The Speaker Rebecca Kadaga is to engage the Ministry of Energy to write to the Solicitor General to look into discrepancies regarding payment to China International Water and Electric Corporation for the Isimba Hydropower Electric Power Station.
China International Water and Electric Corporation alleges that the government has declined to pay US$28 million for works on the dam and bridge which work is at 75 percent completion.
“We have communicated with relevant stakeholders including Ministry of Finance and Ministry of Energy, but we have not gotten any resolution on the matter. We have not received full payment for the dam, yet it was commissioned last year,” said Xia Nenghai, the representative of the Chinese firm.
He added that there were some concerns raised on defects on the some parts of the dam, which the contractor had made significant progress on repairing with ongoing works even during the national lockdown period.
This was revealed in a meeting attended by Finance Minister Hon Matia Kasaija and Uganda Electricity Generation Company Limited (UEGCL) Executive Director, Eng. Harrison Mutekanga.
The meeting was held at Parliament on Tuesday, 15 September 2020.
Matia Kasaija said that government entered into a single contract agreement with China International Water and Electric Corporation to construct the Isimba Dam and Bridge at US$567.7 million.
He added that US$525.3 million was paid with the remaining balance lying within a defective period that ought to be validated by a letter of credit.
“There has been a disagreement on what should be paid especially regarding the manner of wording in the agreement,” Kasaija said.
Eng. Mutekanga said 17 certificates worth US$525 million had been certified and paid to the contractor with the balance consisting of retention money to be paid to the contractor after the successful completion of the project.
He added that some of the money had been withheld because of defects in the previously completed projects.
“The contractor also made mistakes. The bridge was supposed to be above the Isimba dam but he is now facing challenges in building it since he had not designed it that way. This means he had to spend extra money,” Mutekanga said.
The contractor, however, told the meeting that all payment obligations ought to be governed by the initial contract signed between Government and China International Water and Electric Corporation.
Mutekanga said the contractor had presented a request to revisit the original payment schedule adding that the schedule had been distorted by making the construction of the bridge a separate project from the dam.
Kasaija requested the Speaker to engage the Permanent Secretary of the Ministry of Energy to seek the intervention of the Solicitor General on the matter for an amicable way forward.