By Mulengera Reporters
Former Angolan first daughter Isabel Dos Santos, who at the peak of her father Dos Santos’ 38 year-long power easily ranked the Forbe’s Magazine’s richest African woman, has been identified as the major cause why Portuguese construction firm Motal Engil (which in 2014 was contracted to expand the 21km Kampala Northern Bypass road) is outrageously behind schedule and won’t be completing soon. Being an indirect major shareholder in Motal Engil (through one of her many business entities), Isabel’s current financial woes have meant that far off companies like Motal Engil have had to struggle in absence of any significant investment by shareholders. Isabel’s woes began with the 2017 ascendance to power by Gen Joao Lourenco the anointed successor who replaced her father Mzee Eduardo Dos Santos who had ruled Angola for an eternity (1979-2017). During that period, Santos used presidential decrees to syndicate lots of business deals in favor of his daughter often in total disregard of basic public procurement laws. The different contracts had their worth at $22bn as of 2017 when her father ceased to be president. Many of these have since been annulled by Gen Lourenco for falling short of the legal provisions governing public tendering. Isabel, many of whose business entities are already struggling, has threatened to sue the Angolan state for breach of contract, a move analysts say won’t succeed but will only expose her to more scrutiny. In her hey days, Isabel had vast commercial interests in telecommunications, media, retail, finance and energy industry mostly in Angola and Portugal where she had 100s of expatriate henchmen. She also co-owned Angola cement company Nova Cimangola. She also headed the National Oil Company (NOC) having been improperly appointed by her powerful father. The state-orchestrated scrutiny following her father’s exit from power has escalated many problems for Isabel who continues to be financially stretched by a suit one of her former business partners has filed against her in the Paris-based International Court of Arbitration. At the heart of the dispute is a $3.5bn claim resulting from alleged misappropriation of revenues occasioned on telecom giant UNITEL. She is also in trouble regarding over $465m she is alleged to have spent on her luxurious shopping sprees in Lisbon in just one year (2012-13). She is also on the verge of losing her 51% shareholding in Banco Fomento de Angola (BFA) which is Angola’s leading private commercial bank.
MOTAL ENGIL WOES
Back home in Uganda is her company Motal Engil which in July 2014 was contracted by UNRA to expand the Kampala Northern Bypass by constructing the second lane equally stretching 21kms. The job was to be completed in 30 months (roughly 3 years) but it has dragged on up to this day. The original contract stipulations meant the job had to be completed latest in July 2017. But recently the UNRA management was cajoled to revise the contract and extend the expected completion date to 2021. “That extension of the completion period will make it 7 years of Ugandans suffering because of the incompetence of Motal Engil which shouldn’t have been hired in the first place because they didn’t have prior experience doing a job of similar specifications. The job must have overwhelmed them and our people are suffering. The flooding problem in Lubigi has escalated and all this is because of the delays in doing the work,” fumes nearby Nansana Municipality MP Kasule Sebunya who is one of the many local leaders who are unhappy with Motal Engil’s ineptness. “Our people originally had accepted the inconvenience of being displaced and agreed to pay the price in return for a good road that would result into development but Motal Engil and UNRA have let us down by doing the road forever.”
