the donor funded Poverty Reduction Support Credit nine. MPs were opposed to using PRSC 9 funds to pay arrears saying arrears should first be approved by the Auditor General and ministry of Justice.

“This money is donor funded what if they learn that we want to divert it for arrears and as such refuse to release it?” Franca Akello (FDC) asked.

Accountant General Gustavio Obwoch explained that arrears could not be charged directly on the consolidated fund because they had to be budgeted for under the normal budgeting process.

Odonga Otto (FDC) demanded that the energy ministry provides a detailed month to month billing of power supply by the thermal generating companies to ensure value for money.

Benjamin Cadet (Independent) wondered whether there was value for money in thermal generation. “Have you reconciled energy use versus its generation?” he asked.

By Catherine Bekunda and Michael Ochakolong: The New Vision Newspaper