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Report of the Auditor General on the Financial Statements Of THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED KARUMA INTERCONNECTION PROJECT FEASIBILITY STUDY TH ST FOR PERIOD 5 NOVEMBER, 2009 TO 31 DECEMBER, 2013 OFFICE OF THE AUDITOR GENERAL KAMPALA TABLE OF CONTENTS PAGE LIST OF ACRONYMS ..................................................................................................... 1 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED-KARUMA INTERCONNECTION PROJECT FEASIBILITY STUDY FOR THE PERIOD 5THNOVEMBER, 2009 TO 31STDECEMBER, 2013 ...... 2 DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED-KARUMA INTERCONNECTION PROJECT FEASIBILITY STUDY FOR THE PERIOD 5THNOVEMBER, 2009 TO 31ST DECEMBER, 2013 ............................................................................................................................ 4 1.0. INTRODUCTION ................................................................................................. 4 2.0. BACKGROUND INFORMATION ............................................................................. 4 3.0. THE PROJECT SCOPE .......................................................................................... 5 4.0. AUDIT OBJECTIVES ............................................................................................ 7 5.0. PROCEDURES PERFORMED .................................................................................. 8 6.0. FINDINGS .......................................................................................................... 8 7.0 DETAILED FINDINGS .......................................................................................... 9 i LIST OF ACRONYMS Acronym EA Environmental Analysis RAP Resettlement Action Plan UGX Uganda Shillings TOR Terms of Reference GoU Government of Uganda USD United States Dollars MW Mega Watts 1 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED-KARUMA INTERCONNECTION PROJECT FEASIBILITY STUDY FOR THE PERIOD 5THNOVEMBER, 2009 TO 31STDECEMBER, 2013 THE RT. HON. SPEAKER OF PARLIAMENT I have audited the accompanying financial statements of the Karuma Interconnection Project Feasibility Study for the Period 5th November, 2009 to 31st December, 2013 which comprise of the statement of income and expenditure, statement of accumulated fund for the period then ended, together with other accompanying schedules, notes and accounting policies. Management Responsibility for the Financial Statements Project Management is responsible for the preparation and fair presentation of the Financial Statements in accordance with the Grant Contract, guidelines and procedures and Generally Accepted Accounting Principles. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of Financial Statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility My responsibility as required by Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended) and Sections 13 and 19 of the National Audit Act, 2008 is to audit and express an opinion on these statements based on my audit. I conducted the audit in accordance with the International Standards on Auditing (ISAs). These standards require that I comply with the ethical requirements, plan and perform the audit to obtain reasonable assurance on whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Auditor’s judgment, including the assessment of the risks of material misstatements of financial statements whether due to fraud or error. In making those risk assessments, the Auditor 2 considers internal controls relevant to the entity’s preparation and fair presentation of financial statements in order to design audit procedures that are appropriate for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion. Part ‘‘A’’ of this report sets out my opinion on the financial statements. Part ‘‘B’’ which forms an integral part of this report presents in detail all the significant audit findings made during the audit which have been brought to the attention of management. PART A Audit Opinion In my opinion, the accompanying financial statements give a true and fair view of the state of financial affairs of the project as at 31st December 2013, its Statement of Income and Expenditure for the period 5th November 2009 to 31st December 2013 and Statement of Accumulated Fund as at 31st December 2013 in accordance with the Generally Accepted Accounting Principles. John F.S. Muwanga AUDITOR GENERAL 30th September, 2015 3 PART B DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED-KARUMA INTERCONNECTION PROJECT FEASIBILITY STUDY FOR THE PERIOD 5THNOVEMBER, 2009 TO 31ST DECEMBER, 2013 This section outlines the detailed audit findings, management responses and my recommendations in respect thereof. 1.0. INTRODUCTION Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended), requires me to audit and report on the public accounts of Uganda and all public offices, including the courts, the central and local government administrations, universities and public institutions of a like nature, and any public corporation or other bodies or organisations established by an Act of Parliament. Accordingly, I carried out the audit of the above Project to enable me report to Parliament and Norwegian Ministry of Foreign Affairs. 2.0. BACKGROUND INFORMATION Uganda’s energy sector was liberalized with the enactment of the electricity Act in 1999. The Act allows for the establishment of Independent Power Producers (IPP) and Private Distribution Companies. The government of Uganda encourages all Independent Power Producers to generate power in Uganda. The government of Uganda is in the final stages of packaging the implementation of Karuma Hydropower Project to generate 250 MW as part of its medium to long term power generation development strategy. Uganda Electricity Transmission Company Limited has a Grid Development Plan that is used in assessing development of hydropower sites, developing new transmission lines, up- rating transmission lines and substations. This Grid Development Plan also covers Transmission lines also related to Karuma Hydro Power Project. The lines include Karuma - Kawanda 400kv (approximately 250km), Karuma – Lira 132kv (approximately 80km), Karuma- 4 Olwiyo 132kv (approximately 60km), Olwiyo – Pakwach 33kv (approximately 60km), Olwiyo – Adjumani 33kv (approximately 181km). The proposed lines are an integral part of Karuma Hydro Power Project. These lines will evacuate the generated power at Karuma to major load centers in Kampala City, Lira and West Nile. 3.0. THE PROJECT SCOPE The proposed transmission lines evacuate the generated power at Karuma to major load centers in Kampala and other parts of the country with possible export to countries within the region. The proposed transmission lines will be constructed to the nearest existing network points in Lira 132/33KV substation and the planned Kawanda 400/220/132/33/11 KV substation. Due to the proximity of the Lira substation to the Karuma Hydro Power Station site, power will be evacuated at 132KV and therefore a 132KV transmission line is proposed between Karuma and Lira substations. In order to provide power to the west Nile area a new substation shall be constructed at Olwiyo (60km from Karuma dam site). From Olwiyo two 33KV lines shall be constructed to load centers of Pakwach and Adjumani. A 400KV transmission line is proposed between Karuma and Kawanda substations considering the future generation plans and subsequent evacuation requirements. The areas of Apac,Masindi. Mijera and the surroundings shall be served by a substation at Kibangya that shall have a 400/220/132/33KV transformer in order to minimize loses. The proposed construction of the transmission lines is as follows; Karuma - Kawanda 400kv (approximately 250km) Karuma – Lira 132kv (approximately 80km) Karuma- Olwiyo 132kv (approximately 60km) Olwiyo – Pakwach 33kv (approximately 60km) Olwiyo – Adjumani 33kv (approximately 181km) And all the associated substations Clearing of right of way as necessary 5 Consruction of access roads as necessary Construction of workers camps and storage facilities for the project materials Construction of substations and associated infrastructure 3.1 AIM OF THE EIA/RAP STUDIES The aim of the study was to assess the potential environmental and social impacts (positive and negative) of the proposed construction of the transmission line as described in the above project scope. The study consisted
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