Costly Delays In Karuma Power Project

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Allegations of bribery and fraudulent procurement have wrecked the Karuma Hydro Power Project that was hoped to avert the looming power crisis in the country in the next two years.

Karuma hydro project was scheduled to come on board before the country slips back into darkness while the recently completed 250-megawatt Bujagali Dam can still meet the current electricity demand, but construction is yet to commence.

When the Ministry of Energy and Mineral Development was finished with the bidding process and moving on to the evaluation process early last year, government was forced to halt the process over allegations of corruption.

In September2012, Nakawa High Court issued an injunction on the bidding process following complaints by an apparent whistle blower, one Twine Muganga. Muganga argued that China Water and Electric Corporation, the Chinese company that had remained in the race was procured fraudulently and that the company had submitted false and conflicting documents exaggerating its capacity to handle the project.

While the case was still before Justice Faith Mwondha, an Italian company, Salin SPA, also went to court seeking an order to block the Energy Ministry from continuing with the bidding process saying that it was unfairly left out of the process.

In November 2012, High Court Judge Eldard Mwanguhya ordered for the re-evaluation of all the bids that were prequalified. As the ministry of energy had gone on to the financial and technical evaluation stage, Inspector General of Government Irene Mulyagonja stopped the process saying that another whistle blower had raised issues of corruption and abuse of authority within the process.

Justice Mulyagonja ordered that the ministry stops any activity on the project until her office completes investigations into those accusations. One Member of Parliament, however, did not agree with the IGG.
Aja Baryayanga, the Kabale Municipality MP, wrote to the IGG telling her that her decisions would have negative implications for a country whose demand for electricity is growing at a rate of more than 10 percent per annum.

Baryayanga argued that any further delays on the project should be based on strong evidence and that the ongoing investigations on the same would be enough other than halting a project that has already been delayed for over two years.

The IGG, however, responded to the legislator telling him that he has no right to stop the investigation and that carrying out an investigation or not cannot be determined by an individual who is not related to the complaint.

The MP also fears that the delays could inflate the cost of the project that was initially estimated at 2.2 billion dollars since prices of construction material continue shooting up as was the case with Bujagali.

The Ministry of Energy says now its hands are tied and that the fate of the project is in the hands of court and the IGG. Engineer Paul Mubiru, the director of energy in the ministry, told URN that they had gone as far as financial evaluation stage and that construction would be underway by now.

He said what to be done next will depend on the outcome of the IGG’s investigations. Preparations for the construction Karuma Dam go way back to 1995. The project was however halted to first concentrate on the 250 MW Bujagali dam and its construction was to commence immediately after the completion of Bujagali.

Government has failed to carry out a smooth bidding process to procure a company capable of executing the project three years after a feasibility study was done.