Uganda: UK Petitions Uganda Over Shs80 Billion Mineral Deal

28 November 2019

The UK has protested the Uganda government's decision to reject a British company and instead award a lucrative project for mineral mapping and exploration in Karamoja Sub-region to a Spanish firm.

The UK Prime Minister's trade envoy to Uganda and Rwanda, Lord Dolar Popat, on November 8 wrote to Uganda's Finance Minister Matia Kasaija and Energy Minister Irene Muloni, asking them to consider the bid submitted by the UK company SRK Exploration Services to undertake mineral mapping and airborne geophysical survey to evaluate Karamoja's mineral wealth.

The Energy ministry, however, awarded the contract to the Spanish company after Cabinet approval. The project is worth Euros 20.6m (about Shs82b) which would be provided by the Corporate International Fund of Spain as part of the agreement for the venture.

"... ... .the alternative proposal from the Spanish government which covers much of the same content of SRK Exploration Services... However, this proposal is more than twice the cost of SRK for the Karamoja work," Lord Popat wrote.

"The UK is committed to helping Uganda develop its mineral industry and I believe SRK ES proposal represents a real opportunity for the country to help the country for the best value available," he added.

The UK Company, SRK Exploration Services, according to the envoy's letter, quoted a comparatively lower cost of $9.6(Shs35b) for the same work.

Lord Popat added: "I would encourage a review of these proposals as I believe that the UK -led proposal from SRK Exploration Services represents far better value to the Ugandan government and would be undertaken by a company with a well-established reputation for these types of projects."

He also indicated that the UK Export Finance, which is financing construction of the Kabaale International Airport in Hoima, had committed to finance SRK Exploration Services's mineral mapping deal.

Mr Kasaija yesterday said he saw the letter on Tuesday and needed more time to make an appropriate analysis.

Karamoja, which represents 20 per cent of the country's land size, is the only region that has not been surveyed because of an instability in 2006 when the national mineral survey was done.

Background

Contention

Last week, Parliament's National Economy Committee, queried the Shs82b deal awarded to the Spanish company on account that it was wrong to award the deal to Xcalibur at 20.6m Euros (about shs82b) when the UK company had offered to do the same work at $9.6m (Shs35b).

However, the director of geological survey and mines, Mr Zachary Baguma, told the committee that SRK quoted a much lower figure because its proposal did not match the ministry's technical specifications.

Funding

Mr Baguma said since 2011, they had been writing to the Ministry of Finance asking for funds to do airborne geophysical survey and geological mapping without success.

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