Salini loses Shs60b London appeal over Northern Bypass

Friday April 5 2013

Part of the Northern Bypass that was opened in October 2009

Part of the Northern Bypass that was opened in October 2009. The contractors, Salini Costruttori, have been ordered to complete defects on the road. PHOTO BY Isaac Kasamani 

By John Njoroge

A London arbitration panel has ordered Italian construction firm Salini Costruttori to complete defects on the Northern Bypass, after dismissing their application for a further Shs60 billion for the delays in completing the hitherto controversial project.

The panel of three arbiters – John Beechy, Paul B. Hanoon and Robert Gaitskell in a March 20 ruling, said Salini had breached their contract and therefore was not eligible for compensation because the firm had “failed to justify its inability to meet the specification and to justify its decision to stop work on January 2, 2008”, adding that the government had “successfully rebutted” Salini’s arguments.

Salini had dragged Uganda to court, seeking an additional Shs60 billion pay, following its work on the Northern By-pass that cost Shs98 billion. The European Union provided funding to the tune of Shs84 billion at the time.

The project delayed for more than three years (from November 2006 to October 2009) after Salini suspended works on the final layer of the road, disputing designs provided by BCEOM of Guyancourt, France.
Acting Uganda National Roads Authority executive director Ssebuuza Kimeeze could not be reached for comment by press time. However, UNRA legal counsel Marvin Baryaruha said the ruling is a warning to contractors to take the roads agencies enforcement role seriously.

“No contractor will take UNRA for a ride using fictitious claims because we shall not accept such claims again. We have the capacity to defend our decisions,” he said by telephone.

In their ruling, the London arbiters dismissed Salini’s technical arguments that the designs for the road were flawed.

“Nor, on the basis of the evidence before it, does the Tribunal accept Salini’s contention that its workmanship was not in any way a factor in its inability to achieve compaction. The BCEOM Asphalt Specification was plainly not impossible to achieve,” they added.

BCEOM had also been hired as a Works ministry consultants.

“Accordingly, the Tribunal finds that Salini’s decision to suspend the works on January 2 2008 was not justified under the terms of the contract,” the Tribunal concluded.

Road to crack
Salini had argued that “the road would crack in less than two years”, although it was expected to last between 15-20 years.

Salini engineers told the government that they opted to seal the road “with an additional layer of asphalt or have the design changed.”
According to Salini engineers, the BCEOM designs were “so open textured that the bitumen oxidizes quickly”. The required complexion could not be achieved “because the mix design was wrong”.

“The Tribunal has determined that the relevant delays to the project arose from delays caused by both Salini and by Uganda.

It concludes that Salini is entitled to an extension of time to the extent claimed. However, Salini was nevertheless in breach of its contractual obligations, as detailed above, and so it is not entitled to additional payments under GC Artilce 55, nor is it entitled to damages under GC Article 63,” the abettors ruled.
The arbiters attributed their decision on the basis of “the documentary record and the evidence before it”.

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