WENRECO, the firm licensed to generate and distribute electricity in the region, charges between sh1.5m and sh2m for an electric pole, threatening the Government's programme of rural electrification. The national power distributor, UMEME, charges about sh350,000 for a treated pole.
Frank Sebbowa, the ERA chief executive officer, confirmed over the weekend: "We have heard of that and instituted investigations on the matter."
He, however, added that preliminary results indicated that the charges "were reflecting true costs incurred by WENRECO."
"WENRECO is charging what it costs them to transport the poles, electricity wires, labour involved and the metal cross bars on the poles," he noted.
"But we have asked them to subsidise the costs for the consumers so that they are not prohibitive for new connections."
Sebbowa argued that WENRECO could absorb some of the connectivity costs or allow consumers pay for a longer period of time.
"But we are meeting next month (April) to resolve these issues," Sebbowa said.
The West Nile region comprises Arua, Nebbi, Packwach, Adjumani and Koboko districts, which are not connected to the national grid.
However, Kevin Kariuki, the IPS head of infrastructure, explained over the weekend that the cost of the last batch of poles procured from a supplier in August 2004 to Arua was $121 (about sh205,700) and $151 (about sh256,700) per 30ft (medium) and 35ft (stout) poles.
The quotations, he added, included insurance and freight.
Kariuki said two different quotations received last week for the two types of poles to Arua were $169 (about sh287,300) and $199 (about sh338,300), $222 (about sh377,400) and $272 (about sh462,400).
He explained that in accordance with industry practice, the cost of connecting a new customer was simply the ex-Arua cost of the pole plus a small component for transportation.
However, the Uganda Electricity Distribution Company (UEDCL) charges between $175 (about sh297,500) and $250 (about sh425,000) for the same poles at its Lugogo pole treatment yard.
On absorbing the costs, Kariuki said, under the principle of cost reflectivity (tariffs reflect the true cost of supply) this was not possible unless a mechanism for including part of the cost in the tariff was established.
"We are in discussions with ERA on this. We are also developing on a pilot basis, a scheme for a number of customers whereby we provide the connection at a lower price, but recoup the full cost over a period of time," he explained.
"The challenge is how to capture the cost of financing the connections upfront, as we have to purchase the poles, transformers and cables in advance."
WENRECO is a subsidiary of the Aga Khan's Industrial Promotion Services (IPS) based in Kenya.
The firm is also operating and maintaining heavy-fuel generators supplying power to Arua and Nebi. WENRECO is also funding the construction of a $8.6m 3.5 megawatt mini-hydropower plant in River Nyagak. But this particular project is behind schedule because the power was expected mid-December.
IPS is also behind the multibillion Bujagali hydro power project in Jinja.
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