An inquiry into the controversies surrounding the award of a $1.5 billion (about Ush4 trillion) tender for the construction of the standard gauge railway line heard that President Museveni “personally” procured China Harbour Engineering Corporation (CHEC) to construct the eastern route of the railway line.
Ugandan MP Wilfred Niwagaba, one of the five MPs who raised the red flag over the deal, tabled three letters from Museveni, with orders that the deal be offered to CHEC.
In his August 22 letter to the Works minister and several government officials, Mr Museveni also directed that a feasibility study conducted by the government be given out to CHEC at no cost though the government paid $5 million to carry out the study, according to Mr Niwagaba.
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“We must demonstrate leadership in this project. I do not want any further delays. I hereby direct that: engage CHEC to undertake the development of Kampala-Malaba-Tororo –Gulu-Nimule with a branch from Gulu to go via Pakwach. Utilise the studies undertaken by government to fast track the development of SGR,” read part of Mr Museveni’s letter.
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Niwagaba accused the President of influence-peddling.
“He becomes the chairman of the contracts committee. The President is not only awarding a contract to CHEC but also directing government officials to simply clear,” Niwagaba said.
“The process is out rightly in violation of all sections of the law related to procurement. He personally procured this company called CHEC and if you read the law, the President is not anywhere near the procurement process of the laws of Uganda,” he added.
Following the President’s directive, junior Works minister John Byabagambi chaired a meeting where it was agreed to “bypass procurement procedures and ensure that there is no competitive bidding” for the deal, according to minutes of the February 28, 2014 meeting tabled before the committee.
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The Permanent Secretary in the Ministry of Works is also accused of writing letters directing the contracts committee of the ministry to waive provisions of the law and directly award the deal to CHEC, a process that had been rejected by the Public Procurement and Disposal of Public Assets Authority.
The petitioners also poked holes in the contract awarded to CHEC, saying the firm did not conduct any feasibility study, is unaware of the route the line is taking, the price for constructing and the lifespan of the railway line.
The deal was also challenged by the permanent secretary in the Finance ministry, Mr Keith Muhakanizi, who in a November 4 letter, warned the Works Ministry that the work being done on the project is not enough to warrant financing.
“Preparatory work on the segment has not been sufficiently concluded to enable contract signature presented for financing. This is because significantly more preparatory work needs to be concluded the Tororo-Gulu-Nimule and other Uganda SGR segments,” Muhakanizi, who is also the Secretary to the Treasury, wrote.