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State House withdraws E.O on Dott Services Limited

State House has withdrawn the Executive Order earlier slapped on Dott Services Ltd & General Nile Company, we can confirm. President Yoweri Museveni, last month, barred government agencies from entering into any new contract with the local construction company Dott Services Limited.

Museveni, issued the Executive Order in a letter dated April 21 to all Permanent Secretaries, the procurement regulations entity Public Procurement and Disposal of Public Assets Authority (PPDA), the Ministry of Finance, and UNRA, according to the then social media reports.

Government spokesman, Ofwono Opondo confirmed to this newspaper last night that the president had rescinded the decision after wider consultations. “I consulted the attorney general and he confirmed to me that the president had written to him withdrawing the Executive Order,” Ofwono said. Opondo said the president can ‘rescind his decision depending on the new information and advice.’ When pressed further on the kind of the advice the president received on Dott Services Ltd, Ofwono said the attorney general was privy with the details.

According to a highly placed senior State House official State House, Museveni recalled the Executive Order after receiving unbiased facts and new details on the activities of Dott Services. When contacted for a comment, the Chief Executive Officer (C.E.O), Dott Services, Mr. Venugopal Rao said the company had not been served with the order. “We also saw it on the social media and we believe the government doesn’t operate through the social media. That’s all we know about it,” Venugopal Rao said on phone yesterday. Venugopal also dismissed this week’s media reports that Dott Services was joining electricity generation as new entrants.

According to Mr. Rao, Dott Services Ltd has been in power generation since 2010, with Kabalega Hydro Power Project as their first venture. The company is currently working on other two power projects; Waki and Nyagak 111. “We have been in electricity generation for many years. We completed Buseruka (9 Megawatts) in January 2013 and we are in the advanced stages of completing Waki in Bulisa district in June 2018,” Rao said. He said Buseruka was financed by African Development Bank and Preferential Trade Area (PTA) Bank to a tune of $38M (Shs120bn) and commissioned by President Yoweri Museveni in 2013 January. “Waki Hydro Project will cost $18.5 (Roughly Shs70bn) and is being financed by PTA Bank,” Rao said. Dott Services Ltd is also one of the three companies that formed Genmax Nyagak Ltd, a Special Purpose Vehicle, which will execute the 6.6 Meggawatts Nyangak 111 Hydropower Project.

The others are HydroMax and the Uganda Electricity Generation Company Limited. “Kreditanstalt fur Wielderaufbau (KfW) offered to the project a grant of Euros 7m (roughly Shs27bn) and Dott Services is contributing $8.5m on the project (roughly Shs30bn) through Uganda Development Bank (UBD) financing is now on hold,” Rao added. International Finance Corporation (IFC), an arm of World Bank is the transaction advisor. The power generation license was issued in April 2016 and a go ahead for the financing was issued in March 2017. “On completion, Nyagak111 will offer the lowest tariff in the country at 5.75 cents per/unit,” he said.

Nyagak111 Construction started last year. However, banks have put on hold further funding because of the Executive Order. Bujagali is currently offering a unit at 11.52 cents per/unit and is set to rise to 15 cents per/unit next year. Since his re-lection in February 2016, President Yoweri Museveni has been pushing for the reduction of electricity tariffs in the country. In a directive issued July 2016 and tilted ‘STRATEGIC GUIDELINES AND DIRECTIVES FOR THE TERM: 2016 – 2021 AT THE INAUGURAL CABINET MEETING’, Museveni directed cabinet to ensure power tariffs are lowered. “Work with the proprietors of Bujagali to lower the costs of electricity produced by that station. It may involve tax exemption and whatever other measures that are needed that must bring down the cost of that electricity to may be around 6 American cents per unit from the present 11 American cents per unit,” Museveni directed. “Then a subsidy must be put in place to reduce the cost of electricity to the manufacturer to 5 American cents. These measures must be concluded in the next six months i.e. by February 2017. Lower electricity costs will attract more investors and make our industries more competitive.” Since, cabinet and ministry of energy officials have been in protracted meetings on how to reduce power tariffs but nothing is forthcoming more than a year after.

M/s Dott Services Limited, is an Engineering and Contracting Company registered and incorporated Uganda in October 1994 and it’s a leading local services provider in the construction industry in the East African region (Uganda, Tanzania and South Sudan).

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