Taxpayers in Uganda to incur extra USD 3.5 million after Chinese company failed to deliver work: Report

Kampala [Uganda], February 27 : Taxpayers will incur an extra USD 3.5 million on a component of the Entebbe airport expansion after a Chinese company failed to deliver work, Monitor reported.
Uganda Civil Aviation Authority (UCAA) has not taken against the company and not forced it to carry out the works at "no extra costs" according to the contract, Monitor reported citing investigators in the classified report.
Instead, UCAA contracted another company to do the work at an extra cost to the taxpayer, it said.
Investigators in the report highlighted that the contract specified a scope for fuel hydrants on a new apron expansion, which is to be done by China Communications Construction Company (CCCC) at a cost of USD 3.5 million. However, the scope was transferred to a different contractor, TRISTAR, as per the news report.
These funds are now reallocated to the changes in the cargo centre, which according to the contract should have been done by China Communications Construction Company (CCCC) at no extra cost. The works are part of a USD 200 million loan that the government acquired from the Exim Bank of China to carry out the upgrade and expansion of the Entebbe International Airport, according to a Monitor report.
The five-year project conducted by CCCC began in 2015 and was due to be completed in May 2021. Through the Chinese contractor, Uganda Civil Aviation Authority was to provide and upgrade infrastructure and facilities to modern systems, provide passengers with relaxing utilities, and attract revenue for Entebbe International Airport, as per the news report.
The investigators in the report concluded, "The government is bound to make heavy losses resulting from substandard work being delivered by the contractor," as per the news report.
The investigators have said that the project was rejected by cargo operators at Entebbe airport (DAS Handling Limited and the National Aviation Services (NAS), formerly ENHAS.
The airport authorities had asked the two entities to move the operations to the new facility. However, during the inspection, they found that substandard work could not support their operations, according to the Monitor report. The report noted that the cold rooms for handling fresh produce were insufficient and not positioned as expected by the standards and rules.
Investigators said that these were omissions carried out during the design and construction of the building. A source privy to the report told Sunday Monitor that UCCA officials have fiddled with numbers to protect what they say is CCCC incompetence
"UCAA team will argue that the contract sum was not changed but note that there was a scope change in which works that were supposed to be done for fuel hydrants at apron 1 were removed from the CCCC and given to TRISTAR," Monitor reported citing the source, who asked not to be named, said.
The source added, "The biggest issue is that the person in charge is the director, project manager and at the same time the contracts committee chairperson. This change and decision taken should be accounted for."
The report noted that the contractors have the responsibility to give fit-for-purpose design. The contractor should have been held responsible for the loss. Furthermore, the Uganda government should not have been exposed to the loss.
According to Monitor, the report said, "In any case," the report further observes "according to FIDIC design and build contract, clause 5.8 design error, the contractor has a responsibility to provide fit-for-purpose design."
It further noted, "Therefore, the contractor should have been held responsible for this, and government should not have been exposed to this loss. There is probably collusion with those involved to benefit from this shielding of the contractor."
Earlier this month, the top officials from UCAA were moved out of the House Committee on National Economy as they could not provide proper accountability for the loan.
Led by its Director General Fred Bamwesigye, UCAA could not explain to Members of Parliament about the funds spent on different infrastructure and works carried out by the aid of the loan, as per the Monitor report.
Further, as per the news report, UCAA is reported to have completed 96.4 per cent of a new cargo building. However, they could not give details regarding what exactly was accomplished and the amount spent. The committee vice chairperson Robert Migadde raised questions over the competence of UCAA given the failure to provide proper accountability.
Robert Migadde said, "You were given this loan because everyone thought you were fit to handle it, we, MPs, cannot be the ones to tell you the nitty-gritty of the report, that put this here and there," Monitor reported. Migadde stressed that the authority was required to provide financial and physical performance of the loan, including pictorial evidence."