Public Private Partnerships and Competitiveness of the Hydroelectricity Sub-Sector in Uganda : case of Bujagali and Karuma Dam Projects

Abstract

Globally,Public Private Partnerships (PPPs) have been adopted as a tool to improve public service delivery. In the hydropower subsector, PPPs have been adopted to improve competitiveness of the hydropower sector. Existing literature acknowledges that PPPs have been widely welcomed in Uganda and other parts of the world with the hope that they would support electricity improvements in aspects such as effeciency, effectiveness, availability, access and affordability across the energy sector. In the hydropower sub-sector, a range of PPPs models have been adopted in generation, transmission, and distribution. However, there is growing harsh judgment and dissent for PPPs in the sector. Based on interviews, focus group discussion,review of scholary literature and documents review,this study concludes that PPPs can improve competiveness of the hydropower sub-sector under certain conditions.The study acknowledges existing PPP models that have enabled the country to improve availability, access,reliability, quality of power and reduced cost of government in extending electricity to its people. However, the study reveals that tarriffs remain a key challenge and design risk. Based overall findings, the study recommends an extension of the Build Own Operate and Transfer (BOOT) to Design Build Own Operate Transfer (DBOOT) that can be adopted alonsgide some other interventions to improve competitiveness of the hydro electricity sub sector. This model may help to reduce design risk for contracting parties and utimately provide affordable tarriffs in the long term.The study also acknowledges that while the agency theory has been adopted for studies in theory and practice of procurement alongside PPPs, but remains adquate to resolve challenges existent in the practice of PPPs in the hydropower sector.To this effect, the study proposes a new model, the Citizen Principal Agency (CPA) that puts the citizens at the heart of design and implementation of PPPs that aim at improving competitiveness of the electricity in not only Uganda but across the world. The findings of this study are relevant to Uganda and other countries since electricity is considered to be a key catalyst in improving economies of countries but more importantly lives of people at the bottom of the pyramid.