21st April 2012
The Honorable Minister, Republic of Uganda
Re: A Petition by the Communities Affected by the Interconnection Power Projects, Uganda-Kenya and Uganda-Rwanda Projects,
The power project: The Nile Basin Initiative (NBI) through the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) is implementing two key initiatives aimed at guiding the development and trade of power in the NELSAP region - The Nile Basin Initiative Regional Power Trade Project (RPTP) and the NELSAP Power Program. In Uganda the project is being implemented through the Uganda Electricity Transmission Company Ltd, with two projects: the Uganda sections of the 172 km, 220 kV Mbarara-Mirama Hills (Uganda) - Shango (Rwanda) Electricity Interconnection Project and the 256 km, 220 kV Jinja (Uganda) - Lessos (Kenya) Electricity Interconnection Project.
2. While we support the above power projects, we are concerned about the manner in which the project developers, particularly, the Uganda Electricity Transmission Company Limited (UETCL) is implementing the project.
The objective of this petition is to present to you the problems we are facing as a result of UETCL's failure to follow the national laws and respect our rights as the project affected communities, and we request you to use your mandate as our representative to ensure that our problems are addressed.
3. THIS PETITION is a product of an assessment that was carried out in 7 districts of Ntungamo, Mbarara, Jinja, Iganga, Mayuge, Bugiri and Tororo where the above project is being implemented by UETCL. The assessment was conducted to document PAP's support and concerns about the project. More so, the petition is also a product of 3 regional dialogues that took place in Ntungamo for Mbarara and Ntungamo, Iganga for Jinja, Mayuge and Iganga and then Tororo for Bugiri and Tororo affected people and their local leaders. The intent here was to validate the assessment findings, form regional committees to provide leadership to the affected people in each project area and finally generate agreed regional recommendations for the National Policy Makers/Stakeholder forum. The National Policy Makers/stakeholder Forum (NPMF) took place in Kampala at Fairway Hotel on 22nd March 2012. It brought together key selected stakeholders including central government, Parliament, Electricity Regulatory Authority (ERA), district leaders (LC5, RDCs, etc), local communities/project affected people, religious and cultural leaders, civil society, regional bodies/Nile Basin Initiative (NBI), NELSAP and others. The assessment, the regional dialogues and the forum were all co-organized and facilitated by the Africa Institute for Energy Governance (AFIEGO) and the Uganda National Discourse Forum (UNDF), and partners in the affected communities. The forum was officially opened and closed by the Ministry of Energy and Mineral Development (MEMD). Once again, the overall goal of the above initiatives was to ensure that all stakeholders (government, project developers, affected people, local leaders and others) identify and examine the project related problems facing the PAP and mutually agree on how to address them/provide solutions.
4. WE DO APPRECIATE that the ongoing government's electricity development initiatives present tremendous opportunities for development; however, we are concerned about impunity being meted on us by UETCL staff involved in the project implementation processes.
6. WE ARE CONCERNED about the lack of transparency in the project processes regarding people's rights such as compensation, resettlement and others. Indeed, the failure of UETCL/project developer to respect the affected people constitutes the single biggest challenge undermining the many possible benefits of the proposed project.
8. WE OBSERVE that areas such as Busoga and others that host the Owen falls and Kiira dams which have been the source of over 95% of Uganda's electricity for the last 40 or so years to day remain the poorest regions in the country. This makes such projects rather irrelevant to the citizens.
9. WHILE WE TAKE NOTE of the efforts of UETCL in taking the project forward, we observe a number of areas where UETCL is failing and thus impacting on our lives and survival negatively.
