DON’T LET CWE OFF THE HOOK, THEY MUST FIX ISIMBA

Last month we had a crisis with the shutdown of the 183 MW Isimba dam which led to major blackout unseen for at least a decade.

The shutdown followed a flooding of part of the power house partly due to human error but largely due to defects that arose from the dam’s construction.

The challenges at the dam persist. Engineers – local and foreign, have looked over the dam and have reported that there are such serious defects as to threaten the very existence of the facility. In so many words, maybe out of professional courtesy, the reported the dam was shoddily built and major remedial works will be required to ensure the dam lives to the full length of its anticipated life.

But these are just symptoms of one of the worst procurement processes in living memory and full responsibility for this debacle should fall squarely on the shoulder of energy ministry officials, past and present, who were involved.

It started off in 2011 when government invited bids to build the Karuma dam in northern Uganda. The multi-billion-dollar project brought out the worst excesses of our public officials who in cohorts with private sector players fought viciously to win the deal. The

energy ministry officials at the time, ignored judicial reviews, parliamentary and cabinet resolutions to force their favourite contractor – China International Water & Electric Corp (CWE) past the finish line.

It took a meeting with President Yoweri Museveni to resolve the issue. His Solomonic wisdom at the time was to offer 600 MW Karuma dam to Chinese contractors Sino-Hydro and the 183 MW Isimba dam to CWE, which while it was irregular, made sense given the impending power shortages.

But the issue was far from over. The energy ministry then refused to relinquish control of the project to Uganda Electricity Generation Ltd (UEGCL), never mind there was an agreement to that effect, only doing so when the construction was far along. The result of this is that poor supervision of the construction has led to Ishimba’s current problems and the more than three-year delay for the commissioning of Karuma dam.

While all that is water under the bridge, it provides useful context in understanding todays shenanigans and determine what drastic steps have to be taken in the future.

According to people familiar with the situation CWE has been dragging its feet on initial remedial works on the dam. Some suspect they want the Liability Defects Period to expire and they leave Uganda holding the bag with a bad dam.

But the recent aforementioned engineers report on the dam, show that it is urgent that the major defects to the dam be repaired otherwise the dam may very well be swept away, especially if the rains raise the level of Lake Victoria.

Populations down stream as well as key infrastructure are at risk if Isimba is swept away, so the need for urgency in fixing the issue cannot be overstated.

Instead CWE is playing hide and seek and trying to wiggle themselves out of making good on their shoddy work....

According to sources familiar with the situation they dispute the scope of remedial work required, have even suggested a financial compensation instead of them fixing the defect even they acknowledge exist and dismiss any attempts to withhold monies still due to them on the original contract.

CWE only have their professional reputation to care about, which they clearly don’t think much of, but for Uganda Isimba dam’s fate has far reaching consequences for our economy. Clearly, we do not have the luxury of time.

While financial compensation for bad work is on the table, we should insist that CWE remedy the defects and hand us a dam that works as it was supposed to, rather financial compensation. Maybe we should cut our losses, hire another contractor to do the remedial work, hoping that the monies still due to CWE would be enough to sort out the problem.

But this should be a lesson to us as a country.

While we are grateful to China for coming to our rescue in building our electricity generation capacity when everybody else was looking the other way, it is bad manners, in what ever culture, to then deliver shoddy work. 

The dam is not an act of charity by China to us, in fact, we are paying commercial rates for the loan we took out with the China Exim Bank to build the dam. The China Exim Bank may want seriously consider blacklisting CWE, like the world Bank did in 2014, if they do not bring this misadventure to a mutually satisfactory conclusion...

One last thing. While we complain about the cost of the tariff due to the Bujagali dam, which was built and is being operated by Bujagali Energy Ltd, we are not tearing our hair out trying to fix or at the bare minimum Bujagali despite our complaints may end up being cheaper than the “cheaper” Isimba dam.