Construction company sues KCCA, demands over sh1b

May 17, 2016

The company said that KCCA issued four certificates for payment for the work done at various stages and dates, through Arch Consults, but never paid all the money.


A construction company, Prime Contractors Limited, has dragged Kampala Capital City Authority (KCCA), to the commercial court demanding over sh1b for breach of contract.

According to the plaint filed at the courts' registry in May 13, 2016, the company wants to recover a total sum of sh1.32b from KCCA, being the outstanding balance for the upgrade of drainage black spots around the city centre.

Through Kandeebe Ntambirweki and Co. Advocates, the company stated that it entered into a contract with KCCA's drainage black spots in Kampala-Phase II project contract, in January 20, 2012.

"During the execution of the project contract, the works were re-scoped by the defendant (KCCA) but nonetheless, the plaintiff followed the defendant's project manager's instructions and completed," reads part of the plaint.

The company said that KCCA issued four certificates for payment for the work done at various stages and dates, through Arch Consults, but never paid all the money.

"Upon finishing the works, the defendant through its technical consultant, Arch Consults in association with Wanjohi consulting engineers issued a final certificate of completion," it further states.

In July 10, 2015, through its advocates, it wrote a letter of intention to sue, allegedly specifying the outstanding balance and in reply KCCA said that the claim was under review by the Director Engineering and Technical Services and promised to make payments  accruing to the contract. It also alleges that KCCA requested it to refrain from suing them.

The company claimed that they wrote a demand letter in July 31, 2015 and also wrote a computation of their interests to KCCA, informing it that per the contract, delayed payment on each certificate and late payment outside 30 days attracts interest of 25% per annum, at the commercial borrowing rate.

The plaint also stated that in November 23, 2015, the company's advocates wrote another letter to KCCA requesting for a meeting in order to verify the exact money that is outstanding and on February 5, 2016, wrote another letter forwarding the calculations of the outstanding balance.

The company alleged that despite all these efforts, no payment or response has ever been given to them, adding that this is in total breach of contract.
The company wants court to declare that KCCA breached the contract and compel it to pay the remaining balance of sh1.32b at an interest rate of 25% from the date of judgment till payment in full.

Meanwhile, the court summoned KCCA to file its defence within 15 days.

The summons which were seen by New vision was issued Monday(May 16) by the courts' deputy registrar.

The case has been allocated to Justice Christopher Madrama.
 

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