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UGANDA: China's Sinohydro wins hydro power project (26/06/13)

Uganda has finally awarded an engineering and construction contract to Chinese infrastructure development firm Sinohydro for the much delayed $1.65 billion Karuma Hydro Power project on the Nile river.

A statement from the government on June 20 said: ‘Uganda has decided to award the EPC (engineer, procure, construct) contract for the construction of the 600MW Karuma hydro power plant and associated transmission line to Sinohydro Corporation.’

The contract was signed on behalf of Uganda by energy minister Irene Muloni. ‘Sinohydro has promised to commence works on site at Karuma within two weeks, thereby ensuring that the delivery of power consequently commences at the earliest possible date and without further delays,’ said the government statement.

Sinohydro has offered to undertake the project for $1.65 billion, down from the initial cost estimate of $2.2 billion.

The contract was initially due to be allocated in May 2012, with construction set to start the following month. However, legal suits, procurement flaws and intervention by the office Inspector General of Government (IGG), which ordered for fresh bidding, has kept the project waiting for over a year.

Another Chinese firm, China Water and Electric Corporation, which was earlier poised to win the contract, was disqualified after evidence emerged it had falsified information on bidding documents.

A report by IGG Justice Irene Mulyagonja said after investigations: ‘Uganda faced a huge risk of failed execution and consequent losses to the taxpayer if the contract for construction of the power station had been awarded to China Water and Electric Corporation (CWE) as fronted by the Ministry of Energy officials.

‘Our work was to investigate; which we did, and thereafter released a report whose recommendations we suggested were implemented,’ Justice Mulyagonja said.

Last week Justice Mulyagonka said: ‘The project can be kick started at any time because our recommendation of re-tendering a new contractor was implemented by the ministry before the High Court blocked the report’s findings.’

Apart from Sinohydro and CWE, Iranian firm Perlite Construction also bid for the project, which will be constructed on the Victoria Nile, at the present location of the Karuma Falls.

The contract has also been awarded two years after India’s Energy Infratech Private Limited completed its feasibility study.
Shem Oirere