Government has been urged to streamline its procurement processes to lower project costs.
Speaking at the fifth annual chief executive officers’ summit in Kampala last week, Standard Chartered Bank managing director said the procurement processes in Uganda are a nightmare and require urgent attention as they increase the cost of service delivery.
Drawing an example of the Bujagali Hydropower Project whose construction costs went up from the projected $580 million (about Shs1.5 trillion) initially to the final cost of $850 million (aboust Shs2.2 trillion), Mr Kasekende noted that delays in procurement is costly to companies that will undertake projects as it ultimately increases the costs involved.
“One of the biggest challenges in this country is procurement you cannot do procurement for a single project for two to three years and you think the cost will not go up,” he said while responding to a question posed by Umeme managing director of ‘how Uganda can lower electricity costs’.
Government has in the past been in the spot light over the long and tedious procurement process that has resulted in project execution delays and cost the tax payer a lot of money.
The fifth annual CEO forum was organised under the theme the role of energy in championing social and economic transformation.
On access to power
Access to electricity is estimated at about 20 per cent in urban areas and less than 4 per cent in rural areas, inhibited by the high tariff among others.
Domestic users for instance pay Shs518 per unit while commercial consumers pay Shs471.8. The tariff for medium industrial consumers is Shs449.4 while that for large scale industrial consumers is Shs307.8.
Private Sector Foundation Uganda board chairman, also Umeme board chairman Patrick Bitature said every investor is concerned about electricity reliability and cost, adding that issues of power stability and cost need to be addressed if Uganda is to industrialise.
SOURCE: Daily Monitor