After canceling a $2.2-billion engineering, procurement and construction contract with a Chinese firm for a 600-MW hydropower dam, Uganda is seeking to qualify a new list of international EPC bidders in order to salvage the Karuma project.
According to Uganda government officials, China International Water and Electric Corp. (CWE) falsified documents that allowed it to prevail against other international competitors including Salini S.p.A, Vinci Construction, Orascom Construction and South Africa’s Group Five.
In late March, after CWE’s successful bid was thrown out, Irene Mulyagonja, Uganda's inspector general of government, directed the Ministry of Energy and Mineral Development to invite fresh bids “by identifying and short-listing reliable and reputable international EPC contractors who have successfully executed projects of similar magnitude."
In its bid, officials said, CWE claimed the Yunnan Dayongjiang II hydropower project in China, which it claims to have executed, had a 600-MW capacity and, therefore, met solicitation-document requirements. In fact, the structure's capacity is 70 MW, “representing a 751% discrepancy,” Mulyagonja said.
The IG continued, “CWE also inflated the capacity of another dam project, called Qingshan, from 20 MW to 640 MW, representing 3,100% discrepancy.”
In its bid, CWE inflated the Dayingjiang II dam’s cost to $315 million from $63 million. The Chinese firm also claimed to be the lead party in a joint venture for heightening the Rosieres dam in Sudan. In fact, another Chinese company, Sinohydro Corp., led the effort, the Ugandan government said.
In November 2012, unsuccessful Italian bidder Salini went to court and obtained orders to block CWE as the winner of the lucrative tender over claims of corruption on the part of Ministry of Energy and Mineral Development officials and irregular tendering process.
The high court in Uganda ordered a re-evaluation of the bids by all prequalified EPC bidders. Judge Eldad Mwangusya invalidated the original evaluation report that favored CWE. He also barred the team involved in the initial evaluation process from participating in the re-evaluation process.
CWE did not respond to emails and phone calls seeking comment.
A 100-page dossier presented in the high court also included details by a whistle-blower who revealed how corruption and irregularities had engulfed the procurement process.