PROLONGATION COSTS
The fury is also because the prolongation from the original 30 months to an uncertain seven years has also pushed the project cost from the original Euros 47m (EU grant) to currently Euros 175m. Ruling NRM’s MP Kasule painfully observes it’s unfair that the additional Euros 108m will be paid by the tax payers because of Motal Engil’s ineptness. There is consensus among MPs that works Minister Monica Azuba and her Finance counterpart Matia Kasaijja must face some tough questioning over the same. Majority MPs want the already struggling contractor to be the one to meet this cost and not the GoU. Sebunya says lives have been lost and people’s livelihoods destroyed and Motal Engil must be sanctioned. There could soon be a resolution of parliament condemning Motal Engil and blacklisting it never to get any government contracts. The EU remains uncomfortable meeting any further expenses beyond the Euros 47m originally committed meaning the GoU must find the additional Euros 108m which MPs want to be penalized on Motal Engil. Kasule says the UNRA management should face BoU-like inquiry for violating known factors governing prudent project designing. The project must be economically viable and be executed within reasonable time. “Altering the designs to such magnitude is illegal and not allowed under PPDA. Any variation shouldn’t exceed 25% of the original scope. The solution is you tender again for any excess work beyond 25%. This shows either corruption at UNRA or incompetence to understand simple things. You can’t change the scope of work without a limit because the breeds corruption and financial loss because contractor gets much more and supervision consultant [COWI] stays longer on the job and make more money,” says one of the elected leaders in the affected places along the 21km road. “If EU knew the cost would be Euros 175m [as opposed Euros 47m], project wouldn’t be undertaken because return on investment would be too low and the financial benefit is lost.” The same leader with vast knowledge in procurement and road construction added if the problem is poor design, UNRA should penalize the designing consultant (Mott McDonald) by cashing his Professional Indemnity. The same leader said “they always painted a picture that Dott Services was the very bad contractor yet there are others like Motal Engil who are the real problem.” Strangely, the UNRA management says that the urban project which is to last 7 years is still on course. This is something that has made MPs even angrier. Sebunya can’t rule out blocking further payment to Motal Engil regarding the Euros 108m.
THE ISABELL SAGA
One of the MPs we spoke to, said its high time UNRA ponders some other way out since Motal Engil’s financial situation won’t be improving soon. “They have always been blaming government for failing to sort out PAPs’ compensation issues for the project to go on yet in actual sense it’s them having financial problems. There is no way the already troubled Angolan First daughter can mobilize other shareholders to invest in the company. In any case once troubled, shareholders would only be taking away and the better UNRA comes to that realization and take some pragmatic steps to remedy the situation,” says the legislator.
TORORO-KAMDIN RD
The same MP adds that Motal Engil’s financial situation (that can only worsen) will also affect the 350km Tororo-Lira-Kamdin road project for which they were contracted at $215m. “It’s a politically very significant road project the very reason the H.E. [Museveni] will soon be answering to the voters why it has been delayed,” says the MP fearful the 350km road could become a big campaign issue in Bukedi and Lango sub regions. The Tororo-Kamdin funding is by World Bank which has previously complained of delayed implementation of projects by GoU. “How are we as NRM going to overcome all these political problems imposed on us by Motal Engil for whose shareholders its clearly not a priority to invest in the company anymore?” the fairly knowledgeable NRM MP rants. Besides Uganda, Motal Engil has leveraged on its powerful connections to win contracts in Malawi, South Africa and Zambia where previously contracted projects are equally suffering the Isabell financial cracking effect just like our own Kampala Northern Bypass which at Euros 175m has become more expensive than even CCCC’s Entebbe Express High way.
FAILING EBBE EXPRESS
Motal Engil’s Bypass ineptness is also already complicating the original plans the GoU had for Kampala-Entebbe Express Highway. Without the bypass being completed, the original objective for which the Express way was constructed won’t be realizable. The idea was to decongest traffic in the greater Kampala area whereby traffic from the Expressway would ease into the expanded bypass and vice versa. “All this is now a pipe dream because Motal Engil has failed to do the work to Busega to have the connection to the Entebbe Express way. The benefit for which the expressway was invested in can now not be realized and who is that one contractor to hold everybody at ransom?” MP Kasule furiously says.
He adds that because GoU had 15 years (2010-2025) within which to collect toll fees from motorists and repay the Chinese $476m loan (which hasn’t happened so far), the viability of the Expressway is now in total jeopardy. “We can’t pay back the loan on time because the toll fees can’t be levied on an incomplete Expressway without that part of Busega being functional as per the original plan. It simply means repayment will delay and the Chinese will charge much more for that delay. Why should the Ugandan taxpayers suffer so much because of one single contractor from Portugal?” Kasule wondered sounding unusually angry. He wants GoU to pass on the additional interest/money the Chinese will be claiming for delayed repayment onto Motal Engil because the resultant default in repaying the Chinese loan is an outcome of their (Engil) ineptness as contractors. UNRA casually says the contractor is very good because he has managed to cover 51% of the work so far and UNRA’s decision to defend Motal Engil is the reason why some MPs think there is some complicity to cheat government. For comments, call, text or whatsapp us on 0703164755.
