Special Reports

INVESTIGATION: UNRA Resists Sabotage, Museveni Clears Entebbe Expressway

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link http://clasharama.com/wp-includes/class-wp-user-query.php geneva; font-size: small;”>In September last year, http://criasaude.com.br/wp-admin/includes/class-core-upgrader.php a company which had missed out on the contract for the construction of the multi-billion contract sent an emissary disguised as a whistleblower to Criminal Investigations Department headquarters in Kibuli.

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It’s an astonishing tale of how foreign mafia gangs are exploiting the whistle blowing privileges in Uganda to sabotage government projects aimed at boosting infrastructure, tourism and trade.

So, armed with a ‘dossier,’ the ‘whistleblower’ revealed to CID that he had information of a $10m fraud by senior managers of UNRA in the contract they signed with a “questionable Chinese company” to build the new Entebbe Expressway.

“UNRA officers have handpicked a company called China Communications Construction Company (CCCC) to design and build the highway without competitive bidding as required by procurement laws of this country,” the whistleblower said.

The ‘whistleblower’ further noted that the contract was hurriedly signed without mandatory evaluation and appraisal of the project by Ministry of Finance which was supposed to assess the economic viability of such projects, check whether price is compliant and carry out environmental impact assessment and cost of settling displaced persons.

The ‘whistleblower’ also alleged that CCCC’s local representative Li Jian Bin had bribed UNRA officials in the “mess supervised over by John Nasasira and Syda Bumba.”

As if this was not enough, the ‘whistleblower’ told detectives that Jian Bin had bribed officials in the Solicitor General’s office to give clearance to the contract.

Other accusations were that CCCC could not handle the job and that the cost of the road construction had been grossly inflated.

“The cost of the road is over exaggerated. The tax payer is paying $9m per kilometer. Can UNRA and CCCC justify this price? Although the Northern bypass may not be the best road ever constructed it cost only $2.5m per kilometer. This therefore means that $9m per km is very expensive even if the rise in the cost of materials is factored in.”

Detectives hailed the ‘whistleblower,’ who claimed his visit at CID was “exercising my civic duty,” for providing the information. They promised to investigate.

UNRA RESPONDS

The dossier was not only sent to CID but also President’s office, IGG and top journalists with the view of blocking the project, which is aimed at curbing traffic along the busy Entebbe Highway, from commencement.

Due to the persistent harassment from several sections of government bodies, UNRA wrote to President Yoweri Museveni, expressing their readiness to quit the project.

“This is a design and build project financed using a concessional loan from China EXIM Bank and counterpart funding from the Government of Uganda. The project works cost is estimated at US$476milion with EXIM Bank providing a loan of $350million while the Government of Uganda counterpart funding is estimated at $126 million,” UNRA told Museveni in a letter.

The Kampala-Entebbe Expressway is a 51.4km dual carriageway starting from Kampala city at the Northern Bypass Busega roundabout and ending at Entebbe airport with a spur to Munyonyo.

This project will comprise construction of a 4 – lane dual carriageway of 37.23km road connecting Kampala North Bypass at Busega with the existing Kampala – Entebbe road at Abayita Abababiri; and 14.13 km road connecting Munyonyo through Lweza.

Comparison with other projects in the World

Chimpreports.com investigations desk, in a bid to evaluate the cost of the road -considering that a ‘whistleblower’ had alleged that it was grossly inflated, made a survey to compare project costs for road civil works in Ethiopia, Senegal, Serbia, South Africa, Kenya and USA in relation to those for the Kampala Entebbe Expressway.

Before that, it was equally important to note that, first of all the top embankment width of most of Ugandan roads is at most 11 meters compared to the top embankment width of 24.1 meters for the expressway, implying the cost would have to double.

UNRA Publicist Dan Alinange told our investigators that Ugandan roads have thin asphalt layers as opposed to the Kampala-Entebbe expressway that will have deep asphalt layers which are relatively costly.

He added: “With the exception of a section of the Kampala-Northern bypass and a section of Jinja-Bugiri, all the other roads are not dual carriageway and have no interchanges, no major bridge structures and no over or under passes.”

Alinange further stated none of these roads implemented in Uganda were built to the standard and specification as is stipulated for the Kampala-Entebbe Expressway.

COST COMPARISON

Statistics from Ethiopia Roads Authority show that the 78.0 km Addis Abab-Adam toll road (6-lane motorway) cost $612m, with each kilometer going for $7.8m – which implies that the cost per lane kilometer was $1.3.

According to World Bank, the 32km Dakar-Diamniadio Toll highway (4-6) lane motorway which cost $531m had each kilometer costing $16.6m with cost per kilometer lane at $2.7.

Just next door in Kenya, the 4-lane dual carriageway 30km Nairobi Southern by-pass cost $210m.

Yet, the 4-lane Entebbe expressway which runs a staggering 51 kms will cost $476m. This means each kilometer will go for $9.33m and cost per lane kilometer at $1.51m which is far lower than that of Kenya ($1.7m) and Dakar ($2.7) though slightly higher than Addis Abab-Adam simply because UNRA has to compensate thousands to be evicted along the way.

Alinange said this cost involves Shs100bn to compensate persons who are facing eviction.

VALUE FOR MONEY

Now, with this understood, the President was curious on safeguards put in place to ensure value for money.

