New Katosi road contractor wants sh254b

By Taddeo Bwambale

KAMPALA - The new contractor for the Katosi road project has asked for sh254b for the project that was initially costed at sh165b.

This means the project, which has been bedeviled by fraud, could cost the taxpayer an additional sh110b.

This is revealed in a letter written by the Attorney General, Peter Nyombi, to the President.

In the letter, Nyombi contends that the Government would lose sh110b by enlisting a new contractor to upgrade the 74km Mukono-Kyetume-Katosi-Nyenga road.

According to Nyombi, two companies M/S JV SBI International Holdings and Reynolds Construction, emerged as the best evaluated bidder.

They want to be paid sh253.9b and the Uganda National Roads Authority (UNRA) had already forwarded the draft contract to the Solicitor General for clearance.

In his letter to President Yoweri Museveni dated January 2, Nyombi (pictured below) advises that a Chinese company, Chongqing International Construction Corporation (CICO), be retained to complete works on the road since it was cleared of fraud by the Police.
 

“I advise that M/S Chongquing International Construction Corporation could be considered for the tender to complete the above-mentioned road, if there was no evidence proving that the company colluded with M/S Eutaw Construction Company to commit fraud and if the said Chinese company had done good,” Nyombi states in the letter.

Last year, the Inspector General of Government (IGG), Irene Mulyagonja, halted works on the Mukono-Katosi road pending investigations into fraud by the contractor.

CICO had already started work on the road as a sub-contractor when the project was halted. The sh165b contract was awarded to Eutaw Construction Company, which was given sh24b as advance payment.

Out of the sum, Eutaw paid sh12b to the Chinese company to commence work.

However, the directors of the US-based company disowned the contractor and investigations revealed that the firm used forged insurance bonds to secure the advance payment. In December 2015, UNRA shortlisted two companies for a new contract to upgrade the Mukono-Katosi road after the IGG recommended a fresh process.

But the IGG barred the Chinese company from bidding for the project, saying it colluded with Eutaw to perpetrate fraud.

Through a process of selective bidding, two companies M/S JV SBI International Holdings and Reynolds Construction, emerged as the best evaluated bidders.

Nyombi, in his letter to the President, warned that enlisting the two companies would double the contract price from sh165b to sh253.9b.

“Besides the legal complications occasioned by the activities of the IGG as opposed to the price of sh165b of which sh12b was paid to M/S CICO, the contract price quoted by the two companies is sh253,940,121,150, almost double the price quoted by Eutaw,” Nyombi explains.

CICO is willing to complete the job within the sh165b budget.
 

Quoting the opinion of the acting Solicitor General, the AG also notes that the new contract cannot be signed because of a High Court order granted in favour of CICO.

The Chinese firm is protesting its exclusion from the emergency procurement by UNRA for works on Katosi road.

Nyombi faulted the IGG’s findings that there was concrete evidence to support the assertion that there was collusion between CICO and Eutaw, which amounts to fraud.

“The (IGG’s) letter was highly speculative not based on hard facts,” Nyombi states in the letter, whose purpose is ‘to bring the facts to the President’s attention” for him to give further guidance on the matter.

The AG faults the IGG for ‘frustrating’ efforts by his office to block the court order issued in favour of the Chinese firm.

He said the IGG’s actions amounts to violation of the Constitution.

“Although we (AG’s office) applied to have the court order revoked, the process was frustrated when the IGG, contrary to the clear provisions of Articles 119 and 250 of the Constitution, applied to be substituted for the AG as the respondent in MISC Cause No 63 of 2014.”

But the IGG spokesperson, Ali Munira, yesterday said the inspectorate stood by its report on CICO and Eutaw, but would not discuss the merits of the case since it is before court.

On the issue of costs, Munira stated: “We should not justify wrong procedures because of costs. On our part, we feel that procedures must be followed.”