France refunds sh16b for botched Bugiri road contract
May 11, 2005
THE Government has recovered over sh16b from a leading French bank on the botched Jinja-Bugiri Road rehabilitation contract, which was being executed by Basil Reed-Bouygues Joint Venture.
By Hillary Kiirya and Hamis Kaheru
THE Government has recovered over sh16b from a leading French bank on the botched Jinja-Bugiri Road rehabilitation contract, which was being executed by Basil Reed-Bouygues Joint Venture.
The bank, Societe Generale, undertook, under the advance payment guarantee, to pay 6.8million Euros (about sh15b) and sh1.3b if the contract was terminated. The construction of the road had stalled since last December following termination of the contract.
The ministry of Finance sources said the contract was terminated after the contractor abandoned it from December 2004 to February 2005. The Government sued them seeking to recover the money that had been advanced.
The acting director of Civil Litigation in the Attorney General’s Chambers, Joseph Matsiko, who represented the Government in Paris, was not available for comment.
A source said after the contract was terminated, the Government called on the Advance Payment Guarantee from Societe Generale, but the Joint Venture Companies went to the Commercial Court in Paris and obtained an order stopping Societe Generale from paying the money.
But the court concurred with the Ugandan lawyers and granted the claim.
The bank had refused to comply with the court order for a month.
Nasasira told Parliament yesterday that the Government had contracted a foreign company, H Young, to start emergency works on the road next week.
He said another contractor will be appointed next month to carry out our the major works.
He said engineers were on standby in case the road became impassable.
Nasasira said only sh30b had been paid to the contractor. He said the company had kept the money in different countries and that after the court victory in France, it placed a caveat on it in South Africa. He said Government would recover it.
THE Government has recovered over sh16b from a leading French bank on the botched Jinja-Bugiri Road rehabilitation contract, which was being executed by Basil Reed-Bouygues Joint Venture.
The bank, Societe Generale, undertook, under the advance payment guarantee, to pay 6.8million Euros (about sh15b) and sh1.3b if the contract was terminated. The construction of the road had stalled since last December following termination of the contract.
The ministry of Finance sources said the contract was terminated after the contractor abandoned it from December 2004 to February 2005. The Government sued them seeking to recover the money that had been advanced.
The acting director of Civil Litigation in the Attorney General’s Chambers, Joseph Matsiko, who represented the Government in Paris, was not available for comment.
A source said after the contract was terminated, the Government called on the Advance Payment Guarantee from Societe Generale, but the Joint Venture Companies went to the Commercial Court in Paris and obtained an order stopping Societe Generale from paying the money.
But the court concurred with the Ugandan lawyers and granted the claim.
The bank had refused to comply with the court order for a month.
Nasasira told Parliament yesterday that the Government had contracted a foreign company, H Young, to start emergency works on the road next week.
He said another contractor will be appointed next month to carry out our the major works.
He said engineers were on standby in case the road became impassable.
Nasasira said only sh30b had been paid to the contractor. He said the company had kept the money in different countries and that after the court victory in France, it placed a caveat on it in South Africa. He said Government would recover it.