The state minister for energy Simon D’Ujanga said the construction of Nyagak should be ready by Christmas.
Construction of the 3.5-megawatt dam started in early 2006 and was expected to last a year, but it has since dragged on with a string of deadlines set and not met.
Power consumers in the West Nile region are however worried about the quality of the final work, because construction of the dam has dragged on for years, with different contractors. They fear that the dam may have structural defects which may render it a waste.
But the minister denied that the dam has structural problems, adding that on completion it should be as good as any other.
Power concessionaire West Nile Rural Electrification Company (Wenreco) began the construction but failed, prompting government to intervene with the support of German development bank KFW.
Since then, Indian construction firm Spencon took over the civil works while Sri Lankan firm VS Hydro is supposed to do the electrical and mechanical works.
But while Spencon has done a stellar job nearing completion, VS Hydro is delaying to go on location demanding that it be paid some money first.
According to D’Ujanga, VS Hydro management says they are eager to go on site but want some payment before they can do so.
D’Ujanga reveals that KFW on the other hand is saying that while they have the money and are willing to pay, they want VS Hydro to produce a bank guarantee first.
A bank guarantee is a promise made by a bank to provide payment to another bank or lender on a bond, loan or other liability in the event of default. In other words if the debtor fails to settle a debt, the bank will cover it.
In the case of Nyagak, VS Hydro has to get a guarantee from another bank promising to pay its financial obligations to KFW.
The minister says for the past one month VS Hydro has been working on the bank guarantee and was reportedly close to securing it.
D’Ujanga said Spencon has completed one part of the reservoir and wants to do the other but to do so VS Hydro has to build a control gate so water can be diverted to enable the civil works go on.
The minister adds that while the control gate can be built by any mechanical engineering firm, the fix is that the contract has been awarded to VS Hydro and any breach would have consequences.
He said they have been convincing VS Hydro to go and fix the gate so the dam is completed, adding that they had promised to go on location soon.
D’Ujanga said once VS Hydro goes on site the dam should be ready by December since much of the works, including the powerhouse, have been completed.
West Nile and perhaps Karamoja are the only regions still not on the national power grid. Wenreco, the company that has a 20-year power concession in the region uses a 1.5-megawatt generator to irregularly supply power to just three towns – Arua, Nebbi and Paidha.
From time to time the people protest against them, the latest being an online campaign on social networking site Face book dubbed Westnilers against Wenreco.
Started just today, the campaign has attracted dozens of people already.