Byabagambi is said to have fronted Ferdsult Engineering Services -a private electricity distribution service provider to Rural Electrification Agency (REA) for the deal to distribute power in parts of Western Uganda.
The company, in which Engineer Byabagambi is a board Chairperson, has allegedly defaulted payments to Rural Electrification Agency for nine years.
Information about the alleged debt emerged during a meeting of Parliament's Committee on Commissions, Statutory Authorities and State Enterprises on Tuesday. The Committee Chaired by Bugweri County MP Abdu Katuntu was considering the June 2015 Auditor General's report on Rural Electrification Agency.
The Committee learnt that the Company is run by close family members with strong links to government. Shareholders and Directors of Ferdsult include Owen Mulangira, Engineer John Byabagambi who doubles as its Board Chairperson, Norbert Semilata, Enid Mbabazi, Mary Natukunda and Ferdinand Mugisha.
Enid Mugisha told the committee that she owns 25 percent shares in Fardsult. She is employed at Prime Minister's Office. She is married to Ferdinand Mugisha, the Executive Director of the same company. Ferdinand Mugisha formerly worked with Uganda Electricity Board. The other shareholder, Mary Natukunda is a sister to Ferdinand Mugisha.
MPS also discovered l that Ferdsult also owes 5.2 billion Shillings to Uganda Electrification Transmission Company Limited.
Bonny Kizza, the Finance Director of Ferdsult confirmed to the committee that the company has been involved in power distribution and sale of electricity on behalf of Rural Electrification Agency since 2007 in Western Uganda.
He said that this business emanated from a ten year contract in which the Rural Electrification Agency on behalf of the Ministry of Energy. He however attributed their failure to pay to the low income saying the the companies earnings is not enough to cover operational expenses.
Godfrey Werikhe says his agency has been sending Ferdsult invoices of 30 million Shillings each month for payments but the money has not been paid. He said Rural Electrification Agency only received 60 million Shillings from the contractor since it started business.
Bugweri County MP Abdu Katuntu tasked Rural Electrification Agency to explain whether it conducted due diligence before it entered a contract with Ferdsult.
Katuntu directed Ferdsult to sign a cheque to Rural Electrification Agency immediately but Kizza declined saying the company was soon winding up because it had financial challenges.
Budadiri West MP, Nandala Mafabi questioned why Rural Electrification Agency would continue to work with a contractor for 9 years without receiving payments as stipulated in the contract.
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