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Delayed rationalisation of govt agencies affecting energy sector

KAMPALA, March 13, 2024 – The delayed merger of three electricity companies belonging to government has disrupted service delivery in the Ministry of Energy and Mineral Development.

This was revealed by top officials in the ministry during a meeting with parliament’s Committee on Environment and Natural Resources on government’s readiness to merge Uganda Electricity Generation Company Limited [UEGCL], Uganda Electricity Distribution Company Limited [UEDCL], and Uganda Electricity Transmission Company Limited [UETCL] into one company dubbed Uganda National Electricity Company [UNEL].

The officials were led by the Minister of State for Energy, Sidronius Okaasai and the Permanent Secretary, Irene Bateebe.

“By delaying mergers, we are missing a lot on service delivery – some staff have left and yet we would like to retain our technical expertise,” said Okaasai.

Okaasai said the ministry is currently offering short-term contracts to the staff of the affected companies awaiting the merger, observant that the current employment arrangement cannot retain staff.

He said the proposed national electricity company will carry out all the functions of the three companies and UMEME, the largest electricity distributor in the country.

UNEL will require at least 3,000 staff to effectively operate, as it will have regional offices to ease coordination, according to Okaasai.

The ministry’s Permanent Secretary, Irene Batebe, assured the legislators that the ministry intends to absorb the majority of the staff of the companies to be merged.

MPs observed that the ministry is not yet ready for the merger and tasked the permanent secretary to justify the cause for rationalisation, such as the cost to be saved and the means of achieving efficiency.

“Can you show this committee a study you made that by merging, this is the cost you will save? For 20 years you operated the Uganda Electricity Board [UEB]. Are there any issues realised that we can now avoid? This will give us confidence as a committee, said Eddie Kwizera, Bukimbiri County Member of Parliament.

Committee Chairperson, Emmanuel Otaala who is also the Budama West County South MP tasked the ministry to provide the wage bill for the soon-to-be merged companies and the proposed wage bill for the new company.

“You seem to be missing the gist of rationalisation which was mainly to avoid duplication of roles and reduce wasteful expenditure. it will help us appreciate that this merger is well-intentioned if we see the wage bill of the three companies and the proposed national electricity company,” said Otaala.

The MPd expressed discontent with the rationalisation of the Rural Electrification Agency [REA] whose work they said has been left unattended to.

“Much of the work REA was doing is not being worked on, not even a 10th of it has been achieved. Are we not going to have like three or more years of no service? asked Bunya County West MP Aggrey Bagiire.

Rubanda County West MP, Moses Kamuntu, said the electricity poles installed and powered by REA in his constituency have never served the purpose due to lack of a transformer.

The committee asked the ministry to undertake a thorough assessment of the merger, reviewing past and recent reforms in the electricity sector.

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