Another Shs330 billion road project hit by scam claims

Sunday November 2 2014

The PPDA says CICO submitted a false record of its experience for each of the six projects it listed as having successfully completed.


The PPDA says CICO submitted a false record of its experience for each of the six projects it listed as having successfully completed.


KAMPALA- The construction of the 69km Kigumba-Bulima and 66km Bulima-Kabwoya roads in the oil rich Bunyoro sub-region faces delay following the award of the contract to Chinese firms in disregard of procurement rules.

The roadworks that are part of the oil infrastructure dubbed “Oil Roads” are to cost the taxpayer at least $130m (about Shs338b) as a loan from the African Development Bank (AfDB).

Uganda National Roads Authority’s (UNRA) procurement team recommended that the contract for Kigumba to Bulima road be awarded to M/S Chongqing International Construction Company (CICO) and the Bulima- Kabwoya road project be given to China Railway No.5 Engineering Group Company Ltd.

CICO is also the firm under investigation in relation to its controversial dealings with the dubious Eutaw firm that won the contract to work on the Mukono-Katosi road but sub-contracted the job to CICO under unclear circumstances. The matter is still under police investigations and some suspects have already been arrested.

On the Kigumba-Bulima and Bulima –Kabwoya roads, however, UNRA is blamed for pushing to contract the two firms outside the procurement rules.

According to the PPDA report, a copy of which Sunday Monitor has seen, both CICO and China Railway NO.5 Engineering Group did not meet the qualification criteria.
The PPDA says CICO submitted a false record of its experience for each of the six projects it listed as having successfully completed.

“CICO misrepresented work done on the Fort Portal-Bundibugyo and En Nuhod Umm Kadada roads (in Sudan) since these were not successfully and substantially completed at the time of submission of the application for pre-qualification,” reads the PPDA report dated October 27. It is signed by the PPDA chief Cornelia Sabiti.

The report says CICO’s false declaration contravened the rules set by UNRA in the bidding document.

The PPDA report blames UNRA for being sloppy in implementing its own evaluation criteria, an action that suggests of a move to favour the two firms against other bidders.

Documents show that UNRA declared the Fort Portal –Bundibugyo-Lamia road as completed by March 2013 yet the firm had only handed over 34.7kms to UNRA out of the 103.2kms. UNRA is also held culpable for issuing to CICO certificates of completion for Acholibur-Musingo and Vurra-Arua-Koboko-Oraba roads when the works were still ongoing.

The PPDA blames CICO for usually doubling the cost of road projects after winning the contracts. Attempts by Sunday Monitor to reach CICO were fruitless as the officials contacted said they were not the authorised persons to speak on behalf of the company.

Mr James Okiror, the acting UNRA executive director, said he needed time to give a meaningful response on the matter. “I am still studying the PPDA report and other reports, so I cannot say much now,” he said.


However, UNRA spokesperson Dan Alinange insisted UNRA will proceed to award the contracts to the two Chinese firms despite the PPDA observations. “We are going to award them soon; we submitted a report to AfDB who are the funders. We shall sort a few things and then award the contract,” he said.

He claimed some people were using PPDA to delay the roadworks. He did not elaborate the claims. “We are not going to pay twice for the roads and we know those Chinese firms because they have done other roads before,” Mr Alinange said.
Asked to comment on the PPDA recommendations, Mr Alinange said: “Our people are reading the PPDA report and their issues will be addressed by our technical people.”

However, he reiterated that UNRA would proceed to award the questionable contracts on the basis of the AfDB recommendations which said the contracts can proceed after the two Chinese firms have answered the questions raised against them.

According to the letter from AfDB to UNRA, a copy of which Sunday Monitor has seen, the bank says: “Prior to the contract award, UNRA should obtain confirmation in writing from the recommended lowest evaluated bidder (CICO) on allegations of misrepresentation of facts from the recommended bidder. The bank is proceeding with investigations and should allegations be proven, appropriate action will be taken in line with the provisions of the bidding document.” AfDB gave UNRA a conditional no-objection pending the investigations, to award CICO a contract of Shs116b project for its part of the road.

A conditional no-objection, according to a source in AfDB, means that if the bank finds that CICO misrepresented facts during the pre-qualification process, the contract will be cancelled under the bank’s ethics and integrity guidelines.
The cancellation of the contract after it has been awarded would mean starting the procurement process afresh, which will inevitably delay the roadworks.

Alternatively, the bank can withdraw its funding and the road projects stall.


The PPDA report shows that UNRA’s evaluation committee was not right to award the contracts to the two Chinese firms when they knew the companies had violated the conditions for pre-qualification.

On September 4, 2012 UNRA’s then executive director Peter Ssebanakitta wrote to the Chinese ambassador in Uganda saying: “We have noted many instances where companies belonging to the same group of companies participate in the same procurement or compete for the same project.”

“This practice creates difficulties as it contravenes Regulation 142 (1) and (3) of the Public Procurement and Disposal of Public Assets Act 2003 which forbids bidders of the same ownership being shortlisted for the same assignment.”

“We are raising this issue at this particular point in time because we are planning to roll out an ambitious road programme in the coming two years.

Inevitably, with increased opportunities there will be many such incidences which may lead to loss of business to Chinese companies,” he stated.

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