Thursday November 22 2012

Court orders re-evaluation of Karuma dam project bids



The High Court in Kampala has ordered the Ministry of Energy and Mineral Development to re-evaluate bids for procurement and construction of the $2.2 billion (about Shs5.3 trillion) Karuma hydro power project.

Judge Eldad Mwangusya issued the orders on Friday last week after a successful application for judicial review by one of the bidders, Salini SpA, which cited flouting of the Public Procurement and Disposal of Public Assets (PPDA) rules.

The firm claimed it was unfairly dropped from bidding as the ministry favoured two firms; International Water Electric Corporation (of China) and Perlite Construction Corporation (of Iran). “…I have already observed that for this project to be salvaged, this [re-evaluate bids] is what the ministry has to do,” said Justice Mwangusya.

The judge further ordered the ministry to appoint an independent evaluation committee for the new tender. He advised: “The best this court can do is to advise that ...the executive director of the PPDA should be involved in the bidding process to ensure that the PPDA Act is not flouted again.”

The judge advised the ministry to engage third party procurement services of a reputable international consulting firm under Section 40 of the PPDA Act to re-evaluate the bids to ensure fairness.

In his affidavit, the Managing Director of Salin S.p.A, Mr Melvyn England, said the Energy ministry on September 1, 2010, invited applications for bids for the project and that they took part.

On January 23, 2012, he wrote to the ministry informing them that Salini Group of companies was undergoing internal restructuring and that the bidding for Karuma was to be overseen by Salini S.p.A. About a week later, Salini SpA along with five other firms, submitted their bids.

Mr Melvyn alleged that when the committee members moved to Chobe Safari Lodge, Murchison Falls National Park, to carry out the evaluation, some of the bidders, except Salini S.p.A, allegedly compromised them. He claimed the ministry and the PPDA refused to address the complaints raised by his firm over the anomalies.

Mr Melvyn added that he was told about how the ministry invited two of the six biders - China International Water and Electric Corporation and Perlite Construction Company – to open their financial bids on September 7, 2012.

However, the bidding did not take place after they presented an interim court order stopping the process. But Mr George Kalemera, a lawyer from the Attorney- General’s chambers, argued that the Energy ministry was dealing with a totally different company, Salini Construtori SPA, but not Salini SpA.

But Mr Enos Tumusiime, the lawyer who represented Salini SpA, argued that before the bids were opened, Salini Construtori SPA informed the energy ministry about the internal restructuring that would see Salini SpA, handling the Karuma bidding process.