We are a law abiding citizens all what we are doing is to call upon government to implement her own laws that guarantee and protect our our rights. Article 26 of the Constitution together with other enabling laws including the Electricity Act, the Land Act and the Land Acquisition Act clearly provide for our rights to property and how such property can be taken away by the government/local government for national development. The following are actions of UETCL regarding the above power projects which are violating our rights in as far as the above laws are concerned:
11. IN VIEW OF THE ABOVE CONCERNS, we the affected people, through this petition, take this opportunity to ask you to do the following for us:
a) Use up to date and current rates only: Direct UETCL to use up to date and current rates of the specific affected districts for any compensation regarding the above project.
b). Fix time for up dating compensation rates: Parliament should use her oversight powers to ensure that all districts always put in place up to date compensation rates before every end of March of each year as the law provides.
c). Time frame for paying compensation: use your oversight powers to ensure that government put in place a time frame within which a person's property is assessed and compensation paid. This time should not exceed four (4) months and any delay beyond the period of 4 months should attract interest.
d). Direct UETCL to always give written notice and copies of assessment to the affected people: All PAPs should always be given a written notice with a sketch of the property, and a copy of any document where a PAP puts his or her signature.
e). Put in place assessment and compensation regulations: Parliament should use its oversight powers to ensure that the government puts in place regulations for the assessment and compensation as required by section 20 of the Land Acquisition Act, cap 226. No project developer should have a say on a property where compensation has not been paid.
f) Establish ERA offices in the affected districts: Government should establish ERA branch offices in each affected district at least to last until the end of a project to ensure effective regulation of licensees and easy access to justice to the PAP.
g). Establish Electricity Disputes Tribunals (EDT): Government should establish EDTs in the respective districts affected by the above power projects to enable people dissatisfied with ERA's decisions to access affordable justice.
h). Affirmative action for the affected people: Government should design and integrate an affirmative action to enable PAPs to access affordable electricity as a reward for the inconvenience suffered and their support of the electricity projects.
i). Ensure participation of the affected people in the Environmental Impact Assessment (EIA) processes: The above projects should be based on EIAs where people especially the affected
communities are involved and final reports have been translated into relevant local languages and distributed widely to the affected.
j). Sensitization of communities by the government: Government should educate and sensitize people on laws and policies to enable people know and protect their rights for development. UECTL should also sensitize and provide accurate and timely information to the project affected people from the beginning up to the end of the project.
k). Investigate the actions of UETCL regarding the above projects: Parliament should urgently investigate the actions of UETCL in the assessment and compensation processes regarding the above interconnection power projects to stop the ongoing violation of rights of the affected people.
Conclusion: Once again, we all support the project but all what we want is for the developers to stop violating our rights and urgently address the injustices their actions have occasioned on us.
We Thank You.
For God and My Country.
Signed by 189 project affected people from 7 districts.
Inadequate oil laws a threat to Uganda's future development
Uganda's draft oil laws are inadequate and risk undermining prospects for the country's future development if passed by Parliament, said a coalition of civil society groups today. The coalition urged Uganda's government and international donors to listen to serious concerns raised by MPs and civil society and make the laws as strong as possible.
Uganda's Parliament is currently considering a new set of laws that will lay the ground for how the sector will be governed, including addressing the vital question of who will benefit from the new-found wealth. Recent oil discoveries in Uganda could double government income within six to ten years and constitute an estimated 10-25 percent of gross domestic product at their peak.
"The discovery of oil presents a fantastic opportunity for Uganda but also a huge risk," said Dickens Kamugisha, Chair of the Oil Watch Network Uganda. "Putting the right laws in place will help Uganda harness its new found wealth to develop and tackle poverty. Poor laws could push the country into a spiral of poor governance, corruption and economic stagnation."
In their current form, the laws place control over the sector and its revenues firmly in the hands of a few individuals at the top of government. Crucially, they exclude Uganda's Parliament from having a say over how the sector is run.
The coalition also raised concerns that the lack of any firm commitment to transparency over key contracts and other documents in the draft laws increases the risk of corruption. In addition, weak environmental and social protections, as well as the absence of any measures to include local communities in decision-making processes, increases the potential for human rights and environmental abuses.
"International donors have a role to play here," said George Boden a Campaigner at Global Witness. "They should make it clear that they cannot continue their support for the Government if it continues to ignore the views of Parliament and Ugandan civil society. Ugandans must not be kept in the dark over how their country's oil is managed."
"Important decisions affecting Uganda's future are being made now. Uganda's Parliamentarians must take firm action to strengthen these Bills, or risk being complicit in the passage of weak laws that lack any proper safeguards to ensure Uganda's people see the benefit of the oil beneath their feet," said Winifred Ngabiirwe, Chair of the Publish What You Pay coalition in Uganda.
