Kampala, Uganda | THE INDEPENDENT | Unresolved disputes have delayed the planned take over of the Namanve thermal power plant by the government, members of the Public Accounts Committee (PAC)- Central Government have learnt.
On April 13th, 2007, the government entered into a Build, Operate and Transfer implementation Agreement with Jacobsen Uganda Power Plant Company Limited (JUPPCL), for a 50MW heavy fuel oil thermal plant in Namanve for 13-years.
President Yoweri Museveni officially commissioned the plant estimated at Euro 27.36 million (approximately Shillings 97.4 billion) on November 5th, 2008. The government was supposed to take over the operations of the plant after the expiry of the first term of the implementation agreement in September 2020.
The firm requested a 12 months extension period, which was granted. However, even after the expiry of the extension period in September 2021, the company is still holding on to the plant citing unfulfilled obligations by the Ministry of Energy and Mineral Development.
Information before PAC shows that JUPPCL was expected to hand over the thermal plant to Uganda Electricity Generation Company Limited (UEGCL). On Thursday, legislators on the PAC- Central Government questioned officials from JUPPCL why the firm continues to occupy the plant premises even after the expiry of the implementation agreement.
The Committee chairperson Medard Lubega Sseggona confirmed that the government is indebted to the company but noted that their presence at the plant after the expiry of the implementation agreement is unlawful.
Sseggona questioned the legal basis of the continued occupation of the plant by Jacobsen.
In response, Herbert Murego Dusabe, the secretary JUPPCL said that the government has not fulfilled its obligations as per the implementation agreement including additional investments worth US Dollars 3.6 million (12.8 billion Shillings).
He noted that the land on which the plant sits is 100 percent owned by their chairperson Lawrence Omulen, which he leased to the company. However, Sseggona said that this is another query for which the committee is seeking answers.
Omulen said that whereas the government secured 3.77acres of land, it was inadequate and unsuitable for the plant warranting their decision to secure additional land. However, the officials failed to provide any documentary evidence of the government’s commitment to pay for the additional land. The land totaling 0.85 hectares acquired by JUPPCL is valued at 1.6 billion Shillings.
Emmanuel Otaala, the West Budama South MP said that it was clear that the company was based on presumed consent from the government to secure additional land. “Because we have seen a letter from the Energy Ministry saying the government cannot provide additional land at the same place because it is too expensive and that the land provided is too sufficient,” he said.
The Committee gave the Jacobsen officials up to Monday next week to submit all the necessary documents to back their claims. In their written response to the Committee, the Ministry of Energy said the Finance Ministry have committed to pay off the obligations before the end of December 2021 to facilitate a smooth handover of the plant.