The government has lost approximately Shs 129 billion to the electricity distributor, UMEME in depreciation and return on asset since 2004 when the latter signed a contract to take over power distribution.
The loss has been revealed by the Auditor General’s 2017 annual report to parliament.
The government leased electricity distribution to UMEME in 2004 for a 20-year period.
The Auditor General’s report reveals that the depreciation cost and return on investment would amount to Uganda over Shs 11.1 billion from 2004 to 2015 and increase to Shs 13.6 billion after 2015.
“From the review of the Lease Assignment Agreement (LAA) entered into by and between Uganda Electricity Distribution Company (UEDCL) and UMEME Limited on May 17, 2004, UEDCL is entitled to Depreciation and Return on Investments on the Assets assigned for use to UMEME Limited by UEDCL on the date of signing of the agreement and subsequent investments made by UEDCL,” the report reads.
The report however adds that UEDCL has neither invoiced nor received such income from the commencement of agreement up to date.