President Yoweri Museveni has revealed that he is still not entirely on board with the ongoing discussions to renew Umeme’s concession.
While the 25-year concession expires in 2025, and talks with government for its renewal are ongoing, President Museveni said today that he is opposed to the company’s profit making philosophy.
The president said Umeme’s drive to generate profits for its shareholders has been the reason for the high power costs in Uganda.
“One of the ideas I am fighting is that electricity and the railway are among the areas to make private profit. This is the problem I am having with a group called Umeme,” Museveni said during the Independence Day Celebrations at State House in Entebbe.
“These are private people who want to make profits, and high profits not small ones. But how can you make profits on the bone marrow, and we survive?”
“For me I think that if you are looking to make high profits there are areas where you can, such as night clubs and casinos. But when it comes to electricity which is a LCM of all products; which goes into all production, we must come up with a different.”
Umeme, which took over power supply from Uganda Electricity Distribution Company Ltd is owned largely by investment funds including Uganda’s National Social Society Fund (NSSF) and 9 other foreign based funds. About 36% of the shares are owned through the Uganda Securities Exchange and the Nairobi Securities Exchange.
Umeme made up to Shs 61Billion in the second half of 2019. The profits however, have dropped this year to 22billion because of the Covid19 lock-down which significantly slashed power demand.
Early this year, the company announced that talks had officially commenced with government for the renewal of its concession which has been running since 2001.
The team negotiating for government includes officials from the Ministries of Finance, Energy and the Attorney General’s office.
However according to President Museveni, Umeme has not yet convinced him on its plans to bring down the cost of electricity.
“They have been telling me stories and ideas but I want to study it more,” he said.
“Right now, we have enough electricity and it can be sold cheaply to the manufacturers, but people who want to make business are the ones pushing up the cost.”
Meanwhile in his speech, President Yoweri Museveni took time off to rebuke Ugandan leaders who have been speaking ill of government’s latest plan to construct several kilometres of roads inside neighboring Democratic Republic of Congo.
Cabinet recently approved the construction and upgrading of the national road from Kasindi section (border) to Beni (80kms) and the integration of the Beni-Butembo Axis (54 kms) to national road and another from Bunagana in South Western district of Kisoro through Ruchuru up to Goma (89kms).
The move however, has been opposed by members of parliament and sections of the public.
But the president today described the opponents of the plan as “shameless”
The roads in DRC he said, are essential for Uganda’s cross border trade.
“The other day I saw some people in parliament with no shame, saying why are you building roads in DRC when we have bad roads here? Yes, we have our poor roads here but we also have good roads,” Museveni said.
“But in order to build even the bad ones, we need trade with Congo and with South Sudan. We are not going there to just preach the gospel. The roads we are taking to Congo are to make business which will enable us to get more resources to deal with the roads that we haven’t done,” he said.