15 April 2013

Uganda: China Firm Safe to Bid for Karuma Dam

Kampala, Uganda — China International Water and Electrical Corporation (CWE) can still re-tender for the 600MW Karuma hydro-electric dam project in spite of being caught up in a controversy over allegations of false representation.

Queries have been raised that CWE exaggerated its capacity in a bid to nudge ahead of its rivals to win the $1.2 billion project, which has been delayed by irregularities in the procurement process. There have been suggestions to have CWE blacklisted or scratched off altogether from the whole process.

However the procurement regulator told East African Business Week that CWE cannot be blacklisted before they are given a chance to defend themselves. The office of the Inspector General of Government (IGG) had concluded in a published report that CWE provided false information regarding projects which they claimed to have handled in various countries during the past.

Vincent Mugaba the Public Relations Officer of Public Procurement and Disposal of Public Assets Authority (PPDA) said the PPDA Act spells out tough sanctions against firms offering services to the government based on false information regarding working capability. "The law is very clear on that, but the same Act also provides for breathing space for the aggrieved party to be heard before the action is taken that is why PPDA will not just take actions before the firm has not defended themselves before PPDA" he said, He added that PPDA has not received any complaints from any government agencies concerning CWE so the firm cannot be black-listed

Mugaba said the firm never caused any loss to the government because none of the $600 million earmarked for the project is ring fenced.

When asked if the firm can also re-apply for the tender, Mugaba said since the firm is not yet black- listed then it has the right to re-apply like other firms both locally and internationally.

But some civil society organizations, led by CIssy Kagaba, the Executive Director of Anti- corruption Uganda told the EABW that the decision is wrong, because the CWE provided false information to the government. She insisted that if such bidders are encouraged it sends a wrong message about the government's commitment to fight corruption.

" If the IGG found that the Chinese's company needs a serious penalty from the government, it then contradicts itself with our PPDA regulations. Why again have the same organisation free to apply again? Will this really help us to have a free corrupt state? " she asked There were loud rejections from several quarters when the contract which was originally awarded to CWE. A whistleblower then approached the IGG office and revealed that the firm has no capacity to manage such big project as the Karuma power project.

After the tip-off, the IGG office carried out their own investigation and found that the two dams which CWE claimed to have worked on were much smaller in capacity.

The IGG said that there was a deliberate effort on the part of CWE to conceal this fact and recommended that CWE should be banned from bidding for projects in Uganda. The IGG also criticized the Ministry of Energy staff who participated in the procurement process. Other bidders were Gezhouba Group, Salini Constructorri, Sinohydro, CMC Karuma JVC, Vinci Construction Grands, Orascom Industries and Group Five International Consortium. Salini protested the bidding process, claiming that the evaluation team had been compromised. Court ruled in favors of Salini but despite a court order halting the procurement procress CWE energy ministry officials went ahead and declared CWE as the winner of the contract. However this was later rescinded.Recently President Yoweri Museveni met and discussed the issue with the new Chinese's President Xi Jin ping in Durban South Africa. Museveni managed to get a promise from Jin-ping for funds to help build Karuma dam which is running two years schedule. In the same meeting Museveni asked the Chinese government to find a credible contractor to carry out the Karuma works. Uganda is among many African states where Chinese's construction firms have won construction contracts, especially in the roads sector, construction and water projects Those associated with the president say that the heads of state is unhappy with some ministry officials including the state minister for Energy Engineer Simon D U, Junga who had led team to china that endorsed CWE which was later disqualified by the IGG Lady Justice Irene Mulyagonja.

The controversy on the construction of the Dam has affected the country to have reliable power especially in the Northern parts of the country like west Nile Karuma Dam was supposed to be

Kenneth Otim, the Public Relations Officer for Uganda Electricity Transmission Company told the EABW that the Karuma Dam is vital because not too long in the future electricity supplies will fall behind consumer demand. He said the government has prioritized two big power projects, the proposed Isimba, to generate 100MW and Karuma.

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