28 January 2013

Uganda: Karuma Dam Bidding Halted

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 Energy Ministry has halted the bidding process for the multi-billion dollar Karuma hydro power project on the directive of the Inspector General of Government, Justice Irene Mulyagonja.

A series of court injunctions, investigative probes, court cancellations and a repetition of the technical evaluation processes have already led to a 2 year procurement delay for the 600Mw hydro power dam project. Government hopes that construction of the dam will help the country avert deadly power shortages in the next two years.

The last minutes intervention by the IGG has deepened the controversy over this massive project that could cost as much as US$2b by the time it is completed.

Contrary to the media reports over the weekend, the ministry said the process was stopped before the best bidder was selected.

Eng. Paul Mubiru, the acting permanent secretary in the energy ministry, speaking to the New Vision yesterday stated: "The contract has not been awarded to any company."

He said the process was at the stage of the financial evaluation and after the technical evaluation stage, when the IGG intervened and issued a directive for the process to be halted. The ministry thus stopped the process pending the investigations by the IGG of alleged bribery.

There were reports that at the time the process was stopped, only the Chinese company, The China Water and Electric Corporation (CWE), remained in the race. This is what apparently sparked off the speculation that CWE had won the deal.

Amidst this speculation, the IGG on Friday issued letters halting process after a whistle blower accused officials in the ministry of energy of outright fraud.

A series of court injunctions, investigative probes, court cancellations and a repetition of the technical evaluation processes have already led to a 2 year procurement delay for the 600Mw hydro power dam project.

The IGG, Justice Irene Mulyagonja halted the procurement process once more saying she had received information from a whistle blower about alleged corruption, and abuse of authority.

"The Inspectorate is particularly concerned about the allegation that there is no evidence of due diligence carried out on the one and only company that is said to have qualified to submit or to have its financial bid evaluated," she said in statement.

The China Water and Electric Corporation (CWE) had allegedly been favored over Salini, Ghezouba, Orascom, China Hydro, and Perlite for the $1.2b (sh3.2 trillion) dam.

The whistleblower alleged that some government officials had been bribed to favour CWE.

The whistleblower alleges that CWE lied about building a second tier 600mw Yunnan-Daylinjing while the dam is only 70mw also lying about a 640mw Quigshan dam project which is infact a 20Mw dam.

The whistle blower alleged that a sham financial opening was done on 21st January with only CWE making it to the stage in violation of public procurement laws.

Sources at the energy minister had intimated that CWE had offered to construct the Karuma dam at $1.380b, approximately $2m per MW construction cost .

Government has lined up a number of hydro power projects to be implemented in next few years. These include Karuma (600MW), Isimba (188MW), Ayago (600MW).

In last three years, six hydro power dams have been set up; Bujagali (262MW), Bugoye (13MW), Mpanga (18MW), Ishaha (6.5MW), Nyagaki (3MW) and Kabalega (9mw).

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