WITH THE MESSED UP ECONOMY, POWER TARIFF INCREASE ARE OKAY IF VAT CAN REDUCE

The NRM Government messed up Uganda's economy towards the 2011 Elections, in whatever they do, they should know that the people of Uganda are suffering because of their greed and failure to do the right economics which led to the injection of money into the economy. The wise thing to do, is at least to reduce the tariff by half.
William Kituuka Kiwanuka

Power tariffs increase okay, says Museveni

Mr Museveni

By YASIIN MUGERWA

Posted Saturday, January 21 2012 at 00:00

Electricity consumers will have to bear the brunt of increased power tariffs after President Museveni rejected calls to stop the new charges from taking effect.

The President, who was speaking at the on-going NRM Caucus retreat in Kyankwanzi on Thursday, attacked Energy Minister Irene Muloni for not consulting the NRM Caucus before announcing the tariffs. The President, according to sources, forced Ms Muloni to apologise to the Caucus.

However, the President backed the 36 per cent increase in tariffs, saying the costs of subsidising power were unbearable. “The President said the new power tariffs must go on and that Parliament cannot stop them,” a source said.

No money for subsidies
Mr Museveni reportedly said government could not continue spending billions of shillings on power subsidies when Bujagali Hydro Power Dam will be officially launched in April this year.
However, lawmakers expressed concern that although Bujagali was going to reduce intermittent load-shedding, it is irrelevant to the high tariffs.

Mr Museveni reportedly said the government cannot continue spending Shs1.7 trillion on subsidies even though Electricity Regulatory Authority (ERA) in its presentation to Parliament last week, indicated that the amount government has so far spent on subsidies since 2005, is Shs1 trillion.

ERA increased the consumer tariffs by 36 per cent and commercial dues by 69.7 per cent. But in a statement from the acting government Chief Whip, Mr Daudi Migereko, Museveni said: “It’s not right for the ad hoc committee to stop the power tariffs announced by ERA. Adjusting the power tariffs upwards is the only way of meeting the costs of producing electricity needed to run the economy .”
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The President according to sources said nobody was going to stop the new power tariffs— not even Parliament. The President also accused the Parliament’s Ad hoc Committee on Energy chaired by Mr Jacob Oboth-Oboth of being overzealous in its investigations into the alleged corruption in the power sector.
However, when Saturday Monitor contacted Mr Oboth-Oboth, he dismissed claims that the issue of power tariffs was part of the terms of reference.

“We were told to investigate the subsidies and power tariffs unless that has been changed in Kyankwanzi. We are not superimposing ourselves, our mandate is in black and white. But I need to verify the context under which the President made such remarks, otherwise our stand remains: Government must stay the implementation of the new power tariff until we are through with our investigations.”

According to the statement, Mr Museveni observed that Oboth-Oboth’s ad hoc committee had specific terms of reference which did not include stopping the power tariffs.

The committee which is investigating the allegations of massive corruption in the power sector had halted the new power tariffs until its report is debated and the recommendations adopted by Parliament.
President warned Parliament against interfering with the mandate of ERA.

The President was reacting to a statement from the Finance Minister Maria Kiwanuka who told the caucus that the construction of Karuma Dam was going to delay over unforeseen engineering challenges. The project is expected to cost$2.2 billion.

ymugerwa@ug.nationmedia.com