It should be noted that one feature of this project financed by China Exim Bank, was that it was necessary to have in place a signed commercial contract before even the loan could be processed.

This meant that the commercial contract would be signed prior to UNRA obtaining the contractor’s works cost and quantity estimates.

The safeguards were included in the commercial contract signed between UNRA and the contractor to ensure verification of the project cost.

“Key amongst these safeguards is the fact that the Kampala-Entebbe highway commercial contract as approved by the Solicitor General on 14 October 2011 is a conditional contract which can only become effective once the following conditionalities embedded within the agreement are fulfilled,” UNRA told Museveni.

The government body further noted that the final contract price would be determined through negotiations between the Employer and the Contractor and an award would only be made after approvals by all pertinent government institutions and the project financier are obtained.

“The project works shall only progress once the Employer has reviewed and satisfied themselves with the project design; the project will be implemented according to the final detailed engineering design as approved by the Employer, and; once agreement on the contract price is reached, any changes shall be effected by way of an addendum to the conditional commercial agreement to be signed by the parties,” UNRA elaborated.

As if this was not enough, UNRA said in order to ensure value for money and also conduct a due diligence on all project components, it would secure the services of an international consultant to carry out not only the independent review of the Project Design but also carry out due diligence on the project’s specifications, construction methods and cost.

This independent professional advice would be the basis of any downstream negotiations between UNRA and the Contractor that would be intentioned towards controlling and managing the project cost.

Once the design review was completed, UNRA promised, it would share the design review report and professional advice with Ministry of Works, Ministry of Finance, PPDA and other stakeholders and wait for clearance and advice before proceeding to negotiate and agree on the final contract price with the contractor.

“It will be only after getting clearance from all these stakeholders that UNRA shall proceed to request the Contracts Committee to nominate a negotiation team to discuss with the contractor before formulating an Addendum to make the commercial agreement effective,” Museveni was informed.

UNRA also denied allegations that disbursement on the loan or Government of Uganda counterpart funding had been made.

“No disbursement shall be made until a comprehensive review of the project costs is done and the final contract price is negotiated and agreed to by all stakeholders,” the organisation informed the curious Museveni.

After several meetings with the UNRA board and independent investigations, Museveni realized that if he hesitated, the Entebbe expressway would be sabotaged as it happened with Bujagali power dam.

“If you delay the construction of this road, expect to pay four times more than the current cost because the cost of materials is shooting,” said Alinage.

What Could Have Been Done Differently?

Looking back at the implementation process for this project and the experience gained with this Chinese Concession loan, UNRA made suggestions on what could have been done differently.

One was the eligibility conditions for China Exim Bank Loan.

“We believe on future projects it may be better to negotiate with China Exim bank to change their conditions for eligibility of the loan to remove the pre-condition for a signed commercial agreement with a Chinese Supplier,” the letter reads in part.

“This would enable the loan to be processed and approved before the contractor is selected. The requirement to use a Chinese supplier can be included as part of the loan agreement making it easier to ensure that all value for money safeguards are followed such as competition and transparency.”

UNRA also suggested lowering the standard of the road, saying, in order to reduce the implementation costs for the road, they could have adopted a lower standard road as follows.

The second was the urban type dual carriageway with the normal at-grade junctions, without flyovers, (such as at Kalerwe for the Kampala Northern Bypass).

The third was constructing a two lane road instead of a dual (4-lane) carriageway.

The fourth was widening the existing Kampala-Entebbe road instead of constructing an alternative road; and fifthly, designing the road to a lower service life (say 10 years instead of the current 20 years).

The above options would avoid the interchanges (flyovers), overpass bridges and the resulting high volumes of cut and fill required to attain the level of service for a high class expressway type of road and tremendously lower the implementation costs to the level that we are accustomed to.

However, these options would not solve the problem of traffic congestion or provide the required level of service for the present and projected traffic levels on the road. The project objectives would not be met.

Then, did Uganda get a good deal?

Simple division of the overall project costs of $476m by the 51.4km total length of the project gives a ‘unit cost’ of $9.26milion per kilo metre which to all appearances is high.

This simple ratio, however, is deceptive and does not give the whole picture as can be seen from the project description and key project features.

According to Alinange, the road is built to very high construction specifications and 30 – 35% of the project costs are attributed to unique characteristics of the project such as very long bridges, toll plazas and lighting.

“The construction cost per kilometer of US$ 6.05 million (US$ 1.51 million per lane kilometer) excluding the above features is comparable to that of similar projects around the world,” he said.

To add, the US$ 1.51 million per lane kilometer is influenced by long swamp and lake treatments required for this project.

That aside, the 3.1km long bridges on this project cost $138.67m whereas the New Nile Bridge which is only 525m costs $100m.

The bridge cost on this project of $138.67m for the 3.1km long and 24m wide bridges compares very well with the worldwide unit cost for bridge structures of $2000 per square meter.

Alinange said the expressway will ease traffic along Entebbe Road, boost tourism, and enable Ugandans to access the airport without hassle.

“Most Ugandans miss flights because of the congested Entebbe Highway,” he said.

Alinange stressed the construction of the Highway starts in October considering that the contractor has already received an advance payment and is now mobilizing equipment.

Compensation of persons facing eviction starts in August this year.

Construction will start with the 5km route from Busega through Kinawa and then to Kabojja.

“The construction will take three years,” said Alinange.

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