Talks on Shs2 trillion railway contract stall

KAMPALA- Negotiations between government and a Chinese construction company on the controversial termination of the Memorandum of Understanding (MoU) to build Shs2 trillion-railway project have hit a snag after the company protested procedures used in the negotiations.

China Civil Engineering Construction Company (CCECC), through its lawyers, wrote to Attorney General Peter Nyombi, on August 22, 2014, saying “some biased individuals” had been included on the government negotiation team and meetings were being held without agenda. Two meetings have been held and they have not yielded any result.

“Accordingly, our client does not believe that the team provided by government can hold fair negotiations or provide fair advice to government on this matter. This is contrary to the spirit of the order of the court which sanctioned negotiations in good faith,” the letter, signed by Ligomarc Advocates, reads.

Mr Nyombi confirmed receiving the letter and said he had forwarded it to the ministry of Works to address the concerns of CCECC. “I have forwarded it for action,” he added.

The High Court ruled on July 23 against the termination of the MoU by the State Minister for Works, Mr John Byabagambi, and directed government to negotiate and sign a contract with CCECC to construct a 750km standard Gauge Railway from Malaba to Kampala and Tororo-Pakwach-Gulu-Nimule.

Mr Byabagambi terminated the MoU with CCECC and proposed that the deal be awarded to another Chinese company, China Habour and Engineering Company (CHEC), which the minister of Justice, Maj Gen Kahinda Otafiire, said is not qualified to do the project.

According to due diligence done by government on the two companies, CCECC has constructed 8,400km of railway in Africa and China while CHEC has done only 89km in China.

Mr Byabagambi said in March the termination was a result of regional leaders’ decision to migrate from one gauge railway to Standard gauge.

In an August 11, 2011 letter by Works and Transport Minister James Byandala to Finance minister Maria Kiwanuka, the former said CCECC was going to construct a standard gauge railway.

“We have received a project proposal for the construction of a standard gauge railway line by CCECC. The proposal is in line with our government commitment to contributing towards setting up a regional railway network,” she said.

But the project has since been hit by controversies, causing delays while Kenya has already started and the project is ongoing.

The chairman of the government negotiation team, Brig Sabiiti Mutebile, said he would only give a detailed comment after seeing the letter addressed to the Attorney General. He, however, said his team had set August 30 as the deadline for signing the contract.

“We have set a deadline to sign the new deal and all parties (two Chinese companies) have been informed.”

The Director of Civil Litigation, Mr Cheborion Barishaki, a member of the government negotiation team appointed by the President, also refused to comment on the matter, saying it was only Brig Sabiiti authorised to speak on the issue.

When CCECC regional manager, Mr Bai Yang, was contacted on the issue, he refused to comment.

CONTRAVASIES

Genesis: In 2012 Ministry of Works and Transport signed an MoU with CCECC but two months later, Ministry of Defence signed another MoU on the same route with CHEC.
Study: CCECC did a feasibility study on the eastern route but ministry of Works wants to give the route to CHEC.
State Minister for Works John Byabagambi defied legal advice from Attorney General, Solicitor General and High Court ruling.
Negotiations: The High Court directed that the negotiations should be on the contract but government side insists they should be feasibility study done by CCECC, which contravenes the court ruling.

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