February 12, 2013

UNRA Defies World Bank On Banned Company

world bank country Manager  Moustapha Ndiaye
world bank country Manager
Moustapha Ndiaye

In early January 2013, Serbian road construction company, EnergoProjekt was blacklisted and suspended by the World Bank for two and half years after the “acknowledgment of misconduct in a World Bank-financed roads and development project in Uganda.”

Despite the sanction, EnergoProjekt will only be excluded from World Bank Funded and some development partner projects, but will still qualify for government funded projects.

Already, EnergoProjekt did secure a contract to work on Nakasero Road that was awarded by the KCCA.  Furthermore, according to Dan Alinange the Uganda National Roads Authority (UNRA) spokesperson, they “will honor the existing contracts” with EnergoProjekt but “fully support the steps taken by the Bank.”

Alinange however goes on to emphasize that, “UNRA is also disappointed with the actions of EnergoProjekt because we believe they did not need to do this to win this contract. They are a credible company with a lot of experience and we have been working well with them.” EnergoProjekt admitted to “fraudulent practice” after breaching 1999 Procurement Guidelines, 1.15(a)(ii) of the World Bank.

Section ii defines fraudulent practice as “a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Borrower, and includes collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the Borrower of the benefits of free and open competition;”

The World Bank did not reveal information on which particular project EnergoProjekt fraudulently misrepresented the facts. However there have been two World Bank funded projects over the last five years that EnergoProjekt has been awarded.

They completed the 44km Kampala-Gayaza-Zirobwe at the end of 2011 and are currently working on the first phase of the 166km Ushs90bn Kawempe-Kafu road. It is the later that the EnergoProjekt misrepresented the facts according to sources within UNRA.

An Auditor General’s report in 2010, had previously queried the “delayed works, inadequate provision for crossing culverts, Unrealistic increment in sub-base material valued at Ushs.1.3 billion” and pace at which EnergoProjekt was working on the Kampala-Gayaza-Zirobwe road. The cost of the 44km road by 2009 had taken up Ushs43bn of the ushs69bn required for completion of the project yet by that time only 37.47percent of the road was complete “as opposed to the planned 80.52%” according to the 2010 AG’s report.

EnergoProjekt was also at the time doing rehabilitation of the Kawempe – Luweero road (100kms) that was set to cost Ushs17bn, but by the end of 2010, the cost had gone up to Ushs30.5bn. To this regard the AG noted that “The cost increase is astronomical and shows lack of proper planning at the design stage.” However the same report did indicate that the cost per Kilometer was within range of Ugandan roads.  When asked at what point UNRA is involved in the procurement process of development partner funded projects, Alinange noted that “The procurement process is handled by UNRA under supervision of our partners.

Since the procurement involves international bidders, our partners like World Bank may be involved in confirmation and verification of some of the information provided by bidders.” The broader picture of UNRA has been value for money. Often, the Auditor General does release reports on road works around the country, and in some instances has queried the quality of work done.

At the procurement stage, some companies have also often been quoting lower bids; however after winning the contract, the costs tend to rise.  Alinange points out that UNRA only pays for works approved by the supervising consultant who he says is responsible for the quality and making sure the project is delivered on time.

“A company can be suspended for delayed works or poor works. Before termination of the contract the contractor is charged damages to the tune of 15% to 20% depending on the contract. It is only after these damages are exhausted that termination may be effected,” Alinange reveals.

Another road namely the Mbale – Soroti road has been a particular nightmare for motorists considering that by the end of November 2012, the contractor Dott Services was yet to deliver a complete stretch of the road. They had also been struggling to have the Awoja Bridge completed. Alinange noted that the problem with the Mbale – Soroti road was UNRA, because “the scope of works was changed while the contract was already on site and the designs took long to complete.

It is not entirely a problem of Dott services.” Alinange went on to reveal that the broader picture for UNRA is to create a database of all contracts awarded. He notes that UNRA has been able to crack the whip on companies “that have not performed well over the last four years and we are no longer giving them jobs.”

 

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