The New Times (Kigali)
Robert Mukombozi
11 February 2007
Kigali — Due to emergency, there was no tendering involved in the multi-million-euro Methane Gas Project on Lake Kivu, it has emerged. The government announced yesterday that Dane Associates, the company given a nod to prospect the Methane, was contracted on mutual consent. "Dane Associates approached the government in 2002 and expressed interest
for a joint venture in the extraction of Methane Gas in Lake Kivu and the government signed a Memorandum of Understanding with the company on terms of operation and shareholding," Butare said.
"There was no bidding at all," Butare told journalists at the Ministry of Infrastructure Offices in Kacyiru on Saturday.
He said that the government decided to allow the company take on the deal as a last resort, after no parties expressing interest in prospecting.
Even the local companies that had expressed interest in the venture, Butare said, failed to take up the business.
He disclosed that renowned beverage manufacturing giant Bralirwa, and Electrogaz, the national utility provider, entered joint talks to discuss the possibilities of investing in the venture "but finally the duo did not come up with a substantive decision given the complexity of the project."
At the time, Butare said it was imperative for the government to take on a willing company that had expressed interest to join hands with the government.
However, the government says the problem arose when the company refused to transfer the project account from the Royal Bank of Scotland to Kigali, a move said to be a breach of the original terms.
"They (Dane) refused to comply saying they have a right to retain the account as majority shareholders. We could not agree because this was causing a very big problem in terms of transparency," Butare said.
Gov't signatory suspended
Instead of taking heed to the request for a joint account, The Sunday Times has established that the company went ahead and dismissed George Katureebe, the government representative, a senior ministry of finance official, as signatory.
However, the government protested Katureebe's suspension saying the reasons were not convincing, a tug-of-war that has remained unsolved. It was said that the latter was causing delays in the progress by creating bureaucratic procedures.
"The growing lack of transparency in the company and the latest audit report that indicates it's a disclaimer means its time for us to part ways in business with Dane Associates," Butare said, disclosing that the government has halted the $10m (about Frw5.6b) it was planning to offer the company as a non-interest sub loan to facilitate operations of the Methane Gas pilot project.
The development comes at a time when the government has filed a lawsuit against Norway-based firm (Dane Associates).
The Minister of Finance James Musoni, who was on Wednesday responding to numerous questions about the status of investments and commerce in the country told the Senate Standing Committee on Economic Development that the company had failed to honour original terms of the contract.
Musoni told the legislators that the government resorted to the Courts after the firm failed to account for the money that was extended to it for preparatory surveys for the extraction of methane gas.
Asked whether the government has halted the multimillion gas project as a result of the dispute, Butare said: "This is not a gift-giving ceremony and venture of free offers. It is all about money and business and it is progressing."
The government, according to Butare, has tasked Ludan, an Israeli firm to continue working on the five million Euros Gisenyi pilot plant, which after completion will produce five megawatts of power.
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