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Muhakanizi, Isabalija ‘fight’ sparks Shs 30bn UEGCL audit

PS Keith Muhakanizi and PS Stephen Isabalija

Finance PS controls government purse, but new Energy PS has Museveni’s ear

A stealth fight is brewing between new Energy Ministry Permanent Secretary, Stephen Isabalija, and veteran Secretary to the treasury, Keith Muhakanizi, with insiders saying it threatens to hurt implementation of government projects worth billions of shillings, if not defused.

Already, the fight has sparked an investigation into Isabalija’s former work station, the Uganda Electricity Generation Company Limited (UEGCL). Isabalija was the power generator’s board chairman before he was in November last year appointed to replace then Energy Ministry PS, the indefatigable Fred Kabagambe Kaliisa.

The Independent has learnt that Isabalija was hardly a month in office when the fight with Muhakanizi broke out. Insiders say it is this fight that directly resulted into a directive calling the Auditor General to investigate the power generator over its usage of billions of shillings in implementing two power dams—the 600MW Karuma and the 185 MW Isimba.

The two projects, all at over 70 percent completion stage, are expected to add some 783 MW to the national grid once completed and are estimated to cost government over US$ 2 bn.

As a board chair of UEGCL, one controls annual budget of Shs 30 billion given to the power generator for supervising the contractors—China’s Synohydro—and the entire project.

Controlling this money and the other billions surrounding the projects has been the main cause of inter-agency fights since inception and insiders say the audit was a result of another brewing fight amongst officials at the heart of the project.

While the AG’s job is to carry out audits on government entities, usually, the AG audits all entities at once and produces annual reports that are then submitted to parliament. However, occasionally, the AG finds their office carrying out special audits on entities. The on-going audit of UEGCL is one such special audit.

Given that the AG had already audited UEGCL for the annual report that came out this January, insiders say that the new audit seems to target the tenure of the former board chair as it was ordered immediately he left office and before his successor took over. It is also important to note that it is under Isabalija that UEGCL gained a lot of control of the projects in question.

For Isabalija and other UEGCL officials, the audit could be either good or bad news. Once concluded, the audit could clear or implicate those officials who were in charge at the time.

The UEGCL Spokesperson, Simon Kasyate, told The Independent that the organization has welcomed the auditors with open hands.

“We welcomed the officials from the AG’s office, provided as much cooperation as they required but we are constrained to comment on the outcomes of their findings, which they have not furnished us with,” Kasyate said, “But we are very optimistic and confident that they will give us a clean bill of health.”

The Auditor General, John Muwanga, failed to comment on the progress of the audit despite multiple calls. His handlers claimed he was held up in meetings.

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