Africa-Press – Uganda. The Uganda Electricity Regulatory Authority (ERA) has said it is seeking to assess all electricity distribution assets of Pader-Abim Multi-Purpose Electric Cooperative Society Limited (PACMECS) to recover more than Shs2 billion.
Before its contract ended on June 30, ERA said PACMECS owed the Uganda Electricity Transmission Company Limited (UETCL) more than Shs2.5 billion.
The power company has not paid its annual licence fees to ERA for at least four years.
At the weekend, Mr John Julius Wandera, ERA’s Cooperate Affairs manager, told this publication that the authority is carrying out an assessment of the power firm’s assets and liabilities.
“They owe the government Shs2.1Bn that they have not paid to UETCL. You must note that PACMECS operated a pre-paid network, meaning they collect money from customers ahead of using power and pocketed it without paying for electricity that UETCL supplied, that money we must recover.”
He added: “We are going to examine the customer-funded assets, there are assets where consumer funds are used to buy and those belong to the customers (government), not theirs but what belongs to them, they will have to go with it as a cooperative.”
Mr Wandera was reacting to PACMECS’ claims that the government owes it more than Shs11Bn for funds it invested in network expansion and maintenance over the contract period.
On January 1, 2011, ERA issued PACMECS a distribution and sales licence for a 10-year term that expired on December 31, 2020.
However, on January 31 2021, ERA renewed the licence for 12 months. The licence was further renewed and reissued on January 1 for six months. The latest licence expired on Friday.
On June 8, ERA rejected PACMECS’ application (dated March 3) for the renewal of the licence on the grounds that the firm might not deliver services due to financial and operational challenges.
On June 16, PACMECS through their lawyers Ladwar & Co. Advocates and Odongo & Co. Advocates filed a petition at Gulu High Court seeking an injunction over the contract termination.
In the suit, it sought an order for a permanent injunction stopping Uganda Electricity Distribution Company Ltd (UEDCL) and the government from taking over the business and a declaration that the actions of UEDCL and the government to terminate the agreement is illegal.
“An order that in the event of termination, UEDCL and the government should pay them the full assessed value of its assets in the network and compensation for the loss of its business before the intended takeover,” it reads in part.
PACMECS told court that it invested more than Shs5 billion to expand and improve on the electricity supply network in the past 10 years and that the government now owes them Shs6.708Bn in system maintenance, operations and other expenses.
“The rushed takeover and conversion of its assets by UEDCL without proper valuation will deprive them of their hard-earned assets and income without adequate compensation,” PACMECS’ board chairman Mr Simon Ojok Odoch told the court.
In response, Mr Paul Mwesigwa, the UEDCL managing director, said a major fraction of the power supply lines being used by the applicant were erected by the Rural Electrification Authority (REA) and belongs to the government.
“PACMECS was neither allowed by the agreement to invest in setting up of electricity distribution network in the service territory nor did it invest in setting up an electricity distribution network in the service territory,” Mr Mwesigwa said.
He said PACMECS had consistently failed to meet its obligation under the licence and the power sales agreement and it owed UETCL Shs2.588 billion by the end of April.
In his ruling delivered by email on June 30, Justice Philip Odoki dismissed the application.
“The statutory power to grant distribution and sale licences is with ERA. The court cannot in any way usurp the powers of the ERA by granting the injunction to allow PACMECS to continue to distribute and sell electricity,” Justice Odoki ruled.
He added: “It (PACMECS) cannot distribute and sell electricity (in the area) without a license, in the absence of any licences to PACMECS, and if the court were to grant this application, there would be nobody to distribute and sell electricity in Northern Service Territory, thereby creating a stalemate.”
PACMECS claimed it expanded the network to cover the districts of Pader, Abim, Karenga, Kaabong, Agago, Kitgum, Lamwo, Omoro and Kotido. But Mr Wandera said PACMECS failed to perform satisfactorily.
“Complaints have been there, poor quality service, breakdowns in networks, and no communication, and we are sure UEDCL will wipe these out because the quality at which UEDCL does its work is beyond what has been on the ground,” he said.
Takeover
On July 1, the government through UEDCL took over the management and operations of the distribution territory from PACMECS after its licence expired on Friday.
In an April 20 letter, the ministry asked UEDCL to take over PACMECS’ mandate as a supplier.
ERA also asked UEDCL to undertake due diligence on the territory before June 30 to ensure a smooth transition. Mr Protaze Tibyakinura, the UEDCL chief of engineering and technical services says the company now envisions expanding the customer base upon takeover from the current 8,000 customers to 10,000 by the end of 2023.
“Our biggest contribution is to stabilise the distribution of electricity in these rural areas. We are hitting the ground to do metre conversion to ensure that by the end of July, all metres are compatible with modern vending systems that UEDCL operates,” Mr Tibyakinura said.
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