The planned takeover of the thermal power plant in Namanve by government could take a little longer following unresolved disputes with the firm contracted to build the plant.
On 13 April 2007, Government entered into a Build Operate and Transfer implementation agreement with Jacobsen Uganda Power Plant Company Limited (JUPPCL) for 13 years, to build, operate and maintain a 50MW heavy fuel oil thermal plant in Namanve and later transfer the same to Government. The plant estimated at Euro 27.36million was officially commissioned on 5 November 2008 by President Yoweri Museveni.
Whereas 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 for a 12-months extension which was granted. Even upon the expiry of the second term in September 2021, JUPPCL still continued to occupy the plant citing unfulfilled obligations from the Ministry of Energy and Minerals Development.
The Plant was subsequently supposed to be handed over to Uganda Electricity Generation Company Limited (UEGCL), a parastatal company that generates electric power for use in Uganda and for sale to neighboring countries.
While interacting with officials from JUPPCL on Thursday, 16 December 2021, the legislators on the Public Accounts Committee (Central Government) inquired why the firm continues to “illegally” occupy the plant even after the expiry of the implementation agreement.
“I know that government remains indebted to you but your presence at the plant after the expiry of the implementation agreement is unlawful. You do not confiscate a public facility because you are claiming a debt,” Lubega Medard Sseggona (NUP, Busiro East), the Committee chairperson said.
According to Herbert Murego Dusabe, the Company Secretary JUPPCL, government has not fulfilled its obligations as per the implementation agreements including additional investments made worth USD3.6 million.
“First, there is an issue of land ownership. The land that houses the machinery is 100 per cent owned by Mr. [Lawrence] Omulen, which he leased to Jacobsen Company,” Murego said.
JUPPCL chairperson, Omulen, said that whereas government secured 3.77acres of land, the land was inadequate and unsuitable for the plant, warranting their decision to secure additional land. Neither Omulen nor Murego could provide any documented proof of government’s commitment to pay for additional land. The additional land acquired by JUPPCL is valued at Shs1.6billion.
“It is clear that the company based on presumed consent from government to secure additional land because we have seen a letter from the Energy Ministry saying government cannot provide additional land at the same place because it is too expensive,” Hon Otiam Emmanuel Otaala (NRM, West Budama South) said.
The Committee has given the officials from Jacobsen up to Monday, 20 December 2021 to submit all the necessary documents to back their claims.
In their written response to the Committee, the Ministry of Energy said that the Ministry of Finance, Planning and Economic Development has committed to pay off the obligations before the end of December 2021 to facilitate a smooth handover of the Plant.
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