Firm constructing vaccine factory speaks out

A company, which is setting up a pharmaceutical plant at Matugga on Bombo Road, has accused the contractor of breaching contractual terms and instead resorted to using politicians and security agents to intimidate them to pay for work not done. 

Dei Natural Products International Ltd, which is part of the Dei Group, says whereas they contracted Mutoni Construction (U) Ltd and paid it the required money, the latter has failed to finish the production plant and has instead dragged them to police, claiming they were not paid. 

This  publication reported last week that on October 14, 2021, Mutoni Construction (U) Ltd wrote to Police’s Criminal Investigations Directorate (CID), claiming that Dei and its director, Mr Matthias Magoola, contracted them to construct a multibillion pharmaceutical company but hadn’t paid them their agreed sum of Shs4 billion.

But Mr Magoola in a statement of defence on the record shared with Daily Monitor states that Mutoni Construction Company was paid the money to complete the project but still failed to complete the work.

Mr Magoola also told this publication in an interview on Saturday that Mutoni should stop using underhand methods and fulfil the contractual obligations.

“Mutoni should stop engaging imperialist tendencies crying over being a South African investor, because it was not given a contract because it was a South African investor, but because it undertook to construct and hand over the building to Dei within agreed timelines and standards,” Dei’s defence reads in part. 

“By failing to execute the contractor in a just and transparent manner, Mutoni cannot expect to receive free money simply because it is a company of the so-called South African investors,” it adds.

Background
On September 27, 2019, Dei and Mutoni signed a contract for the construction of phase 1 of the Pharmaceutical Production Building at Matugga at a cost of Shs9.6 billion, including both labour and supply of construction materials. 

By the terms of the contract, Mutoni was to complete the construction of the building within four months.
Mutoni took possession of the site on October 1, 2019 and was required to have completed and handed over the building by February 20, 2020. 

But Dei says Mutoni was unable to beat the deadline and requested for an extension. 

“However, Mutoni was unable to supply the materials and in order to avoid delays, it was mutually agreed by both Dei and Mutoni that the supply of materials be removed from Mutoni and Mutoni only remained with labour contract.

Any person familiar with construction will know that the biggest component of construction is materials, and labour only constitutes about 20 percent. Yet Dei has so far paid Mutoni over Shs6 billion,” Dei’s defence reads in part.

According to Magoola, Dei was patient with Mutoni and continued making demands for speeding up the project but the construction company’s promises “were always empty and not complied with.” 

As Dei was contemplating another company to complete the work, Mutoni gave assurance that once payment of Shs500 million was advanced, the project would be completed without necessity of other funds or certification. Dei agreed and paid the money but Mutoni did not complete the work.

“Mutoni’s inflated and false claim was naturally rejected by Dei and Dei suggested that an independent entity be engaged to evaluate the project for mutual settlement be engaged, but Mutoni aware of its schemes rejected the proposal and even threatened sinister schemes to tarnish the image of the project,” Dei states in the statement. 

It adds that when they engaged an independent consultant, they discovered that they had overpaid Mutoni.

It adds that Mutoni has since rejected court arbitration and instead resorted to involving police and the President, to resolve the matter.

“That contract did not involve the President of Uganda or the Deputy President of Kenya, who Mutoni is unfairly bringing into the conflict in order to malign Dei.  Mutoni needs to respect the commercial justice mechanisms in this country, and having gone to arbitration, Mutoni should have pursued the arbitration and to respect the process and the decision thereof, rather than resort to maligning Dei in the press,” Dei’s defence reads in part.

Police have since asked Mutoni to petition a civil court for remedy.