Government holding Shs102b for Isimba - contractor

Thursday February 13 2020

Project. The pillars that are being constructed

Project. The pillars that are being constructed to hold the Isimba Bridge. PHOTO BY FRED MUZAALE 


China (International) Water and Electric Engineering (CWE) has revealed that there is a financial crisis that may affect the completion of the Isimba Dam bridge that connects Kayunga and Kamuli districts across River Nile.
Mr Xia Nenghai, the CWE project manager, yesterday told the Parliamentary Committee on Physical Infrastructure that much as the Chinese government firm accepted to construct the bridge downstream at no cost, government has held payment of $28m (about Shs102b) despite the completion of the hydropower dam.

The contractor pledged not to abandon work after that payment despite other claims of retention fees and security totaling to $53m (about Shs194b).
The Isimba dam access bridge is part of the $567m (Shs2 trillion) hydropower project being funded with a loan from the Exim Bank of China.
However, following security concerns over having a bridge onto the powerhouse, the Ministry of Energy agreed with the contractor that it is constructed about 500 metres downstream the dam.

Mr Nenghai told the MPs yesterday that works are likely to stall after the Ministry of Energy declined to approve a request for the Interim Payment Certificate (IPC) .
“The outstanding payment for the project is $28m (Shs102b) and it has been laid in the payment schedules. But since August last year, the owner’s engineer has refused to pay the money. The last payment we got was in March last year. We do not have the money to pay for labour,” Mr Nenghai said.

The contractor said the estimated cost of the bridge if it was to be paid for separately by government would be $35m (Shs127.5b).
“We have borrowed from a Spanish commercial bank with branches in China to the tune of $15m (Shs54.6b) to be able to pay labour and equipment but the banks in China are closed because of coronavirus,” he added.
Mr Robert Kasande, the Permanent Secretary in the Ministry of Energy, said having released 92 per cent of the total contract sum, government has overpaid the contractor.

Government insists that the contractor must first complete the works on the bridge which are said to be between 31 and 35 per cent.
Mr Xia accepted that the 92 per cent of the work was paid because CWE had met all the contractual obligation since the hydropower dam was handed over to the government and subsequently commissioned.
“We have also finished 92 per cent of the work in the contract because we completed the dam and its generating power for the country. If they overpaid, they are doing something illegal but what I know, you pay according to the contract,” Mr Xia said.
Committee chairperson Robert Kafeero Ssekitoleko (Nakifuma County NRM) revealed that he was in possession of a document from the Uganda Electricity Generation Company Limited (UEGCL) indicating that there are a number of snags.

Snags in project
“The Owner’s Engineers attached in a document here a cost for those snags and sent it to the Contractor. The cost is only $6.3m (Shs22.9b) why can’t you clear these snags and then have you IPC approved,” Mr Ssekitoleko said.
Daily Monitor managed to see the list of snags which are all technical works on the hydropower dam.
These snags are repairs on trash rack cleaning machine; repairs on potable water and sewage treatment plant; repair of oil-water separator; repairs on power house roofing; failure to handover documentation pertaining installation of a floating boom; failure to commission the Spillway gates; and lack of landscaping.