Government secretly awards Karuma power deal
President Museveni, Energy Minister Irene Muloni, Attorney General Peter Nyombi and Mr Kabagambe-Kaliisa, the permanent secretary of the energy ministry.
What you need to know:
Attorney General reported to be preparing necessary instruments for Chinese firm to undertake construction of 600MW hydro power dam even as bidding process proceeds.
KAMPALA
President Museveni is said to have agreed to a secret deal for China International Water and Electric Corporation (CWE) to construct the 600 megawatts Karuma hydro-dam, bypassing an ongoing government procurement process.
Investigations by this newspaper show that the secret arrangement was reportedly reached during a meeting between the President, top Ministry of Energy officials and the Chinese company’s representatives at State Lodge, Nakasero, almost six weeks ago, on August 14.
Mr Museveni reportedly chaired the meeting, sources familiar with the process told Daily Monitor on condition that they are not named due to the sensitivity of the matter.
Reported in attendance was CWE President Wang Yu, the company’s General Manager, Mr Daniel Wang, and his colleague in-charge of International Business, Hang Shouguo as well as Mr Lin ChuXue, the Vice President of China Three Gorges Corporation, CWE’s parent company.
The government side was represented by Attorney General Peter Nyombi, who is also chief government legal adviser, Energy minister Irene Muloni, her junior Simon Giu D’Ujanga and Permanent Secretary Kaliisa Kabagambe.
The ministers have separately confirmed that the Nakasero State Lodge meeting took place but would not say what went on behind closed doors. Three days after the Nakasero meeting, the Attorney General wrote to Mr Wang, noting that he had been “directed” by President Museveni to prepare the necessary legal instruments to effect what was agreed during the August 14 meeting, but he required additional information.
His letter asked for documentation regarding registration and relationship between CWE and China Three Gorges Corporation; a copy of technical designs of the dam to be constructed and any “terms and conditions” that CWE wanted included in the legal instruments.
The Nakasero meeting, according to Mr Nyombi, decided that China Three Gorges Corporation would, as the parent company, guarantee the “performance of China International Water and Electric Corporation in the construction of Karuma Hydro-power station”.
He wrote: “I was directed by H.E. The President to prepare the necessary legal instruments between the government of Uganda, China Three Gorges Corporation and China International Water and Electric Corporation.”
The process to source a contractor for the $2b (Shs5 trillion) began almost two years ago, and it had been planned that the selected winner would have been on site by the end of March, this year.
However, the procurement stalled following multiple investigations assigned by the President Office into allegations – unproven to date - by an Energy ministry official that some bid evaluators took bribes to influence the process in favour of a certain firm.
Court injunction
The High Court last Friday lifted an injunction it had placed on the search for a contractor, which had been sought by Kabega & Co. a law firm, representing Italian firm Salini Spa, one of the bidders. Hearing of the substantive case is fixed for October 5.
It is understood that President Museveni has been separately meeting officials of Salini Spa and other companies during the period the bidding process was paused, but details of their discussions remain under wraps. But Energy Minister Irene Muloni yesterday said: “No company has been awarded the [Karuma dam] contract. The procurement process is still on…”
Mr Nyombi had told this newspaper that he was “not aware of the President’s directive” to let the Chinese build the dam on River Nile at Karuma, even when acknowledging that he authored a letter to CWE boss Wang, suggesting so.
Without giving specifics, he said he had since revoked the letter but would not share a copy or contents of his second letter withdrawing his mid-August letter because he took an oath to keep government secrets.
Presidential Spokesman Tamale Mirundi said he was not in the know of discussions about Karuma project, observing that “the President prefers to keep confidential matters to himself”. “If it’s true he gave the directive, it must be because of his commitment that Ugandans should have enough power within 36 months. Energy to the economy is like blood to the body. So, the President does not want to hear of any delays on energy projects,”
