22 January 2013

Uganda: Karuma Power Dam Technical Bids Completed

The Inspector General has halted the Karuma Dam Project over Bribery and Corruption allegations. ( Resource: Uganda's Karuma Dam Bidding Stopped Over Alleged Graft )

The technical re-evaluation process for the bids interested in the construction of the proposed 600 megawatt (MW) Karuma hydropower project has been completed. The procurement process now enters the financial evaluation stage, after which the best evaluated firm will be invited for negotiations, acceptance and signing of the contract before construction works starts.

"A team of highly competent experts has completed the technical-evaluation process and we are moving on the next procurement stage," Paul Mubiru, the acting permanent secretary in the energy ministry said on Monday. "Their report is with us. But we don't want to disclose the details as per the law."

According to the PPDA Act 2003, a procurement and disposal entity (in this case the energy ministry) shall not, except when required to do so by an order of court, disclose any information. Such disclosure could amount to a breach of the law, impede law enforcement, prejudice legitimate commercial interest of the parties, inhibit fair competition or in any way not be in public interest until the successful bidder is notified.

The decision to re-evaluate the technical bids follows the High Court (commercial division) ordering the energy ministry to re-evaluate the technical bids for the tender to build the $1.2b dam.

The court also ordered for a new evaluation committee to be constituted for the new process. This was after a newly-formed Italian firm, Salini spa, petitioned the High Court to stop the procurement process, claiming there was "irregularities" and subsequently secured, an order halting the tendering process.

Last year, the energy minister assured the nation that "nothing is going to stop us from selecting the best and competent bidder as long as we are following the law." "This (Karuma) project is very important for meeting the country's energy needs and we cannot afford any delays."

Statistics from the Electricity Regulatory Authority indicate that peak demand for power is growing by 10% every year, and there is need to commission at least 50MW every year if Uganda is to avoid load-shedding.

Already, electricity demand has increased sharply, following the commissioning of the 250MW Bujagali hydropower project, a signal that policy makers should be bringing new projects online to prevent a reversion to load-shedding.

The increased demand is due to intensified investment in industries that heavily rely on electricity and heightened economic activities.

The National Development Plan (NDP) identifies limited generation capacity and corresponding limited transmission and distribution network as key constraints to the performance of the energy sector.

The NDP further cites increasing power generation capacity as the first objective to address this problem and construction of larger hydropower plants as the first intervention strategy.

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