Companies Act to cater for merger of power firms

The Deputy Solicitor General, Pius Biribonwoha says the organization to replace the Uganda Electricity Generation Company Ltd (UEGCL), Uganda Electricity Transmission Company Ltd (UETCL) and Uganda Electricity Distribution Company Ltd (UEDCL), will be provided for in the Companies Act, 2012 and not the Electricity (Amendment) Bill, 2022.

Biribonwoha said the Electricity Act should not legislate for the merger when there is an existing law governing companies.

“The Companies Act, 2012 regulates the functions of the companies, their management and other matters pertaining to the companies. Therefore, there is no need to amend the Electricity Act to provide for the merger,” Biribonwoha said.

The new Deputy Solicitor General made this guidance while appearing before the Committee of Environment and Natural Resources on Wednesday, 09 March 2022.

Biribonwoha said that the Public Enterprise Reform and Divestiture (PERD) Act also provides for formation of a successor company adding that, ‘the Electricity (Amendment) bill should leave out matters pertaining to the merger’.

Government intends to merge and down size 96 state agencies including the three electricity companies, a move intended to eliminate duplication of responsibilities and wastage of resources.

The Vice Chairperson of the committee, Hon. Emely Kugonza said his colleagues were concerned that since there were plans to repeal the PERD Act which provides for formation of successor companies, the Electricity Bill would handle the anticipated national electricity company.

“Since this is something in the pipeline and now we are making the law, isn’t there any way we can provide for formation of a successor company in the Electricity Bill?” asked Kugonza.

Biribonwoha said that the current amendment cannot legislate for the merger that has not yet happened.

“We cannot legislate in anticipation; we do not know when the merger will take place. We cannot know when the PERD Act will be repealed; things can change and government can choose not to amend it,” said Biribonwoha.

The Deputy Solicitor General was also asked to explain why the Electricity Act still makes reference to Uganda Electricity Board (UEB) which was dissolved 20 years ago.

“If UEB does not exist, why should we provide for it? Where does it operate, its functionality is not there, does it have budget, does it have management?” asked Bukimbiri County MP, Hon. Eddie Kwizera.

Bungokho County MP, Hon. John Magolo wondered why UEB liquidation has taken long and who was responsible for its completion.

Biribonwoha said that reference to UEB will be removed once the liquidation process is completed and that the mandate to appoint the completion date falls under the Finance minister.