MPs question shs 100 billion payment to Umeme by Ministry of Finance

Legislators on the Committee of Commissions, Statutory Authorities and State Enterprises(Cosase) have tasked officials of Umeme Uganda Limited, over circumstances under which the power distributor received Sshs100 billion from the Ministry of Finance.

In a meeting between the Committee and electricity power entities on Thursday, 20 February 2020, Jinja Municipality East MP, Hon. Paul Mwiru raised a red flag over an audit query where Umeme is said to have withdrawn the whole amount from the Umeme escrow account yet it was eligible to withdraw only shs65 billion that was owed to them.

An Escrow account is an account on which the government makes deposits for bills. Umeme is only supposed to withdraw from that account if the government is in arrears of 60 day after giving the Uganda Electricity Distribution Company limited (UEDCL) a 14-day notice.

According to the report, Umeme withdrew the whole Shs100 billion yet the government only owed it shs65 billion in arrears of 60 days.

“You helped yourself to money that was over and above what you were actually owed by the government without any explanation. You have thrown UEDCL into a position where it is struggling to recover the money,” added Mwiru.

Umeme Managing Director, Selestino Babungi stated that the government was heavily indebted and that the payment was made by Ministry of Finance directly to Umeme.

“Umeme would never pay itself in excess of money not owed to it,” said Babungi adding that, “the Ministry made the payment and through the accounts of the other government agencies that had bills to be cleared”.

He added that the money was never paid through an escrow account.

The UEDCL Managing Director, Paul Mwesigwa confirmed that the money had not been paid through an escrow account but directly.

However, he argued that the government only owed Umeme shs65 billion in arrears.

The MPs called for a verification of the report of the Auditor General on the issue and all respective entities involved would be summoned at a later date to handle the issue.