Byabagambi stuck on Katosi road project, runs to Museveni MPs drive on the Mukono-Katosi road recently. The Auditor General has recommended cancellation of the contract with a Chinese firm which was sub-contracted by a fake company for construction of the road. Photo BY GEOFFREY SSERUYANGE By Eriasa Mukiibi Sserunjogi Invalid. Deputy Attorney General says legalising the sub-contract arrangement between Eutaw and CICO is not tenable because the purported contract is null and void. Kampala. The Auditor General has recommended cancellation of the contract with a Chinese firm which was sub-contracted by a fake company for construction of the Mukono-Katosi road. The Auditor General’s recommendation has thrown the Ministry of Works and Transport in confusion over the matter. State minister for Works John Byabagambi has run to President Museveni for advice on whether he should cancel the company’s contract or allow it to continue. The President had tasked Mr Byabagambi to bring the 74km road construction back on course after Mr Abraham Byandala, the minister for Works and Transport, was implicated in inappropriate conduct in the procurement process of the project. The company, Eutaw Construction Company, which has been found to have won the road contract by masquerading as a subsidiary of an American company, is now under police investigation for alleged fraud, collusion and corruption. Sub-contracted Upon winning the contract, Eutaw was advanced Shs24 billion by the Uganda National Roads Authority (UNRA), the agency managing the road sector. However, Eutaw later sub-contracted a Chinese company, Chongqing International Construction Corporation (CICO), to do the work. When the scandal blew up, the Inspector General of Government, Ms Irene Mulyagonja, ordered CICO to stop the works. CICO, which is also under police investigation for suspected collusion with Eutaw, has pleaded with Mr Byabagambi to allow it to enter “a conditional sub-contract” with UNRA to complete the works. The company says if the contract is cancelled, it will suffer huge financial loss. Stuck between allowing the CICO contract to continue and implementing the Auditor General’s directive, Mr Byabagambi ran to Museveni for guidance. On September 29, Mr Byabagambi wrote to Mr Museveni referring to an earlier meeting with him on September 5 about Deputy Attorney General Freddie Ruhindi’s legal opinion. In his legal advice, Mr Ruhindi had said the proposal to allow CICO enter a sub-contract with UNRA would be illegal. “I agree with the views of the Deputy Attorney General as they are a reflection of what we discussed in our meeting,” Mr Byabagambi wrote to Mr Museveni. “However, considering the losses that government will incur by removing the contractor (CICO) from the site ... you guided us to see if an “amnesty” could be extended to the contractor on site... to continue with the work and the Attorney General was to give an opinion accordingly,” Mr Byabagambi added. He told the President that although the ministry had already started shopping for a contractor under the emergency situation provisions, he needed to be advised “in case we fail to get a contractor who is willing to do the job on time and at the same cost.” Deputy Attorney General Ruhindi had, in a September 23 letter, warned Mr Byabagambi against looking for ways to legalise the CICO sub-contract. “Legalising the ‘sub-contract’ arrangement between M/S Eutaw and Chongqing International Construction Corporation Ltd into a conditional contract between UNRA and CICO in order to progress the works is not tenable because the purported contract between M/S Eutaw and UNRA is null and void,” Mr Ruhindi warned Mr Byabagambi. “Technically speaking therefore,” he added, “there is no sub-contract worth talking of legalising, for even if the persons associated with Eutaw had not made fraudulent representations to UNRA prior to the signing of the contract, UNRA was not party to the “sub-contracting” between M/S Eutaw and CICO. “As such, UNRA cannot be bound by an arrangement that is illegal and expressly prohibited by the contract. Section VII, Clause 7.4 of the General Conditions of the Contract expressly prohibited sub-contracting of the whole works.” Mr Ruhindi also said it cannot be ruled out that CICO knowingly participated in the Eutaw’s illegalities. “It should therefore not benefit from the alleged collusion in getting the sub-contract. CICO is on the site illegally. It has no clean hands and it is therefore not prudent to retain them on site,” Mr Ruhindi wrote. He said UNRA should initiate a fresh procurement process under emergency situations to get another contractor to undertake the uncompleted road works. CICO pleads Three days before Mr Ruhindi gave his opinion, CICO managing director Du Xianzhang wrote to Mr Byabagambi giving the company’s “dilemma”. Mr Xianzhang said they had just completed the construction of the 103km Fort Portal-Bundibugyo-Lamia road and therefore had in place “uncommitted road construction plant and experienced foreign and local personnel” when Eutaw approached them to work on the Katosi road. “The Eutaw Construction Company pleaded with CICO to take up the proposed works because Eutaw stated that it would take them very long to get their plant and equipment mobilised to the project site in time for project commencement and inauguration,” he argued. Mr Xianzhang claims his company had incurred Shs33.6b to get the equipment on site and set up the construction plant. He said since July 1 the company carried out earthworks, opening up gravel deposits and setting out the works. He argued that cancelling the original contract with Eutaw and forcing CICO off the project would deal his company a big blow because “CICO had unknowingly been hoodwinked by Eutaw.” Mr Dan Alinange, the UNRA spokesperson, said although entering a sub-contract with CICO is an option, their “hands are tired”. “You know we were stopped by the IGG from carrying out any activities on the project,” he said. Mr Byabagambi could not be reached because his known mobile phone numbers were unavailable.
Posted on: Sat, 11 Oct 2014 22:50:26 +0000
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