UETCL Faces Shs777 Billion Liability Amidst 136 Court Cases

Members of Parliament are raising alarms over the substantial contingent liability of Shs777 billion facing the Uganda Electricity Transmission Company Limited (UETCL), stemming from 136 ongoing court cases. The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) reviewed the Auditor General’s report for the 2024/2025 financial year, highlighting the potential strain on public finances and the electricity sector.

During a meeting with UETCL officials, COSASE Chairperson Hon. Muwada Nkunyingi noted that many of these disputes arise from preventable issues in land acquisition, compensation, contract administration, and project management. Concerns were also raised about the regularity and effectiveness of UETCL’s contracts committee, with questions about whether key decisions were made by a single individual.

Further scrutiny revealed that some contractual agreements mandate dispute resolution outside of Uganda, prompting the committee to investigate the approval process for such clauses. MPs questioned the legal department’s role in advising management against decisions that have led to costly litigation.

UETCL’s Company Secretary, Stella Ladona, explained that some cases involve project-affected persons (PAPs) who reject compensation offers. The company’s CEO, Eng. Richard Matsiko, assured the committee that funds are available to compensate around 8,000 PAPs affected by the Karuma-Tororo transmission line, with payments expected within six months for those who accept the offers.

The significant liability includes Shs22 billion for delayed PAP payments, Shs30 billion owed for a Tororo substation, and a substantial Shs500 billion related to a case filed by Umeme Limited, currently being heard in London. These issues underscore the need for improved oversight and management within UETCL’s operations.

Source: https://www.parliament.go.ug/index.php/news/4602/uetcl-facing-136-court-cases-possible-shs777-billion-liability