By Mulengera Reporters
On Wednesday, Kazo County MP Dan Kimosho chaired a session for his natural resources committee. He was flanked by his vice chairperson Anna Maria Nankabirwa, the Kyankwanzi Woman MP. In attendance were top officials from the Ministry of Energy and UEDCL.
The MPs had days earlier completed a fact-finding tour in the field where they sought to establish the extent to which the GoU-favoured private manufacturing companies benefiting under BuBu provisions, were thriving and adding value to the economy.
During the tours, lots of problems were established especially those relating to access, cost and availability of electricity whose provision is one of the things the Energy Ministry and UEDCL are mandated to handle. In his opening remarks, Kimosho told the Tuesday meeting the MPs were not impressed with what they discovered.
During those tours, the private companies, supported under BuBu with the intention to boost the local firms’ capacity and to amplify job creation and export volumes, told MPs many things including electricity being off most of the time. They complained about the cost and billing too, not being adequately transparent.
The Wednesday session was meant to enable the officials of Energy Ministry and UEDCL to come face to face with representatives of the firms so that common ground can be found. Whereas several companies were present, the meeting adjourned (shortly before 11am) when only one BuBu company had been heard from. This was Orion Transformers & Electricals Ltd. As obliged under BuBu, UEDCL and Energy Ministry were compelled to stop importation and buy electricity meters and transformers (used to operationalize electricity sub stations) from them.
Such BuBu-supported companies are deliberately favoured and shielded against competition from foreign firms during major procurements by the Energy Ministry and all its sister agencies charged with generation, transmission and distribution of electricity. They actually are ahead of the competition up to 15% right from the inception of such public procurement undertakings.
The GoU wants them to build capacity and manufacture stuff from within Uganda so that foreign exchange, that would have been expended on importation, is saved and kept within the country. The MPs were angry that companies like Orion (which famously had been fronted to sell tens of thousands of small radios to the GoU to enable Ugandans listen to the President’s addresses during Covid19 lockdown) have been pampered to access government billions under BuBu yet the President’s original objective of domestic growth for job creation isn’t being achieved.
“We wholeheartedly support BuBu but not fake things like this. Its all about mitigating against capital flight and this country wouldn’t be facing dollar problems today if companies like Orion do what they are supposed to do. They dupe government that they are manufacturing locally here so that we don’t lose our dollars to importation but in actual sense, they are just assembling. Everything they are using is imported as you can see,” Dan Kimosho protested as some committee members suggested that Orion be treated leniently because private sector firms’ operations are very complicated out there.
Led by Anna Maria Nankabirwa, the Kyankwanzi Woman MP who said herself has previously operated private business and discovered things aren’t easy, some MPs had suggested that Orion representatives be tolerated getting away with it without being made to answer tough questions since they don’t represent any MDA to which public money is appropriated by Parliament.
Kimosho said it was unacceptable for UEDCL to be required or compelled to invest as much as Shs100bn supporting the capacitation of such BuBu-certified local companies only for the Orion representatives to be permitted to breach basic corporate governance practices.
Eloquent as always, the committee chairman was angry that the jobs supposed to be created for native Ugandans were nowhere to be seen yet UEDCL and Energy Ministry continued signing away billions on monthly basis to pay for not-so-very good quality generators and electricity meters.
Having led a delegation of MPs who toured Orion premises recently, Kimosho said there was no evidence that the firm has even a fraction of the required capacity to locally manufacture the hundreds of transformers and electricity meters they monthly keep supplying to both UEDCL and the Energy Ministry under the World Bank-funded rural electrification scale up intervention.
Introducing himself as the head Corporate & Public Affairs, the Ugandan gentleman who spoke on behalf of Orion (some MPs branded him a machinery/muchuba from Nasser Road) claimed in his opening statement that the company had since 2019 manufactured and supplied to Energy Ministry and UEDCL more than 800 high quality transformers, something majority MPs disputed. Led by Kimosho, the MPs maintained that the Chinese-owned but locally-incorporated company was simply assembling and not manufacturing transformers.
This scepticism was based on what they saw with their own eyes during the site visit to the company’s premises recently. Kimosho said what they saw didn’t demonstrate any manufacturing capacity; implying that the firm simply imports parts which they assemble to put together a transformer and sell to UEDCL and the Ministry.
The company representatives contradicted themselves when asked where the raw materials and other inputs used to manufacture meters and transformers are got from. When pushed hard, they deceptively claimed that they are importing only steel because that currently can’t be locally sourced from inside Uganda.
The MPs considered all this to be a breach because under BuBu, the firms get such lucrative contracts on condition that they will boost Uganda’s economy by buying and using locally-sourced raw materials, inputs and human resources. This is President Museveni’s way of saving on the scarce dollars and building Uganda’s local capacity.
Kimosho also demanded to know how the company can manage such sophisticated manufacturing when the electrical engineers it has are lowly qualified. He demanded to know why during their recent visit MPs only saw technicians with certificates and diplomas if indeed the company has degree holders among its staffers.
Upon coming under intense pressure, the company’s representatives shifted goal posts and admitted that all the top qualified engineers are Chinese who were brought in to specifically train and facilitate knowledge transfer to capacitate Ugandan ones.
