Sunday January 27 2013

Government awards Karuma deal to Chinese firmGovernment awards Karuma deal to Chinese firm


China International Water & Electric Corporation (CWE) has been awarded the deal to construct the multi-billion Karuma Hydropower Dam.

This follows two years of protracted legal battles that witnessed several cancellations, injunctions, investigations and a repeat of the technical evaluation processes.

The bid was opened on Friday at the Ministry of Energy boardroom in Kampala. Available information indicates that CWE offered $1.4 billion (Shs3.4 trillion) for engineering, procurement and construction of the 600MW dam.

Perlite Construction Company Ltd is the other company that had made it to the final stage. The total project cost is estimated at $2.2 billion (Shs5.9 trillion).

Eng. Paul Mubiru, the acting permanent secretary, said the project, rocked by claims of irregularity in the tendering process, is two years behind schedule.

And even the final stage was not without controversy as Sunday Monitor learnt that the Inspectorate of Government (IGG) had directed that the process be halted.

The IGG on Friday wrote to the permanent secretary, citing allegations that some officials in the ministry had been compromised by one of the six bidding firms.

The IGG wrote: “It is therefore hereby ordered that the ministry…do halt any further action in the procurement of a contractor for the Karuma Hydropower Project, including the award of a contract to the best evaluated bidder.”

‘Biased’ evaluation
The IGG spokesperson, Ms Ali Munira, told the Sunday Monitor yesterday that they have “insider information” that the procurement might have been compromised.

According to the IGG, the results of the re-evaluation ordered by court, seems biased and could be contrary to procurement principles.

The IGG said the court intervention had not improved the process because the technical evaluation returned a company that is alleged to have falsified information in its bid.

The IGG’s notice, which the ministry disregarded, is the second halt order—the first having been issued by the High Court months back. The court process was disposed of and the ministry went ahead to evaluate the financial bids before announcing the winner on Friday.

Neither Energy Minister Irene Muloni nor State Minister for Energy Simon D’Ujanga could be reached on phone.
The Karuma dam, whose 600MW is a key factor to the country’s energy security plans, is almost a year behind schedule after intense lobbying by politically-connected factions delayed the bidding process.


About the project

Halting project. The High Court in November stopped the process after some of the bidding companies complained that the team evaluating the bids had been compromised.
Time frame. According to energy experts, Karuma could take up to 10 years to complete.

Other firms. The other companies that had bid are China Gezhouba Group, Salini Constructorri, Sinohydro & CMC Karuma JVC and Vinci Construction Grands, Orascom Industries & Group Five International Consortium.