MPs querry officials over Isimba, Karuma funds

Parliament.

Lawmakers on Parliament’s Public Accounts Committee on Tuesday questioned ministry of Energy officials over risking more than Shs7 trillion worth of taxpayers’ money in the alleged shoddy works.

The MPs were discussing shoddy works at Isimba and Karuma hydropower projects.

The committee heard from ministry officials that the two Chinese contractors- China International Water & Electric Corporations and M/s Sinohydro Corporation Limited took the deals without an open bidding process.

Explaining what happened, Ms Prisca Bonabantu, the undersecretary at the Ministry of Energy and Mineral Development, said there was a Cabinet directive to expedite the projects, adding that “the initial bidding process was interfered with by administrative reviews and there was a cabinet directive on the matter,” Ms Bonabantu said.

The committee chairperson, Ms Angeline Osege, however, faulted ministry officials for allowing cabinet to interfere with the procurement process. The committee heard that the decision to give the deal to the two Chinese firms came from Cabinet. By press time it was not yet clear whether the committee leadership will summon energy minister Irene Muloni and her colleagues to explain what happened.

In 2013, Sinohydro Corporation Limited was awarded the tender for the construction and production of 600MW at Karuma and another company, China International Water and Electric Corporation was awarded the Isimba Power project to produce 183MW.

Both tenders were valued at Shs7.1 trillion with 85 percent funding from the EXIM Bank of China- Shs5.7 trillion and Shs1.4 trillion for Karuma and Isimba respectively.

According to 2014/15 Auditor General’s report, there was no tendering undertaken for both firms, implying that the ministry handpicked the two firms. However, sources told Daily Monitor that the two firms were handpicked on the orders of President Museveni.

The bidding process according to AG would be used by government to evaluate the technical abilities of various bidders to identify the most capable firms to undertake the works, adding that “there is no evidence that this firm had the technical capacity to construct the dam.”

Since there was no bidding, the Auditor General contends that the contract price of Shs5.7 trillion had no basis since there was no evidence on how the amount was arrived at.

The Auditor general also noted that there was a heavy risk since “the project costs for Isimba Hydropower project could be exaggerated.”

The committee also raised concerns on how a company whose history had not been verified would be trusted with carrying on with a vital project involving hefty sums of money.