The MPs insisted that the company had had enough time to have complied with BuBu provisions relating to capacitating local personnel. Kimosho demanded to know how a company can have a certificate holder serving as its head technical department and it still has capacity to do such sophisticated manufacturing.
The Chinese big boss seemed to be linguistically-constrained and delegated the Ugandan gentleman to do much of the talking. The MPs became angrier upon being deceptively told that the company currently employs 44 Ugandans and 10 Chinese. The MPs dismissed this as deceptive and different from what they saw when they physically visited. They saw more Chinese than Ugandans yet here was the representative attempting to sell to them a lie.
Kimosho demanded to know whether the company is NSSF-compliant, a question to which the representatives answered with a yes. The MPs remained sceptical and demanded for proof, which couldn’t be readily furnished. At the instigation of MPs Naomi Kabasharira (Rushenyi County in Ntungamo) and Sarah Wekomba (Bulambuli Woman MP), Kimosho demanded that the representatives present their work place IDs and they had none. It was at this point that the company was accused of hiring machineries/bachubas to come and interface with the Committee in order to put out a facade.
MPs wondered how someone could serve as the head CPA at the company for two years without his employers ever finding it necessary to process for him an employee ID. As the representatives struggled to explain away this anomaly, another MP asked for permission to say something. Kimosho let him and the MP explained how he had just perused the company website. That he had discovered none of the people featured or listed there as the members of the top exco was present in the Committee.
The representatives present attempted to explain that away by claiming that those appearing on the website don’t reflect the current situation. They claimed there had only been a delay in updating the website to reflect the current top management composition.
MPs rejected this explanation as deceptive and then the tough questioning turned onto the UEDCL CEO who was present. Dan Kimosho demanded to know how a company so shabbily-organized could emerge best evaluated bidder for the very big transformers and meters supply procurement contract which is on the verge of being concluded.
The MPs demanded to know why a company into which so many GoU billions have been sunk for the purchase of transformers and rural electrification meters purchases can fail to have basic things in place. The MPs expressed doubt that the President’s desired BuBu outcomes can ever be met with such floppy companies having a lion’s share of the procurement deals.
Orion Transformers & Electricals representatives had at the beginning of their submission put blame on the UEDCL top management and the leadership at the Energy Ministry-claiming that their company has cash flow problems sometimes because their monthly invoices are rarely paid or cashed on time.
MPs were told that each transformer supplied costs between Shs11m (for the 25KVA capacity) and Shs70m (for the 1,000KVA capacity). Orion is contracted by UEDCL to do both supply of new transformers and maintenance/servicing of old ones. The people’s representatives were told that as of today, Shs2.5bn was outstanding (namely work done and stuff supplied but for which UEDCL hasn’t yet paid the money).
It was claimed that such delayed payments constrain Orion’s capacity to scale up production or manufacturing of transformers and generally improve its capabilities as a GoU-supported company under the BuBu intervention. The Orion representatives also demanded that the Energy Ministry and UEDCL upgrade their ‘grid’ to avoid ‘grid surge’ instances which often destroy transformers. That when this happens, the two MDAs blame Orion for supplying anomalous stuff whereas this isn’t the case.
The company reported to MPs that sometimes the two MDAs send back or return to them transformers found to have fundamental defects. That out of the 544 transformers that have been supplied to UEDCL in the last two years, only 14 have been returned for being defective. In that case the supplier fixes the defect and brings the same back to the two MDAs. The representatives asserted that having 14 defective ones out of 544 transformers is normal and acceptable, meaning there was nothing for MPs to be alarmed about.
The MPs remained doubtful that this company, the way they saw its premises, has capacity to locally manufacture so many transformers for UEDCL and the Energy Ministry who they claimed to have been supplying to since the year 2019. The company representatives insisted they can excel better and deliver much more once the two MDAs improve and begin paying them promptly in response to their monthly invoices. It was acknowledged that timely payments have been improving lately since the new CEO took charge at UEDCL.
Still unsatisfied, the MPs demanded to know who at UEDCL handled the certification and due diligence at the company’s premises before they were contracted. The CEO signalled Mr. Innocent Byamukama, the head PDU at UEDCL, to step forward but MPs didn’t promptly fire any question to him because there was no time. Still doubting the firm’s capacity to manufacture such transformers (as opposed to merely assembling them), Kimosho demanded to know their monthly electricity consumption. And he was told it stands at 30KWs per month and at a cost of $3,000.
The MPs demanded that UEDCL clarifies this monthly electricity consumption and bill to authenticate this claim but the session ended before answers could be furnished because the Energy Ministry delegation members had to leave after Minister Olupot Okasai indicated the President was waiting for them at Entebbe State House.
A fire-breathing Kimosho reluctantly halted the Wednesday hearing and moved the same to Thursday 9am when everyone is expected to convene once again for a resumption session. It was made clear that the committee guests must be more organized and more truthful or else Kimosho won’t hesitate locking up deceptive witnesses. In fact, during the Wednesday session he wanted to lock up some but was restrained by his vice Anna Maria Nankabirwa who pleaded for lenience. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
