Wednesday September 12 2012

Museveni team spied on Karuma bid team

Karuma falls where a $2 billion, 600-megawatt Karuma hydro electric power plant is expected to be built.

Karuma falls where a $2 billion, 600-megawatt Karuma hydro electric power plant is expected to be built. The tendering process is shrouded with controversy. PHOTO BY DENNIS ODEMA 


Discussions by government evaluators of the Karuma dam construction bids were secretly recorded by spies from the President’s Office during their stay at Chobe Safari Lodge, Daily Monitor investigations have revealed.

According to highly-placed security sources, a group of undercover operatives infiltrated the exclusive chalet in Murchison Falls National Park, and installed listening devices moments before decisions to knock out four of the six bidders for the multi-billion dollar project were made.

The 12 bid evaluators checked into Chobe on February 5, guarded by three police officers from the VIP protection unit. Eng. Henry Bidasala, a Ministry of Energy official, chaired the team’s meetings, according to official documents.

In accounts corroborated by different sources, the secret state agents colluded with the police to eavesdrop the evaluators’ conversations – in the process capturing sharp disagreements over a Chinese firm.

The evaluators had on that Sunday evening in February sauntered into the 5-star lodge, tucked away in nature’s lush nest of the Murchison Falls Park, loaded with lofty ideas to make the big ticket decision on the likely builder of the $2 billion, 600-megawatt Karuma hydro-dam.
In the group of 12 were engineers, finance and procurement officers, a lawyer and one geologist whose job was cut out: Assess the bid documents and select the best two.

In a country where allegations of corruption by bureaucrats have derailed or dogged various infrastructure projects, serving on a team to decide on finalists for a $2b deal was going to always be a delicate duty to the nation fraught with temptation.

Past attempts since 1995 to generate electricity from the gurgling waters of River Nile at Karuma, some 300 kilometres north of Kampala, have staggered either because the prospective investor never had the money or officials involved sullied and stalled the deal by allegedly soliciting kickbacks.
Norwegian power company, Norpak, quit the deal it had in hand when it could not raise the finances required to erect the dam.

Frustrated by donors who had held up financing for the recently completed Bujagali power project over, among other things, environmental concerns, government put up its own Energy Fund.

In July 2011, Uganda invited bids from potential contractors and whereas many firms expressed interest, only nine were prequalified. Six finally submitted bidding documents within the extended January 31, 2012 deadline. These were China Ghezouba Group, Salini Construction, Sino Hydro C.M.C, Orascom Construction, China International Water and Electric Corporation (CWE) and Perlite Construction.

Thus, the Eng. Henry Bidasala-led evaluation group had its work cut out and were being watched.
Unknown to them, the President’s Office infiltrated the venue for their discussions between February 6-12 and, again, between February 18-21 when they returned to Kampala.

Records show that the team from 13th to 17th of February moved out of the Chobe and relocated to Sambiya lodge, also within Murchison Falls Park, because the United Nations Development Programme had booked Chobe prior for its function on those days. But why did the President in the first pick interest in discussions of professionals mandated to appraise the Karuma dam bids?

It transpired that a Ministry of Energy employee had sent a dossier to the Public Procurement and Disposal of Public Assets (PPDA), the authority responsible for overseeing public procurements, alleging conflict of interest and infractions among evaluation committee members.

There was also the yet unproven allegation that up to $2 million (Shs4.5b) had exchanged hands.
President Museveni, who had received similar complaints, wrote to Energy Minister Irene Muloni on March 23, 2012, a month after the evaluation team ended its sojourn in the wild. In the letter referenced PO/22, the President expressed fears that the Ministry of Energy and Mineral Development, through its Contracts Committee and the Evaluation Team for the Karuma Hydro Project Engineering, Procurement and Construction contractor, could have been compromised to pick a firm that had no engineering capacity but would, instead, seek to subcontract the work to other firms after winning the tender “fraudulently”.

Unqualified Ugandans
The unnamed fraudulent company, the President noted, had Ugandans within it with no technical and financial ability to handle such a big project but were simply out to “reap where they had not sown”.

Suspicions were further raised when at the time of evaluation, two city-based businessmen and a senior presidential advisor were sighted in the company of some foreign nationals at Chobe lodge. Investigators were told they were there as fixers to influence the committee to bend its decision in favour of a particular company. To get insider information, our investigations show that the President’s Office deployed agents who planted listening devices.

It is understood the intelligence feedback to the President following an analysis of the recorded conversations, depicting at least four members of the committee fervently arguing in favour of Sino Hydro C.M.C, triggered a high-level investigation supervised by Inspector General of Police, Lt. Gen. Kale Kayihura.

It had been alleged that the evaluators and bidders’ representatives were residing at the same lodge and that money was exchanging hands to influence the evaluation exercise; that some of the evaluators, particularly the engineers, did not have knowledge of the procurement laws and had never evaluated a bid before; and that the designer of the planned Karuma Hydro power plant was also an evaluator and kept defending his “design mistakes” during the appraisal.

Subsequently, the former acting police commissioner for Economic Crimes Fred Enanga, his Anti-Corruption Department counterpart Charles Babweteera and the then in charge of police Data Crime Management David Mwesigwa were tasked to investigate the litany of allegations.

The senior detectives visited both Chobe and Sambiya lodges, retrieved several documents for review, inspected on-site facilities to assess the possibility of interactions between evaluators and other guests, carried out a cellulite site analysis to locate the movements and parties committee members kept contact with during and after the evaluation process and checked bank accounts of the evaluators to detect any unusual transactions.

In statements to police in March and April, the bid evaluation committee members denied taking bribes or involvement in any mischief. They also declined to share with police their information saying such it was privileged and protected by the oath of secrecy that they swore.
In a May 21, 2012 confidential report to CID director Grace Akullo, Commissioner Enanga and his team said they found no evidence that the evaluators received any inducements to twist the results, although many members dodged the meetings and on several occasions left Chobe for trips to Gulu, Karuma and Kampala.

All the trips were authorised by Eng. Bidasala for various reasons, including ill-health. Some members drove to Gulu town to clear electricity bills, another headed north to Karuma ostensibly to pick up a replacement laptop from his son while some returned to the city reportedly to attend to urgent official work.

The city businessmen and senior presidential advisor were at Chobe for unrelated engagements, police said. After a fortnight of brainstorming, the evaluators recommended China International Water and Electric Corporation (CWE) and Perlite Construction as the best two firms to do the dam construction. In part two, we will examine how telephone printouts gave away the evaluators before court blocked opening of the financial bids last Friday.