Members of Parliament on the Ad hoc Committee on Bujagali Hydropower Project have discovered what they described as inconsistencies in the ownership and registration of Bujagali Electricity Company Limited.
The legislators established that the company won a multi-billion contract before it was even registered. The committee also found out that the original owners of the projects forfeited their shares when the company was incorporated.
Officials from Bujagali where on Thursday, 04 August 2022 appeared before the Adhoc committee investigating the operations of Bujagali.
The committee seeks to ascertain the Government of Uganda equity contribution on Bujagali, return on investments and the cost benefit and value for money for the income tax exemption overtime among others.
Sheema Municipality Member of Parliament, Dickson Kateshumbwa was left wondering after Josephine Ossiya, the Chief Finance Officer at Bujagali Electricity Limited said that the company was incorporated in August 2005 after they learnt that it was contracted in 2004 by government.
“We want to know; from 2004 up to the time the company was incorporated, how did you respond to the request of the bid proposal before the company was incorporated?” asked Kateshumba.
Ossiya said that when the bid notice was put out, there was a special purpose vehicle that was formed to participate in the bid put out by government.
Alaister McDougall, the General Manager informed the committee that the current team is new and has little information about how the company was formed.
This prompted Otuke County MP, Paul Omara to question how a general manager does not have such information.
The committee was also shocked to learn that when Bujagali Electricity Limited was incorporated, it was formed with two individuals Ebert Isaiah Byenkya and Innocent Kihika each injecting in Shs1 million and the duo later forfeited their shares, after the company was incorporated.
The revelation attracted questions from MPs on how a Shs2 million company came to win a multi-billion tender contract and what government based on to invest US$20 million.
The team from Bujagali failed to explain the controversies prompting the Kateshumbwa who was chairing to adjourn the meeting.
In May 2022, Speaker Among set up the Ad hoc Committee after Parliament rejected the request to extend the five year tax exemption to the company and instead agreed on a one-year exemption so as to allow government to conduct a forensic audit into the earlier 15 years tax exemption.
This followed a proposal by State Minister for Finance, Henry Musasizi, to extend the income tax exemption for Bujagali Hydro Power Project from 01 July 2022 to 30 June 2027.
The proposal was rejected in part with MPs demanding that government undertakes a comprehensive study on the cost benefits of tax exemptions, after realizing that in 2021/2022 tax exemptions cost Uganda Shs7.7 trillion in revenue.