Uganda's oil sector has had a shaky start with a number of high level corruption allegations, government secrecy, land disputes and militarization of the oil region. Several international tax disputes have also overshadowed the sector threatening to cost the people of Uganda hundreds of millions in lost revenue.
In February, the Government pushed ahead with a new agreement with UK-listed Tullow Oil that paved the way for a US$2.9 billion deal between Tullow and energy giants Total and CNOOC. The Government went ahead with the agreement despite a parliamentary resolution calling on it not to execute any new oil contracts before new petroleum laws were passed.
Will the Rural Electrification Programme benefit Ugandans?
During her budget speech this year, the minister of Finance, Ms Maria Kiwanuka allocated Shs. 1.3 trillion for the energy sector. Part of that money will work on the 400 schemes under the rural electrification project.
We do appreciate that our government realized that energy is the engine for the economic growth and development and a vital input into all the productive and social sectors of the economy. The government focused on the rural areas because over 80% of the population there lives without electricity. Indeed that is why in all the developed economies, the major war did not start with the fight against economic poverty, diseases or illiteracy, but it was fight against energy poverty.
According to the new report, almost all the new districts have been connected to the electricity including Sembabule, Kaberamaido, Kanungu, Oyam and Kibaale. Other areas in the western Uganda that have electricity include Kayonza, Buhweju, Rugyeyo, Mazizi, some parts of Mbarara district, some parts of Ntungamo district, and some parts of Kabale district.
A report by the Rural electrification Agency (REA) indicates that new diesel generators have been installed in districts of Moyo, Adjumani, Moroto and Kalangala. A total of 426 grid extension projects country wide have been implemented to support social and economic projects in communities and institutions for rural transformation. According to the report, also another 22 schemes are in the final stages of completion. And 7566 solar PV systems were installed under since the starts of energy Rural Transformation (ERT) program me in 2001.
REA's target was to achieve at least 10% electricity access for the rural Uganda by 2012 and the overall vision of universal electricity access by 2035. However rural electrification is still dreadfully far from achieving its target. The programme was at 6% in 2009, the same rate at which it still is today. The government instigated the rural electrification strategy and plan (RESP) in 2001 with an aim of increasing rural access to electricity which was then at 1%.
In addition, the whole rural electrification programme is being done without proper care on the best electricity can be relevant to rural people where over 60% of the population still live below the poverty line, no formal education, famine and other problems.
So, if the government was to carefully analyze the conditions under which the majority Ugandans especially in rural areas lives. It should be understood that the current high tariffs, high connection cost ushs 1m for say two poles, are too high for the poor to whom rural electrification programme intends to help out of the poverty trap.
The question to investigate is; can the rural electrification programme benefit Ugandans? Is it relevant to the poor if you consider the tariffs, connection or installation and operation costs, poverty and value for money?
Erecting the electric poles on the road side will not make a difference as one needs to have the pole 200meters from his house to access electricity. Only few people in rural areas can afford the connection fee. Therefore, the "equal access to electricity", which is the programme target is unlikely to occur.
The supply of electricity power to rural areas is viewed as a means to alleviate poverty in rural areas. However, it remains the most wanting commitment from the government which has privatized the electrification process.
Therefore, to achieve the primary objective of the Rural Electrification Strategy and plan, which is to reduce inequalities in national access to electricity and the associated opportunities for increased social, welfare, education, health and income generating, our government needs to form a cluster to improve rural electrification. For stance, the government can work with the private sector, academia to ensure more investments in the sector.
There is a need to rethink our power development strategies and de-programme and re-programme the power sector reform that has been there for more than a decade now.
Last but not least, unless government help the rural people by giving them subsidies or setting different tariff level for rural communities, it will be difficult for them to use electricity to improve their livelihoods.
Africa Institute for Energy Governance (AFIEGO)
The Electricity Industry in Uganda has for the last twelve (12) years under gone several structural reforms all aimed at addressing the problems associated with electricity supply and distribution network.
