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Umeme’s operating costs per customer fall by 10 per cent
Mr Stephen Ilungole, Umeme media and public relations manager. File photo
What you need to know:
- Progressive reduction. Umeme has in the last 10 years seen progressive reduction in the money spent on distributing power to every customer.
Kampala. Umeme’s cost of distributing power per customer has decreased by at least 10 per cent attributed to an investment plan that seeks to improve and expand the country’s electricity network.
According to Umeme’s 2018 annual report expected to be presented to shareholders during the annual general meeting next week on Thursday, the drop reflects improved efficiencies in the power distribution chain.
The costs, which are measured as Distribution, Operation and Maintenance Costs (DOMC) divided by the total number of customers, in 2012 stood at $43.3m (Shs108b) compared to $60.4m (Shs225b) in 2018.
The $43.3m (Shs108b) in 2012 was spent on about 513,000 customers compared to $60.4m (Shs225b), spent on 1.3 million customers in 2018, according to the report.
The report indicates that Umeme has been reducing its power distribution costs over time.
In 2013, the power distributor spent $53.5m (Shs138.3b) to service 574,000 customers while in 2014 about $55m (Shs143b) was spent on 651, 000 customers.
About $53m (Shs171.9b) was spent on 794,000 customers in 2015 compared to $50.8m (Shs173.7b) on 951,000 customers in 2016. In 2017, Umeme spent about $55.3m (Shs199.7b) to service 1.2 million customers.
Umeme has in the last 10 years implemented a number of innovations, key among them, prepaid billing that have brought down the cost of the company’s operations.
Currently, the report indicates, about 950,000 of Umeme’s domestic customers, who accounted for 24 per cent of Umeme’s 2017 revenue, are on prepay billing.
The company has also adopted a cashless payment system that allows customers to transact through banks, point of sales and mobile money.
Previously, the company relied on staff deployments across the country to read metres, bill and enforce payment for consumed power, a system that had a number of leakages.
Mr Stephen Ilungole, the Umeme media and public relations manager, yesterday said the power distributor has largely gone cashless to allow customers to make payments through banks, points of sale and mobile money.
“The rationale for going cashless is primarily to minimise risks associated with handling cash, improving customer service and enabling Umeme to respond to business growth,” he said, adding Umeme staff are now focused on improving customer service with cashiers retrained and redeployed within the company to improve efficiency.
