Uganda Court Blocks Chinese Bid for $2 Billion USD Karum Dam

KAMPALA, Uganda

Uganda’s High Court has issued a temporary injunction stopping the Ministry of Energy from opening a bid by China International Water & Electric Company (CWE) for the $2 billion USD Karuma Dam project.

The court has also called for suspension of the procurement process for the 600 megawatt-capacity dam until a case filed by a private citizen, Twine Muganga, has been heard and ruled on.

Muganga claimed that “the bid submitted by CWE contained gross misrepresentations, falsehoods and exaggerations of its capacity and experience to handle the Karuma project, intended to mislead the respondent and gain unfair advantage over the worthwhile bidders.”

The case will be heard starting on October 5.

Despite the injunction, reports surfaced in Kampala this week that the government had already given the green light to award the contract to CWE after President Yoweri Museveni met with top Ministry of Energy officials and representatives of the Chinese firm.

Energy Minister Irene Muloni has denied awarding CWE the contract, although she acknowledged to Ugandan media that the meeting did take place.

“No company has been awarded the Karuma Dam contract. The procurement process is still on,” she told a local daily on September 25.

International companies that submitted bids for the project, including Vinci Construction, Orascom Constructon Industries and Italy’s Salini, have cried foul over the handling of the procurement process, saying CWE has been given an undue advantage.

“We wish to express our dissatisfaction with this and we hereby request an administrative review of the procurement process, as we believe that our bid was not fairly evaluated,” said Vinci’s Michel Large in a letter to Uganda’s Public Procurement and Disposal Authority (PPDA) early this month.

“We would like to reiterate that the information used by the evaluation committee/contracts committee to pass CWE at the technical stage was misleading/contained false data,” Large said.

“According to the PPDA definition of fraudulent practice and on the basis of the available evidence, we implore you to on one hand suspend the process … and on the other hand to seek verification from all the concerned parties mentioned, as it is our contention that such serious misrepresentations of facts are prejudicial to the other bidders in this process.”

The PPDA has already asked the Ministry of Energy to review the procurement process for the Karuma Dam, although the ministry has not publicly responded the watchdog’s directive.

Previously, a group of experts had questioned the structural design of the dam, arguing it was unviable and needed a review before construction begins.

In a report titled “Weaknesses in the Design of the Karuma Project,” widely circulated in Ugandan media, some of the experts cited concerns over the location of the dam, the design of the water intake, the water losses and the operating water levels in the reservoir.

The project, which was designed by India’s Energy Infratech Private Limited after an earlier design by Norway’s Norpak was discarded, has been delayed for six months because of the contentious procurement process, which is now mired in corruption allegations.

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