B Y M I C H A E L W . W A M A S E B U 1 3 E K L 8 4 1 9 Effects of restructuring on institutional performance, a case study of the power sector in Uganda CHAPTER ONE The Problem; The study sought to investigate the relationship between institutional restructuring and performance improvement. The power sector in Uganda was used as a case study because between 1999 and 2005, this sector previously dominated by UEB underwent major restructuring. The hypothesis I developed was that “ restructuring of UEB and the power sector have not led to improvement in the performance of the sector in Uganda”. 7/30/2022 2 RESTRUCTURING AND PERFORMANCE OBJECTIVES OF THE STUDY The objectives of the study were derived directly from the GOU Power Sector Restructuring and Privatisation Strategy (PSRPS) developed in 1999. According to this policy document, the objectives were to make the sector; More financially viable enhance power production to meet home and export demand. Have reduced tariffs. Improve quality and reliability of power. Attract private investment and funding. The study sought to establish to what extent the above objectives had been achieved as a result of the restructuring of UEB and by implication, the power sector. 7/30/2022 3 RESTRUCTURING AND PERFORMANCE KEY COMPONENTS OF RESTRUCTURING 7/30/2022 RESTRUCTURING AND PERFORMANCE 4 Enactment of the Electricity Act 1999. Creation of Electricity Regulatory Authority. Unbundling the vertically integrated UEB into three separate companies namely, UEGCL,UETCL and UEDCL. Creation of the Rural Electrification Fund to take charge rural electrification. Concessioning of generation to ESKOM, and distribution to UMEME.(Privatisation). CONCEPTUAL FRAME WORK INDEPENDENT VARIABLE; Status of the power sector prior to restructuring. DEPENDENT VARIABLE; Status of the power sector after restructuring. INTERVENING VARIABLE; WB led restructuring/privatisation process. MODERATING VARIABLES; macro economic factors, political idealogy, weather, attitudes of restructuring personnel, etc. 7/30/2022 RESTRUCTURING AND PERFORMANCE 5 CHAPTER TWO – Literature Review The research entailed a wide review of the existing literature on the subjects of; Restructuring and institutional performance Privatisation and performance The consensus emerging from the review is that; Restructuring and privatisation or out sourcing have become fashionable in both the private and public sector. The justification is usually to promote efficiency, reduce on costs and improve on service quality. Another school of thought is that restructuring can lead to unpleasant and unpredictable consequences if it is not properly managed. According to this school it can lead to loss of jobs, and attract employee resistance. 7/30/2022 6 RESTRUCTURING AND PERFORMANCE Chapter three-Methodology The study employed qualitative and quantitative approaches. The qualitative method entailed use of questionnaires to obtain information from the respondents. The results were obtained simply by comparing numbers of responses to specific questions without statistical procedures. Such results are descriptive and not analytical. The quantitative approach was used to collect and analyse data to to evaluate mathematically related attributes by use of graphs, ratios, percentiles and trends etc. The objective was to compare attributes of sample data and total population. It was used to examine mutually exclusive sets of data attributes, and test whether these sets depend on each other in relationship to the objectives of the research. Such results are analytical. 7/30/2022 7 RESTRUCTURING AND PERFORMANCE Chapter four data presentation and discussion This chapter presents findings of the study. The findings are discussed in light of the study objectives. For each research question results are systematically and graphically presented followed by a discussion and justification of the findings. The findings are compared with other independent and verifiable data available from secondary sources. The results from all the research questions showed that the objectives of restructuring were not attained. 7/30/2022 8 RESTRUCTURING AND PERFORMANCE Chapter five conclusions and recommendations. The process of restructuring of UEB and the power sector was not successful as the problems that afflicted the sector prior to restructuring are still in existence or have worsened, Restructuring on its own in the power sector is not a panacea for power problems. Meaningful restructuring should address the totality of peculiar circumstances and socio economic set up of the country as opposed to one that is donor or externally driven. Restructuring brought on board many private players but this has not translated into the success of the sector. Restructuring has failed to reduce tariffs or improve on the reliability and safety of power. 7/30/2022 9 RESTRUCTURING AND PERFORMANCE Recommendations T he GOU should commission a back stopping study to establish what went wrong with the restructuring and privatisation process in the power sector. The findings should guide a new policy approach to the problems in the sector. The GOU should review concession agreements entered into with UMEME and ESKOM with a view to including periodic reporting arrangements and pegging continuity of the partnerships on satisfactory performance. New entrants in the power sector should be vetted via due diligence assessments prior to entry in the sector. Upon being licenced, they should execute performance bonds with Gou. Licences granted to prospective investors in the sector not utilised should be recalled and cancelled to give room to only investors with demonstrated capacity to invest or perform. 7/30/2022 10 RESTRUCTURING AND PERFORMANCE