Museveni Directed Single Sourcing on SGR Project Top story

2800 Views Kampala, Uganda

In short
This is a regional project and Uganda was mandated to spearhead the development. We must demonstrate leadership in practice. By copy of this letter, the Permanent Secretary / Secretary Treasury, MFPED should urgently clear the Memorandum of understanding to engage CHEC, the president's letter reads in part.

Members of Parliament have accused President Museveni of bypassing the Procurement Law and ordered Works  state Minister Eng. John Byabagambi to award the contract of construction of the USD11.4 billion (approximately Ugx28trillion ) Standard Gauge Railway (SGR)  Project to a Chinese company.

Lwemiyaga County MP Theodore Ssekikubo quoted a letter dated August 22nd 2014 signed by the president directing Byabagambi to engage Chinese Harbour Engineering Corporation (CHEC) to undertake the development of Malaba, Tororo-Gulu, and Nimule with a branch from Gulu.

In the same letter the president directed the Minister to surrender project study reports undertaken by government to CHEC.  The studies are supposed to be secret documents that guide government in the implementation of the project against quotations from the contractors.

However, the President reportedly warned the Minister that he didn't want any delays in the project which the Chinese President had agreed to support while on a visit to Uganda. 

Controversy on the matter stems from the cancellation of a contract to upgrade the section from Malaba-Kampala and Bukasa port railway line to standard gauge. The contract was first awarded to China Civil Engineering Construction Corporation (CCECC) in 2012 and later to China Harbor Engineering Corporation (CHEC).

Subsequently, Eng. Byabagambi signed a memorandum of understanding (MoU) with CHEC, sealing the deal in a move protested by first company and prompted it to seek legal redress. Already the High Court has overruled Byabagambi's decision and advised the two parties to negotiate.

"This is a regional project and Uganda was mandated to spearhead the development. We must demonstrate leadership in practice. By copy of this letter, the Permanent Secretary / Secretary Treasury, MFPED should urgently clear the Memorandum of understanding to engage CHEC," the president's letter reads in part.

But Ssekikubo, alongside other members with whom they have petitioned parliament on the deal are now accusing the president of surrendering confidential government documents to CHEC.

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The second petitioner, Wilfred Nuwagaba quotes a letter written on October 7th 2014 by the secretary of the contracts committee of Ministry of works David Kivumbi where the members objected to the president's letter directing the procurement of CHEC.

"This is to inform you that in its 623rd meeting, the procurement committee considered submissions forwarded in your memo and didn't approve the procurement as per section 28 of the PPDA Act. However you have given an explanation that  the procurement follows bilateral  procedures for which we have not been provided with documents in support, the contracts committee therefore is unable to award the contract," the states.

 Although the contracts committee rejected the procurement, the President went ahead to commission the project in Munyonyo Commonwealth Resort, and the signing of the project is scheduled tomorrow Tuesday October 14th 2014.

Project Cost Skyrockets

The MPs are now arguing that although initially the project was to cost USD8.5bn approximately Ugx22trillion), it has jumped to a colossal sum of USD11.4bn (about 28trillion).

In the provisional sum, The Break down includes Facilities for employer USD65m, Tororo Polytechnic USD40m, Kampala Station Complex USD20m, locomotives and rolling USD200m, VAT USD7bn.

Nuwagaba accused the president of appointing an Evaluation and negotiation team headed by Brig Timothy Mutebile which is outside the Procurement structure of the ministry.

The legislator hinted the project's cost will further sore because compensation to the RVR has not been indicated incase CHEC decides to RVR's existing railway lines.

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"We have hidden costs that they are not telling us, even if they don't use the RVR's existing line, they have not shown money meant for compensation for in the land where the railway is going to pass," Nuwagaba said.

He also expressed fear in the absence of the law which will regulate the railway sector. The affairs of the railway as a sector were transferred to Finance ministry from Works. Nuwagaba wondered how government was going ahead to sink over Ugx33tn in a private sector without an enabling law.

The Standard Gauge Railway which is part of the Northern Corridor Integrated Projects will start from the Port of Mombasa through Nairobi in Kenya to Kampala. It will traverse the Tororo - Gulu to Nimule up to Juba route in South Sudan, from Kampala to Kasese-Mpondwe in Western Uganda on to Kigali and from Pakwach to the Democratic Republic of Congo (DRC) border and again from Mpondwe to the DRC border.

The modern high capacity, reliable, safe and affordable railway line will enable trains travel at a speed of 120 kilometers per hour and will reduce the number of days it takes to transport goods from Mombasa to Kampala to only 2 instead of the current 14 days.