Kampala — The construction of Makerere University Business School (MUBS) and Library has again hit a snag after the contractor, Seyani Brothers, pulled out of the deal.

Principal Waswa Balunywa said the contractor pulled out due to changes in the cost of construction materials, mostly cement and steel.

Four years ago, MUBS planned to construct a library and lecture halls. Seyani Brothers won the bid to carry out the work at sh16b. The halls were expected to cost sh5.5b and the library sh10.4b.

However, in August 2008, the Public Procurement and Disposal of Public Assets Authority (PPDA) launched an investigation into the procurement process, citing complaints from one of the unsuccessful bidders, Babcon Uganda.

A report by the Auditor General to the public accounts committee indicated that although a review was carried out by PPDA, its recommendation that the bids be re-evaluated had not been implemented, causing a delay in the implementation of the project.

Balunywa explained that a review was done and Seyani Brothers again emerged the best bidder.

"PPDA gave a go-ahead to award the contract. They were notified as per procedures, but before the contract could be awarded, Seyani Brothers indicated that it could not take on the contract because of changes in costs of construction materials," Balunywa said in a statement.

He said the university management consulted with PPDA and was advised to repeat the biding process.

"We expect this to take another six months before construction starts. Adverts inviting for bids have been placed in the press," he said.

Balunywa, however, was thrown out of the committee over contradictory statements.

The committee, chaired by Rebecca Atengu, asked Balunywa to explain why he failed to remit PAYE amounting to sh188m to the Uganda Revenue Authority (URA) on time.

The university as a result incurred a fine of sh38m. The Auditor General's report said the deductions had not been made appropriately and remitted to URA.

The report added that individual cheques for extra duty and responsibility allowances were being paid separately from the payroll.

"This is a lot of money the university incurred. Your action denied our people services," Okello Oduman (FDC) said.