By Spy Uganda
Uganda’s electricity transmission sector is facing a potentially costly legal challenge, with the Uganda Electricity Transmission Company Limited (UETCL) entangled in 136 court cases carrying a combined contingent liability of Shs777 billion.
The scale of the litigation has raised questions about the company’s handling of land acquisition, compensation, procurement and contracts, amid concerns that unresolved disputes could eventually put additional pressure on public finances and affect the implementation of critical electricity infrastructure projects.
The exposure was highlighted on Thursday, September 3, 2026, as UETCL officials responded to queries arising from the Auditor General’s report for the financial year 2024/2025.
A significant portion of the liability is linked to disputes surrounding major electricity projects and contractual obligations. About Shs22 billion remains outstanding in compensation to people affected by UETCL projects, while a further Shs30 billion is owed in connection with a substation in Tororo District.
However, the largest single exposure comes from a legal dispute involving Umeme Limited, with more than Shs500 billion of the contingent liability tied to a case currently before a court in London.
The figures have brought renewed attention to how UETCL manages projects from land acquisition and compensation to procurement and contract administration, particularly as the company continues to oversee major investments intended to strengthen Uganda’s electricity transmission network.
UETCL Company Secretary Stella Ladona said some of the legal disputes arise after project-affected persons reject compensation offers based on valuations conducted in accordance with guidelines issued by the Chief Government Valuer.
The company has also been dealing with compensation challenges linked to the construction of the 400kV Karuma–Tororo transmission line, one of the key projects aimed at improving the movement of electricity across the country.
UETCL Chief Executive Officer Eng. Richard Matsiko said the company had secured sufficient funding to compensate approximately 8,000 project-affected persons along the transmission line.
Matsiko said field officers were undertaking valuation and assessment exercises, with people who accept the compensation offers expected to receive their payments within six months.
The development is significant because prolonged compensation disputes can delay access to project land, increase project costs and expose infrastructure agencies to litigation.
Beyond compensation, questions have also emerged over UETCL’s procurement and contract management systems.
The scrutiny followed concerns that the company’s contracts committee had not been meeting regularly because some members were unavailable, including an official who was away on study leave.
COSASE Chairperson Hon. Muwada Nkunyingi questioned how contracts were being approved under such circumstances and whether procurement decisions could potentially be concentrated in the hands of a few individuals.
“We asked who was giving out the contracts and whether one person sat and decided who should be awarded a contract,” Nkunyingi said.
The committee also raised concerns over findings from the Auditor General’s review of selected UETCL contracts, which pointed to possible collusion between some employees and contractors through the alleged leakage of confidential procurement information.
Such allegations, if established, could raise the cost of public projects while undermining confidence in the procurement of critical electricity infrastructure.
Another issue attracting attention is the inclusion of clauses in some UETCL contracts requiring disputes to be resolved outside Uganda.
Nkunyingi said the agreements would be scrutinised to establish how such provisions were approved and whether they expose the public utility to unnecessary legal and financial risks.
The concern is particularly relevant given that the company’s biggest current litigation exposure more than Shs500 billion—is connected to a case being handled in London.
Budadiri East County MP Julius Nakiyi also questioned whether UETCL’s legal department had provided adequate advice to management before decisions were made that later resulted in costly disputes.
The Shs777 billion contingent liability does not necessarily mean that UETCL will ultimately pay the entire amount, as the figure represents potential financial obligations arising from ongoing cases.
However, the size of the exposure highlights the financial risks associated with prolonged disputes at a company responsible for a critical part of Uganda’s electricity infrastructure.
UETCL will therefore face growing pressure to strengthen its project management, land acquisition, compensation, procurement and contract administration systems to prevent avoidable disputes from escalating into expensive litigation.
With Uganda investing heavily in expanding and modernising its electricity transmission network, effective management of these risks will be crucial in ensuring that funds allocated to infrastructure development translate into completed projects rather than prolonged legal battles.
