Cabinet upholds suspension of Karuma bid

Apr 14, 2013

A Cabinet meeting chaired by President Yoweri Museveni adopted the IGG recommendation to halt the current tendering for the $1.6b Karuma Dam project.

By Paul Busharizi

A Cabinet meeting chaired by President Yoweri Museveni on Friday adopted the Inspector General of Government (IGG) recommendation to halt the current tendering for the $1.6b Karuma Dam project.

Cabinet also recommended continued collaboration with China on the project as they have pledged to fund the 700MW dam construction.

“The Cabinet has pushed for greater bilateral cooperation with China on this project. We have only $600m in the energy fund and we are looking to China for the extra $1b in concessionary funding,” an official familiar with the proceedings said.

If Uganda works directly with China, the procurement process will take six months and construction will start by the end of the year. The dam is expected to take six years to construct.

The Cabinet also instructed the IGG, Irene Mulyagonja, to start investigations into all officials who were involved in the derailing of the process.

Mulyagonja, in her report, recommended, among other things, the suspension of the existing process, disqualification of one bidder and direct procurement of a new contractor.

Mulyagonja last month put a hold to the tender process of the 700MW dam, ruling that it had been riddled with irregularities and that there was a deliberate attempt to favour Chinese firm, CWE, which did not meet the technical qualifications to do the project over other more competent firms.


The bridge at Karuma Falls Dam was opened wayback in 1963. PHOTO/New Vision archives

In a near four-hour meeting on the matter, Mulyagonja presented her report to Cabinet, before the Attorney General, Peter Nyombi, gave a legal opinion which suggested, among other things, that the Government is not bound by the IGG’s report and that they can go ahead with the process as it is.

The Cabinet, after hearing both sides, adopted the IGG’s report, after which the President instructed her to investigate the case further, with a view of prosecuting officials who may have led to the delay of the tendering process.

The tender process started in the middle of 2011 and the site was supposed to be handed over to the contractor in March last year.

Problems surrounding the dam’s tender began to surface when key deadlines were missed by the energy ministry officials who were handling the procurement. Then a whistle-blower reported to the Government’s procurement authority, PPDA and the IGG that officials were pushing CWE to win the deal.

In August last year, in the middle of the tender process, the Attorney General and energy ministers Irene Muloni, Simon D’Ujanga and other senior ministry officials presented CWE bosses to Museveni as the parties who had won the deal.

Competing firm Salini got a High Court injunction on the process to ensure it does not go forward before administrative and judicial reviews are completed.

The judicial review found that the process was badly flawed and called for suspension of the process to iron out the inconsistencies.

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