Monday, November 21, 2011


In 1999 then energy minister Richard Kaijuka came to parliament to get an amendment to the Electricity Bill passed that would allow his office the right to license Independent Power Producers for six months, as appropriate legislation was being put in place.

Parliament threw the amendment out insisting that the appropriate laws be expedited, arguing that the amendment was like treating a fracture with a plaster.

A visibly bewildered Kaijuka later on told journalists he was shocked that the amendment was thrown out. He thought the urgency was clear and the need for speed obvious.

Uganda is a small portfolio run by a middle level manager in Deutsch Bank, it can be turned around like this he said, with a snap of his fingers, our problem is politics, he concluded before jumping into his ministerial car and zooming out of the car park.

The laws when eventually passed led to the breakup of UEB, the privatization of its component parts and the creation of a regulatory authority.

In understanding the genesis of our current power crisis this moment probably has pride of place on the timeline.

I remember thinking that the minister was a bit politically naive to expect the amendment’s success without prior lobbying. But it also left me wondering why the major legislation was taking a long time to be brought to the house considering its strategic importance. That notwithstanding couldn’t parliament find it within itself to negotiate a middle way that would involve not throwing out the baby with the bathwater?

The current power crisis has its origins much further in the past than I know but a few inflection points stand out for me.

There was the disastrous contract to Chinese firm Sietco in the early nineties to expand the capacity of the Nalubale Dam -- Owen Falls dam then, to its current 180mw from the previous 150mw. That fiasco not only led to the termination of Sietco’s contract for corrupt practices but also put paid to local insurer Pan World Insurance Company (PWICO) who failed to make good on a sh33b performance bond.

The net effect was to delay construction, meanwhile demand continued to grow regardless.

When former US commerce Secretary Ron Brown in 1995 committed US business to build a dam at Bujagali one would have been forgiven to think that by the turn of the century work would be in advanced stages on the 250 mw facility and the dam would be done by the middle of that decade.

Determined sniping by foreign environmentalists, with the help of people like John Ken Lukyamuzi, delayed American firm, AES Nile Power long enough that financial pressures in their South American operations forced them out ten years later.

The results again is we have fallen further behind in catching up to ever growing demand.

During this sad episode with AES the World Bank and foreign donors refused to bankroll the simultenous development of the Karuma dam because they argued that there is not enough demand to sustain both dams. Norwegian backed NORPAK was planning a 700 mw dam on the northern Uganda site.

In fact as a donor condition to release funds for Bujagali, then energy minister Syda Bumba had to shuttle around the region soliciting guarantees from neighbouring capitals that they will consume Bujagali’s power when it comes online.

Bujagali’s delay coupled with the falling levels of water on Lake Victoria have forced us to contract expensive thermal generation plants that have added salt to injury.

In fact AES was committing to sell power to the grid at US6 cents a unit, a figure that would have brought power to our homes at US9cents a unit in 2006. This figure was lurched upon by Lukyamuzi and co. to bog down the dam’s development down because at the time the Ugandan consumer was paying a heavily subsidised US4 cents a unit for power. Today – thanks to Lukyamuzi et al we are paying about US12 cents a unit of power, a figure that is unsustainable as it is also heavily subsidized.

The cumulative effect of this circus orchestrated by donors, our own leaders and any number of do-gooder, is our current 24- hour loadshedding debacle. Obviously when Bujagali’s 250Mw hits the grid we will have temporary relief – a few months at most before the specter of day long loadshedding rears its head once again.

It would make for good comedy if it were not sad, to see power distributor Umeme being pilloried for the power deficit problems.

The power distributor is not beyond reproach but given the genesis of our current power crisis, Umeme is just a convenient scape goat, deflecting attention away from the real culprits in this sorry episode.

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