The Impact Of Umeme Ltd Tariffs On The Performance Of Pan Afric Impex Ltd In Kampala-Uganda

TABLE OF CONTENTS

DECLARATION ...................................................................................................................... i

APPROVAL ............................................................................................................................. 11

DEDICATION ........................................................................................................................ iii

ACKNOWLEDGEMENT ..................................................................................................... iv

TABLE OF CONTENTS ........................................................................................................ v

LIST OF FIGURES .............................................................................................................. viii

LIST OFT ABLES .................................................................................................................. ix

TERMS OF PROFIT .............................................................................................................. ix

LIST OF ABREVIATIONS .................................................................................................... x

ABSTRACT ............................................................................................................................ xi

CHAPTER ONE ...................................................................................................................... I

l.0INTRODUCTION ............................................................................................................. l

! . I BACKGROUND OF THE STUDY. ................................................................................ I

1.2 BACK GROUND OF THE CASE STUDY .................................................................... I

1.3 STATEMENT OF THE PROBLEM ............................................................................... I

1.4 PURPOSE OF THE STUDY. ........................................................................................... 2

1.5 OBJECTIVES OF THE STUDY ..................................................................................... 2

1.6 RESEARCH QUESTION ................................................................................................. 2

1.7 SIGNIFICANCE OF THE STUDY ................................................................................. 2

1.8 CONCEPTUAL FRAME WORK .................................................................................... 3

1.9 SCOPEOFTHESTUDY ................................................................................................ 4

CHAPTER TWO ..................................................................................................................... 5

2.0. REVIEW OF RELATED LITERATURE ...................................................................... 5

2.1 THEREVIEW ................................................................................................................... 5

2.2 PERFORMANCE .............................................................................................................. 5

2.3 PERFORMANCE MEASUREMENTS ........................................................................... 6

2.3. I FINANCIAL MEASUREMENTS OF PERFORMANCE .......................................... 6

2.3.2 ORGANIZATION GOALS MEASUREMENTS OF PERFOMANCE .................... 6

2.3.3 OPERATING BUDGET AS MEASURE OF PERFORMANCE .............................. 6

2.4 TARIFFS ............................................................................................................................ 7

2.1 EFFECT OFT ARIFFS ON CONSUMPTION ............................................................... 7

2.4.2 EFFECT OFT ARIFFS ON INCOME AND EMPLOYMENT ................................. 7

2.5 IMPACT ............................................................................................................................ 7

2.6 ELECTRICITY REGULATORY AUTHORITY (ERA) .............................................. 8

2.6.1 The Electricity (Tariff code) Regulation (2003) .......................................................... 8

2.7 LEGAL framework for setting and Approving Tariffs ................................................... 8

2.8 The Tariff Setting Process ................................................................................................. 8

2. 9 TARIFF OBJECTIVES .................................................................................................... 8

2.10 Tariff Structure ............................................................................................................... 9

2.10.1 THE ELEMENTS OF END USER TARIFF IN UGANDA. .................................... 9

2.10.2 THE NUMBER OF END USER CUSTOMERS ...................................................... 9

2.11 END USER TARIFF DIFFERENTIATIONS (TIME OF USE) ............................... 10

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2.11.1 TABLE SHOWING CONSUMPTION PERIODS ................................................. 11

2. 12 TARIFF DETERMINATION METHODOLOGY ..................................................... 11

2.12.1 GENERATIONTARIFFS ......................................................................................... 11

2.12.2 REVENUE REQUIREMENTS ................................................................................. 11

2.12.3 BULKSUPPLYTARIFFS ........................................................................................ 11

2.12.4 END-USER PRICES ................................................................................................. 12

2.12.5 COMPUTATION OF END-USERPRICES ........................................................... 12

2.12.6 COMPONENTS OF REVENUE REQUIREMENTS OF DISTRIBUTION

COMPANY ............................................................................................................................ 13

2.12.7 CHART SHOWING DETERMINATION OF END-USER TARIFFS IN UMEME

LTD ........................................................................................................................................ 14

2.12.8 ADJUSTMENTS OF END-USER TARIFFS .......................................................... 15

2.12.9 FACTORS INFLUENCING CHANGES INT ARIFF (SENSITIVITY

FACTORS) ............................................................................................................................ 15

2.12 NEW VISION VOLUME23 NO. 164 FRIDAY AUGUST 22, 2008 ....................... 16

CHAPTER THREE ............................................................................................................... 17

3.0 INTRODUCTION ........................................................................................................... 17

3.1 RESEARCH DESIGN .................................................................................................... 17

3 .2 VARIABLES AND VARIABLE MEASUREMENTS ............................................ 17

3 .3 THE STUDY SUBJECT (POPULATION OF STUDY) ............................................. 17

3 .4 INSTRUMENTS OF DAT A COLLECTION ............................................................... 17

3.4.1 QUESTIONNAIRE: ..................................................................................................... 18

3.4.2 THE INTERVIEW ..................................................................................................... 18

3.4.3 DIRECT OBSERVATION: ....................................................................................... 18

3.5 STUDY PROCEDURE: ................................................................................................ 18

3.6 SOURCES OF DATA. .................................................................................................. 19

3.6.1 PRJMARY SOURCES ................................................................................................ 19

3.6.2 SECONDARY DATA SOURCES ............................................................................ 19

3.7 SAMPLING DESIGN ..................................................................................................... 19

3.8 SAMPLE SIZE ............................................................................................................... 19

3.8.1 TABLE SHOWING SAMPLE SELECTION FOR THE STUDY ........................... 20

3.9 LIMITATION OF THE STUDY ................................................................................... 20

3.9.1 DELIMITATION ......................................................................................................... 21

3.10 DATA PROCESSING AND PRESENTATION ........................................................ 21

3.11 DATAANALYSIS ....................................................................................................... 22

CHAPTER FOUR ................................................................................................................ 23

4.0 INTRODUCTION ........................................................................................................... 23

4.1 THE IMP ACT OF UMEME LTD TARIFF ON PERFORMANCE OF PAN AFRIC

IMPEXLTD .......................................................................................................................... 23

4.2 THE RELATIONSHIP BETWEEN UMEME LTD TARIFF AND PERFORMANCE

OF PAN AFRIC IMPEX LTD ............................................................................................. 25

4.3 THE CONSEQUENCES OF UMEME LTD TARIFF ON THE PERFORMANCE

OF PAN AFRIC IMPEC LTD .............................................................................................. 27

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ABSTRACT The study investigated the impact of Umeme Ltd tariff on the performance of Pan Afric

Impex Ltd in Kampala Uganda.

The study was guided by research objectives, among others sought to evaluate methods

used in computing electricity charges and distribution, To determine relationship between

Umeme Ltd tariff and performance of Pan Afric Irnpex Ltd. To examine consequences of

Umeme Ltd tariff and performance of Pan Afric Irnpex Ltd, to identify problem

encountered in collection of Umeme Revenue and to find solutions for the problems

identify the above.

The study was literature review based in which the works of different researchers and

offers were used.

The findings of the study reveal that the performance of Pan Afric Irnpex Ltd declined

following establishment of Umeme Ltd. This was indicated by increased tariff imposed

reduced profits and reduced capacity utilization due to load shedding. It is accordingly be

concluded that establishment of Umeme Ltd increased cost of production and reduced

performance of Pan Afric Impex Ltd.

However in order Umeme Ltd to be successful, more emphasis is needed in areas tariff

policy determination, connect and disconnection procedures, efficient in reducing load shedding and extension of power country wide.