In 1999, Uganda Electricity Board (UEB) was unbundled to promote the industry. It was replaced by a range of distribution, transmission and generation companies for effective management of the power sector in Uganda. These include Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL), and Uganda Electricity Distribution Company Limited (UEDCL). Under the Electricity Act of 1999, a regulator was created charged with several responsibilities which include among others to license all the key players in power sector.
In May 2004 UEDCL turned out to be a consortium known as 'Umeme' which is 56 per cent Globeleq (the investment arm of the UK government) and 44 per cent Eskom (the publicly owned integrated South African electric utility). It leased the distribution subsector assets by a 20 year concession, which makes Umeme responsible for investment, charges and management of the distribution system.
Contrary to the intentions of the Power structural adjustment program, Ugandans are currently facing the worst crisis in its history. There is a 24 hour load shedding program as a result several businesses have closed down leading to loss of revenue for the country. This has been compounded by reduced power supply by thermal power generation companies like Aggreko thermal power plant that shut down due to the government's declaration that it would not renew its purchasing agreement. Also Jacobsen and Electro-maxx thermal power plants are not supplying power because of the billions of shillings in arrears owed by the government.
High electricity tariffs and power shortage are the several problems Uganda is facing today. The demand for electricity is higher than the supply. Although the electricity supply increased from 250MW to 300MW since December 2011 when Mutundwe thermal plant resumed its operations, the national demand remains 450 MW, leaving a deficit of 150MW.
There is energy poverty in Uganda most especially at household level. This is evidenced by the low consumption levels of renewable energy sources like solar, thermal, geothermal, wind and others. Energy poverty has threatened conservation, social-economic development of Uganda's economy.
When one talks of energy in Uganda, the immediate conception of many Ugandans is hydro electricity. However, this should be blamed on government that has not invested in other energy sources like biogas, solar, wind and others. The government focuses on hydro electricity as the most suitable solution to the energy crisis, having told and warned that the power will not be enough for the population.
Ugandans have the capacity to come out and utilize the abundant energy resources including Biogas energy. Every household has got wastes or manure that can be used to produce electricity. More so, there is a lot of garbage and waste around our city Kampala. That could ease the work for Kampala Capital City Authority (KCCA) of collecting and disposing the garbage, which has also wasted the tax payers' money.
The government and oil companies have made great successes in discovering commercial oil reserves standing at over 2.5 billion barrels, issued over five(5) exploration licenses, conducted over five(5) Production Sharing Agreements(PSAs), trained some Ugandans in oil, currently enacting new laws and many other positives.
Since 2006, over twenty (20) Environmental Impact Assessments (EIAs) have been carried out for a number of oil exploration and production projects in different local communities in the Albertine Graben and beyond by the oil companies licensed and authorized by the government to operate in Uganda. These range right from Petrofina to Energy Africa, Hardman Resources, to Heritage, to Tullow, Dominion, Neptune, Total, CNOOC and others. As investors, these companies have made us proud by discovering over 2.5 billion barrels of oil reserves with great potential to liberate our country and our people from poverty trap, provide the much needed revenues for education, roads, electricity, health and other opportunities.
We also appreciate the National Environmental Management Authority (NEMA)'s commitment under its great leadership for ensuring that Environmental Impact Assessments have been conducted by the developers for all oil projects in Uganda.
However, the single biggest problem in the oil sector is secrecy, corruption, outdated laws, poor EIA processes, refusal to pay taxes by the oil companies, threats to biodiversity of the Graben and other issues.
Environmental Impact Assessment processes and EIA reports have been and continue to be produced in English amidst a situation where over 80% of the participants/community people do not comprehend the language, so, even where NEMA and the oil developers have attempted to involve the people, the language has remained an obstacle.
It has been also observed that the EIA processes and EIA reports have been and continue to be produced in English amidst a situation where over 80% of the participants/community people do not comprehend the language, so, even where NEMA and the developers have attempted to involve the people, the language has remained an obstacle.
Oil activities' related to Environmental Impact Assessments have been, since oil companies showed up on the scene in Uganda, done without accompanying public hearings despite the sensitivity of the natural resource that is oil and the fact that oil is recognized by the Constitution as a resource of international/transboundary importance.
