REA Knee-deep in Debt, asks for a Government bailout
Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on August 3rd, 2016
The committee of Commissions and statutory Authorities met with the Rural Electrification Agency (REA) on queries of the Auditor General for the financial year 2013/14. Hon. Katuntu chaired the meeting while Mr. Godfrey Werikhe, the deputy executive director led the procession from REA
During the meeting, as reported by the Auditor General a total sum of UGX 32 billion is owed to REA by different organisations, however no particular organisation was mentioned to the committee. The chairperson instructed REA to avail the documents so that measures are crafted to regain the money. On the other hand, the agency owes a number of individuals a sum of UGX 8 billion as at 2014, however, the figure has to 18.4 billion over 2 years. The deputy ED also asserted that the figure is even more than that but the 18 billion is the amount that was documented for pay. When why the debt had increased and what to what activity it was related to, officials from REA told the committee that it arose from the cutting of trees and peoples crops to allow the passage of power lines.
The debt was also attributed to inadequate funds available to the agency, from the levies charged and the government subvention. Mr. Werikhe said the loans passed by the committee on National Economy catered for other components but excluded that of compensations. He further warned that unless the issue was comprehensively addressed by the Ministry of Finance and other relevant stake holders, it would spiral out of control. The money was also not earning an interest because when asked, the deputy ED stated if they had failed to pay the principle, how then could they afford to pay interest accrued. The UGX 32 billion owed to REA is enough to offset the debt but the agency has failed to recover the money
MPs expressed their concern about the people who drew their livelihood from the crops destroyed and yet had not been paid, they referred to the situation as unfortunate and unfair. Issues arose also when the committee heard that officials from REA and other unscrupulous people were extorting money from unsuspecting people. This was after MP Nathan Itungo presented a letter bearing a signature resembling that of the Deputy Director asking people to pay to the accounts department the sum of UGX 100 million for power lines. Although Mr. Werikhe denied any knowledge of the letter, he committed together with the committee to investigate the matter further.