W. Nile power firm broke
Jul 21, 2009
SUB-CONTRACTED firms for the Nyagak hydro-electric dam project have laid down their tools, accusing the West Nile Rural Electrification Company (WENRECO) of non- payment.
By Frank Mugabi
SUB-CONTRACTED firms for the Nyagak hydro-electric dam project have laid down their tools, accusing the West Nile Rural Electrification Company (WENRECO) of non- payment.
The firms led by CKD Export, a Czech company, said they abandoned work in March because WENRECO failed to pay them for works they had done since January.
Filip Kysnar, the CKD site manager, said they were demanding over $260,000 (about sh500m) in arrears.
He said this had incapacitated his firm from paying other sub-contractors like Sobetra, which is working on the tunnel and Reincon, which is constructing the dam.
“We have been unable to get any concrete reason from WENRECO, yet we are not able to finance the project from our resources,†Kysnar told the energy minister, Eng. Hillary Onek, who inspected the dam over the weekend.
Onek was accompanied by the energy state minister, Eng. Simon D’Ujanga and Peter Lokeris, the mineral development state minister.
WENRECO, which is owned by the Aga Khan’s Industrial Promotion Services (IPS), was given the Nyagak contract after agreeing with the Government to implement a $12m (sh25.3b) rural electrification project in the off grid West Nile region.
Part of the deal was to construct a $8.6m (sh18b) dam along Nyagak River in Nebbi district as the first hydro-electric power source in the region.
Dr. Kevin Karuiki, the head of infrastructure at IPS, said the Government’s obligation was to subsidise 60% of the project funding so that WENRECO generates and supplies electricity at an affordable tariff.
Karuiki said although the Government had been fulfilling its obligation on a reimbursement basis, WENRECO had run short of money to continue with the dam construction.
He added that part of the money they had earmarked for the dam was spent on purchasing fuel to run the thermal plant that was set up to act as a meantime power source for the local population.
“We expected that by December 2007, the dam would be functional and therefore, we would spend less on fuel. But for the last one year, we have had to continue buying fuel to ensure there is power,†Karuiki explained.
He said the only option was for the Government to find funds and become a co-investor with WENRECO so that the dam is completed.
However, Onek said it was becoming unsustainable for the Government to continue funding private companies.
“We are a poor country. We can’t continue funding private companies,†Onek said, adding that WENRECO had been given a 45-day ultimatum to show cause why its contract should not be cancelled.
“This ultimatum is expiring within a week and if we don’t get a satisfactory answer, the Government will be obliged to terminate their licence,†Onek said.
He revealed that there was already a “Plan B†arrangement to take over WENRECO’s assets and procure another contractor to finish the dam.
Onek said in the meantime, the contractors had up to December 24, as a last warning, to finish the job. He said a schedule had been made with the President to commission the dam on December 24 and if it was not met, all contracts would be terminated and the firms responsible blacklisted.
SUB-CONTRACTED firms for the Nyagak hydro-electric dam project have laid down their tools, accusing the West Nile Rural Electrification Company (WENRECO) of non- payment.
The firms led by CKD Export, a Czech company, said they abandoned work in March because WENRECO failed to pay them for works they had done since January.
Filip Kysnar, the CKD site manager, said they were demanding over $260,000 (about sh500m) in arrears.
He said this had incapacitated his firm from paying other sub-contractors like Sobetra, which is working on the tunnel and Reincon, which is constructing the dam.
“We have been unable to get any concrete reason from WENRECO, yet we are not able to finance the project from our resources,†Kysnar told the energy minister, Eng. Hillary Onek, who inspected the dam over the weekend.
Onek was accompanied by the energy state minister, Eng. Simon D’Ujanga and Peter Lokeris, the mineral development state minister.
WENRECO, which is owned by the Aga Khan’s Industrial Promotion Services (IPS), was given the Nyagak contract after agreeing with the Government to implement a $12m (sh25.3b) rural electrification project in the off grid West Nile region.
Part of the deal was to construct a $8.6m (sh18b) dam along Nyagak River in Nebbi district as the first hydro-electric power source in the region.
Dr. Kevin Karuiki, the head of infrastructure at IPS, said the Government’s obligation was to subsidise 60% of the project funding so that WENRECO generates and supplies electricity at an affordable tariff.
Karuiki said although the Government had been fulfilling its obligation on a reimbursement basis, WENRECO had run short of money to continue with the dam construction.
He added that part of the money they had earmarked for the dam was spent on purchasing fuel to run the thermal plant that was set up to act as a meantime power source for the local population.
“We expected that by December 2007, the dam would be functional and therefore, we would spend less on fuel. But for the last one year, we have had to continue buying fuel to ensure there is power,†Karuiki explained.
He said the only option was for the Government to find funds and become a co-investor with WENRECO so that the dam is completed.
However, Onek said it was becoming unsustainable for the Government to continue funding private companies.
“We are a poor country. We can’t continue funding private companies,†Onek said, adding that WENRECO had been given a 45-day ultimatum to show cause why its contract should not be cancelled.
“This ultimatum is expiring within a week and if we don’t get a satisfactory answer, the Government will be obliged to terminate their licence,†Onek said.
He revealed that there was already a “Plan B†arrangement to take over WENRECO’s assets and procure another contractor to finish the dam.
Onek said in the meantime, the contractors had up to December 24, as a last warning, to finish the job. He said a schedule had been made with the President to commission the dam on December 24 and if it was not met, all contracts would be terminated and the firms responsible blacklisted.