Energy ministry on the spot over Karuma project - Daily Monitor

Energy ministry on the spot over Karuma project

Friday September 7 2012



A whistleblower’s tip-off citing suspected irregularities in the process of procuring a contractor for the multibillion shilling Karuma Hydropower project has prompted the country’s procurement body to probe technocrats at the Ministry of Energy.

The development is a new twist in the long-standing row over the selection of a contractor for the 600 megawatt dam, a project that the government admitted will not get off the ground until December despite its inception 17 years ago.

This newspaper can reveal that the Public Procurement and Disposal of Public Assets Authority (PPDA) has slapped a caveat and ordered Permanent Secretary Kabagambe Kaliisa to “address” allegations of irregularities in the procurement process before a green light can be issued to allow the Energy ministry proceed to opening financial bids, a critical stage in the final selection of a contractor.

“The Accounting Officer is requested to address all the technical issues raised,” wrote PPDA Executive Director Cornella Sabiti in a September 5 letter to Mr Kaliisa, “before opening of the financial bids.”

Of six bidders, two companies, China International Water and Electric Corporation (CWE) and Iranian Perlite Industries are understood to have made it past the pre-qualification stage and final cut for selection, a matter that has left other bidders crying foul and petitioning for intervention by PPDA.

“The Accounting Officer is also requested to undertake a due diligence on the firms who passed technical evaluation stage in order to satisfy himself with the capacity of bidders,” Ms Sabiti wrote. “This is to request you to submit your findings to the Authority within 10 working days from the date of receipt of this letter.”

Ms Sabiti also noted that beyond delivery of a hard copy of her letter to Mr Kaliisa, a soft copy had also been posted to him by email for response.

At the centre of the charges against CWE is the belief that it misrepresented facts and questions about its ability to execute works in order to influence an evaluation process, allegations the company has since denied.

The company is accused of presenting varied figures related to output and cost of previous projects it undertook so as to suit conditions set for qualification to bid for Karuma. The Energy ministry also stands accused of secretly inviting the Chinese and Iranian bidders to the stage of opening financial bids without informing other bidders of results of the evaluation process as per public procurement guidelines.

The charges also come on the back of an on-going police investigation opened in April into allegations that officials of a government 12-person bid evaluation committee accepted bribes to allow a bid by a Chinese firm to proceed to the pre-qualification stage.

Ms Sabiti said she had taken the decision following complaints by a whistleblower - an official of the Energy ministry who preferred anonymity, and an application for administrative review from aggrieved bidders Vinci Construction in partnership with Group 5 of South Africa and Egypt’s Orascom filed to her office through lawyers Tumusiime, Kabega and Company advocates.

This newspaper has seen a brief written by the whistleblower who said two bidders had proceeded to the financial evaluation stage “only because of severe bias within the ministry and the process has not been conducted with any objectivity.”
Mr Kaliisa was unavailable for comment yesterday despite repeated calls.