Thursday, 18 September 2014

Steel manufacturer says power surges caused Shs3b losses- Uganda

Steel manufacturer, Roofings Group, has said it has lost equipment worth of $1.2 million (Shs3.1 billion) over the last 10 months due to power surges.
The Group technical director, Mr Sheikh Arif, said he believes the surges were caused by lightning strikes to electrical sub-stations, which distribute power to businesses and homes, as well as old equipment at the sub stations.
Another likely cause of the unstable power, according to the manufacturer, may be the erratic use of electricity, such as turning large motors on and off abruptly by neighbouring factories in the Namanve Industrial Area, he said.
“It is not power cuts, it is the power spikes,” Mr Arif said, clarifying the alleged source of his company’s losses to reporters and parliamentarians at the Namanve factory on Wednesday.
“If power goes off, the production line stops. The material we would have been producing [when the surge happens] goes to waste,” Mr Arif explained, adding that the surges occur almost on a daily basis.
Umeme head of communications Henry Rugamba, who confirmed his company is aware of the electricity issues Roofings Group faces, said: “I know the frustration of businesses and domestic customers,” adding that Umeme has responded to “any issues (they) report, but it is all infrastructure issues,” he said.
He added that improvements to electricity lines running to other industrial areas, like the Kampala-Mukono line, have been made in the last year.
“That has ensured better power to companies with more manageable electricity demands than the Roofings Group,” he said.
Still, the negative effects of unstable electricity on the productivity of businesses are widely recognized, including in a 2013 report by the World Bank. The bank’s ‘World Doing Business Report’ also notes that unreliable power can prevent companies from receiving a full return on the investments made, into machinery and properties, for example, by restricting productive capacity.
“To mitigate the problem of unstable electricity, you require an upgrade of the [power] line and the sub-stations because the sub-stations are quite old,” Mr Arif said, suggesting sub-stations belonging to electricity companies should be upgraded to stabilize power. “Once you have the
upgrade, the losses could be reduced.”

Source: Daily Monitor Uganda (

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