Shs 240.9bn Electro-maxx deal is good investment for gov’t - Daily Post Uganda

Shs 240.9bn Electro-maxx deal is good investment for gov’t

President Museveni, Patrick Bitature and Minister Evelyn Anite during the launch of 8MW Thermal power plant project of Electro-Maxx in Arua (file photo)

Op-ed: There is no doubt that government’s decision to acquire Electro-maxx thermal plant from businessman Patrick Bitature is a good deal that must be supported by all Ugandans. This is despite negative media reports condemning this transaction.
Those who have been watching Uganda’s power sector know that government has been expensively paying Electro-maxx billions of shillings of the taxpayers’ money, for power supply. However, according to economic analysts, if government buys the thermal plant, it will become a public property and be cheap to run.
Remember that Electro-maxx is the first indigenous privately-owned power-generating company in Uganda.  The power generated is sold to the national grid under a Power Purchase Agreement. As such, the government is right to acquire it on behalf of Ugandans.
Buying Electro-maxx is not a bad deal as some sections of the media would want the public to believe. The fact is that buying Electro-maxx is a good deal for government and Ugandans.
For instance, the Auditor General’s special audit report on the technical, legal, and financial evaluation of the Electro-maxx Thermal Power Plant and the modular mini-refinery facility as directed by President Museveni says the government can actually buy Electromaxx as long as certain gaps are closed. It is not a bad deal as some selfish people would want Ugandans to believe.
“I noted that Electromaxx is indebted to the tune of USD 13,978,900 and UGX.138,537,919 in regard to ascertained debts being taxed costs attendant to litigation; and unascertained debts of USD 1,412,477.76 relating to pending or threatened litigations. These may cause an impediment on the ability of Electromaxx to transfer facility assets to Government,” the Auditor General John Muwanga wrote in a report to the Minister of Energy and Mineral Development.
The Auditor General continued: “The settlement of the indebtedness of Electromaxx in regard to litigations should be agreed between Electromaxx and Government during the decision-making process,” he added after a comprehensive audit that sought to assess the legal, financial, and technical evaluation and further determine the status of the Power Plant and the Refinery to facilitate the Government decision on acquisition of the facilities.

President Museveni accompanied by Minister Evelyn Anite during the launch of Electro-Maxx Thermal power plant project in Arua.

Government, it is said, is sure the thermal plant will be useful in the years ahead, much as hydropower is available. Power from the thermal plant could be transmitted to areas where hydropower has failed. Relatedly, the thermal plant can be used to train students. Therefore, it makes sense for government to acquire Electromaxx, rather than a foreign investor who will unfairly ask for incentives such as a tax holiday, which is a disadvantage to Ugandans.
By buying Electromaxx, the government would want to help Bitature maintain other businesses that employ many Ugandans. By not bailing out Bitature, employing Ugandans in his other companies could become untenable.
This transaction, if it takes place won’t be the first in the world. Governments across the world have bailed out companies seen to be of great importance in providing certain services. This has been seen in the financial, transport, and manufacturing sectors. Therefore, the Ugandan government is not doing this blindly. It has good reasons to bail out Bitature.
Moreover, this is not the first time that government is helping a local businessman to stabilise. We have seen the like of prominent businessmen like Hassan Basajabala being helped by government. When Basajabala had his contract market contract terminated, government compensated hims with Shs 140bn.
Still, the government would want to bail out Bitature because he is a local investor who has contributed to national development, including attracting foreign capital to Uganda. This can be seen in the hospitality industry and telecom industry. Take hotels like Skyz Protea and Protea Hotel in Kampala.
Bitature is also a local philanthropist and runs Patrick and Carol Bitature Foundation, is a non-profit organization, working towards providing adequate healthcare and opportunities to disadvantaged youth in communities all over Uganda, but has also aided other organisations like churches. That means, the businessman has not been eating his money alone. These and other consideration make government want to bail out Bitature.

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