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MPs stop payments for works on Hima-Katunguru road

By Mary Karugaba

Added 19th October 2016 05:55 PM

According to documents presented to the committee, although UNRA signed a contract with China Railway No. 3 Engineering Co Limited for the rehabilitation of the road, the work was to be executed by another Chinese company, Railway No.3 Engineering Group Co. (Uganda) Limited.

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According to documents presented to the committee, although UNRA signed a contract with China Railway No. 3 Engineering Co Limited for the rehabilitation of the road, the work was to be executed by another Chinese company, Railway No.3 Engineering Group Co. (Uganda) Limited.

PIC: Executive Director UNRA,Allen Kagina leaves after appearing before the Commissions, Statutory Authorities and State Enterprises Committee of Parliament(COSASE) on October 19 2016. Photo by Miriam Namutebi.

Members of parliament on Commissions, State Authorities and State Enterprises (COSASE) committee have stopped payments for the rehabilitation of 58 Km Hima-Katunguru road, in western Uganda

This was after the MPs raised a red flag on the Chinese companies that were involved in the sh83b road project.

 According to documents presented to the committee, although UNRA signed a contract with China Railway No. 3 Engineering Co Limited for the rehabilitation of the road, the work was to be executed by another Chinese company,  Railway No.3 Engineering Group Co. (Uganda) Limited.

This was the same process that was involved in the upgrade of Kanoni-Sembabule-Villa Maria road at a cost of sh239b. The company that bided and won the tender transferred the responsibility to another company that eventually did the work.

Upon completion of the Kanoni-Sembabule-Vila mariya project, UNRA again signed another contract in May 2016 for the rehabilitation of Hima-Katunguru road. 

China Railway No.3 Engineering Group Co. (Uganda) Limited was scheduled to start the civil works next month upon payment of part of the money by UNRA.

Documents further revealed that whereas China Railway No. 3 Engineering Co Limited is a state owned company while Railway No.3 Engineering Group Co. (Uganda) Limited is owned by two shareholders  Sun Yang Jun and Zhao Jun.

But when the Committee reportedly started investigating the operations of the company two weeks ago, the shareholders reportedly transferred the shares to China Railway No. 3 Engineering Co Limited.

During the meeting with UNRA officials led by Kagina yesterday, the MPs demanded to know why UNRA officials paid and accepted a different company from the one they had signed a contract with to do the work. They also wondered why the Authority signed a second contract with the same company despite the anomalies.

“How can a big company bid, out compete other companies, wins a contract and then steps aside and another small company comes in and does the work. You even go ahead to pay the small company knowing very well that you never signed any contract with it?” Committee chairman Abdu Katuntu asked.

Kagina explained that China Railway No.3 Engineering Group Co. (Uganda) Limited was allowed to carry out the civil works after the main company authorized it to do so through a board resolution and powers of attorney.

“Although we signed the contract with China Railway No. 3 Engineering Co Limited, the payments were to China Railway No.3 Engineering Group Co. (Uganda) which was executing the work,” she said.

But MPs discovered that the powers of attorney and the resolution were invalid as they were not registered in Uganda and also witnessed.

They asked UNRA to stop any payments unless China Railway No. 3 Engineering Co Limited agrees to do the works.

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