So, there I was minding my own business, playing marbles if you want to know, when I spied at the corner of my eye the son of my Granddad, Late Fidele Lodi, standing akimbo keenly observing my activities. The department in the recesses of my mind in charge of crime intelligence quickly started turning the sheets to obtain a record of my activities to determine if there were some actions or commissions that fell short of par. Try as it might the intelligence department returned a blank. I was left in the dubious position of the being between the devil and the high seas. So I continued marbling.
Just then he bellowed my birth name and, quick as an arrow, I hasten to respond to his call. Then he asked, “Why don’t you take your grandfather to the museum?” Having no real objection to the said task, we soon found ourselves hobbling to the museum with the said grandfather. The museum provided us useful bonding time and we passed without much interest the ancient cars, (the one of Sir Hesketh Bell), the caricatures of early man in his caves and other such mundane pieces.
As we approached the gun section, I felt a sharp grip on my shoulder; some thing had excited the old man. Looking furtively, left to right he revealed a long kept secret of the guns in question and also other matters which are still under investigation. He introduced into the family parlance the word, “chakalejum!” Which I later on learnt was a corrupted version of sacrilege. And sacrilege is what we would like to discuss as we look in wonderment at the rising consumer prices of power.
Uganda adopted a strange model for improving efficiency in the electrical sector. The sole energy company was, if you allow, “unbundled” into four entities. Generation, transmission, distribution. This was a time when “unbundling” was in fashion. Uganda Posts and Telecommunications was unbundled into Posta, handling letters and packages and Uganda Telecom Limited handling voice and data.
The rationale in posts and telecommunications is clear since these are clear and unique business entities. For the energy sector the rationale is rather hazy; the product/service is the same and is now being handled by four, nay five entities; since the distributor subcontracted, for whatever motive, another company called UMEME. It is the most inefficient and extravagant relay race; smacks of clever mafia activity if one were to be brutally honest. You see, the original company Uganda Electricity Board, owned the Generation plant at Owen Falls Dam, it also owned the Transmission Lines. So it would generate power and transmit it and distribute it.
The consequence of unbundling was creation of a generation company; Uganda Electricity Generation Company, a Transmission Company; Uganda Electricity Transmission Company, a Distribution Company; Uganda Electricity Distribution Company and the subcontractor; UMEME. All these companies have robust human resource structures, highly paid and incentivized Chief Executives and Executive perks. Its is the height of dis-ingenuity, naivety, or unbridled hypocrite tendencies to ask where the commercial losses, in 2016 estimated at 19%, are coming from.
The rush by the UMEME people to calm the President, who ought to be better informed, is akin to feeding a rat hoping it will turn into an elephant. In this electricity value chain, Uganda Electricity Transmission Company was designated as the single authorized buyer. In short we created a monopoly in the purchase and sale of power.And they created a profit eating cabal.
In between those creatures created by Parliament and law UEGCL and UETCL there lies an instrument which determines the cost of purchase of the power generated. Between UETCL and UEDCL there, reasonably, ought to be another memorandum determining the rate plus mark up; remember all these entities are not charitable organizations. And finally between UEDCL and the subcontractor UMEME there is another agreement or “aniangment”. Have you seen where the commercial losses occur? I have deliberately avoided speaking about the regulator Electricity Regulatory Authority.
It would help the reader know that UMEME is not the only distributor in the country. Uganda has eight electricity distribution companies, to wit: UMEME, WERENCO, Bundibugyo Electric Cooperative Society, Kyegegwa Rural Energy Cooperative Society, Pader- ABim Community Multipurpose Electric Cooperative Company, Kilembe and Kalangala Infrastructure Services.
On the generation side, power is purchased from: Eskom, Bujaagali, Jacobsen, Electro AS, ElectroMaxx and several other smallholders. These ones sell to you remember who at an agreed price. Have you understood the challenges and why consumer prices keep rising?
#TO BE CONTINUED