On completion of the assessments, the ensuing reports which are always in English have not been translated into respective local languages which are understood by the relevant communities of the project areas and, this has continued to make the participation of the communities ineffective which in turn affects the implementation of the recommendations in the reports.
In addition, environmental, social and equity issues linked to the use of this resource is of fundamental importance for the people of Uganda and particularly the poor and vulnerable communities whose livelihoods entirely depends on the healthy ecosystem/environment in which we live in.
Therefore, We believe that it was because of the realization of the possible impacts of oil and the need to conserve the environment which compelled the Parliament and the government to put in place laws and regulations which require that the public should be facilitated to participate in EIA processes through Public Hearings and EIA reports translate in local languages to promote community ownership of the reports for easy implementation.
National Environmental Management Authority(NEMA) should also commit to translating all the existing EIA reports on oil projects into local languages relevant to specific community and ensure that any future EIAs are duly translated.
The writer works with
Africa Institute for Energy Governance (AFIEGO)
The Electricity Industry in Uganda has for the last twelve (12) years under gone several structural reforms all aimed at addressing the problems associated with electricity supply and distribution network.
Contrary to the intentions of the Power Structural Adjustment program, Ugandans are currently facing the worst power crisis in its history. There is a 24 hour load shedding program which has seen several businesses close down leading to loss of revenue for the country hence increased inflation. This has been compounded by the loss of over 100MW from the power grid caused by government's failure to pay accumulated debts owed to Independent power producers (IPPs) like Aggreko.
Globeleq took over the Uganda Electricity Distribution Company Limited (UEDCL) in partnership with South Africa's state owned electricity firm Eskom. (Umeme is 56% owned by Globeleq and 44% by Eskom). Umeme will manage and operate the electricity distribution system in Uganda for 20 years based on the concession agreement signed in May 2004. The electricity distribution network was leased from the UEDCL, an entity of the government of Uganda. Umeme was and is to invest capital to improve the network infrastructure and establish new connections thus a promise for safe and reliable electricity and long term commitment (for 20 years). The privatization is not by the sale of assets, which remain owned by UEDCL, but by a 20 year concession, which makes Umeme responsible for investment, charges and management of the distribution system.
In the first 18 months Eskom and Globeleq invested only $5m in the system. In September 2006 they promised to invest a further $100m., using loans rather than the shareholders' equity capital of Eskom and Globeleq. It is not clear how much of the $100m in reality was the money from donors, rather than Eskom or Globeleq. Umeme also benefited from an $11 million loan from the World Bank affiliate International Development Agency to buy materials, which was turned over to Umeme. These materials were all supposed to be installed in the initial 18-months period, but were not.
These electricity companies and the regulatory body are wholly owned by the government of Uganda mandated to preserve and protect public interests.
The main consideration for the signing of the Concession Agreement was promised on an understanding that UMEME would invest US$65M in the distribution of electricity within the first five years of operation, acquire the relevant technology to upgrade the electricity distribution system, guaranteeing broader coverage of electricity usage, reduce electricity losses, create a modern billing system that would ensure that customers would be able to get accurate and regular bills, tariffs per unit of electricity consumed would be lowered considerably and load shedding would be abated.
However, in 2006 Umeme had introduced repeated price rises, was in dispute with Uganda over lease payments and tax break. In 2005 Umeme increased prices by 24%, and again in 2006 by a further 37%. An unsuccessful court case was brought on behalf of all Ugandans belonging to the Uganda Electricity Users Association (UEUA), claiming that the procedures used did not involve consumers and were not transparent as they are required to be under Ugandan law. And recently in January 2012 UMEME still increased the electricity tariffs by 40%. In Uganda, price increase is being used as a way of restoring the financial health of electricity companies. And this has a disproportionate impact on the poor, by making electricity even less affordable.
Umeme has also been demanding a tax break, claiming it should benefit from half of the tax allowances of the state holding company UEDCL, which means a windfall to Umeme of £3.5million.
Access to electricity is low in Uganda; therefore it is everyone's call to the government and all the key players in the power sector that the electricity pricing policies should be based on long-term commitment of public finance to expansion of the system to provide affordable electricity.
AFRICA INSTITUTE FOR ENERGY GOVERNANCE