By Mulengera Reporters
In the year 2022, the government of Uganda received funding from Islamic Development Bank in Riyadh. Quite understandably, it was required that the construction firm to do the more than 105kms road in the Kyenjojo-Kamwenge sub region had to be from a country that is a member of the Organisation of Islamic Conference (OIC).
It goes without saying that the successful firm had to come from either Egypt or Turkey because these two countries are home to OIC’s most experienced and capable road construction firms. A total of 10 firms bidded for the job and all them were from Egypt and Turkey. These included UCA Insaat which partnered with Lankaran Yol Tinkinti OJSC. Others were Samco National Construction Company, United Gulf Construction Company WLL and Gocay Insaat Taahhut ve Ticaret Anonim Sirketi.
There were several others like Dott Services Ltd which teamed up with Sadeem Al Kuwait General Trading & Contracting Company; Arab Contractors (Osman Ahmed Osman & Co) from Egypt; Maleka Engineering & Contracting Company which teamed up with Teskon Muhendislik Ltd STI; Gulsan Insaat Sanayi Turizm Nakliyat Ve Ticaret AS; Samco National Construction Company; Batco Badawi Azour Trading & Contracting SAL; United Gulf Construction Company WLL and Gocay Insaat Taahhut ve Ticaret Anonim Sirketi which teamed up with Arastirma Ticaret Ltd Sirketi.
It was a do or die for the bidders as their commission agents based in Kampala have come to rightly conclude that donor-funded road projects are the only ones which are lucrative and from which one can eat something. This is so because GoU-funded road projects are no longer viable because of the financial squeeze the Museveni government is currently grappling with.
In fact, most of the GoU-funded road projects are currently stalled after Kampala failed to make prompt payments and in the process causing the total outstanding road construction-related bill (due to private sector firms) to accumulate to Shs1.3trn as was recently established by Parliament.
So from as early as mid-2022, when the process started, the Kyenjojo-Kamwenge procurement got into problems as commission agents or tender-prenuers worked day and night to ensure that their preferred Turkish or Egyptian road construction firm got the deal. There was a lot of nervousness as bidders’ representatives lobbied; sometimes going as far as running to the President yet there was always going to be one winner.
Complaints relating to administrative reviews were filed with the relevant GoU entity and the same was escalated to IGG, PPDA and sometimes IDB headquarters in Riyadh. The IGG kept away and kept passing on every petition to PPDA; citing want of jurisdiction to competently inquire into complaints of that nature.
At the end of the day, PPDA received plenty of time-consuming complaints from aggrieved bidders. And gratefully, the Authority was able to quickly inquire into them and having the same concluded in record time. The Lankaran Yol Tinkinti OJSC-UCA Insaat Joint Venture was among those that complained.
But their complaint was disregarded and thrown out by PPDA on grounds that it lacked merit. They were locked out for failing to get a local bank or financial institution to validate their Shs5bn bid security which had been issued for them by Mugan Bank based in Azerbaijan. Another complaint, with potential to delay what President Museveni considers an urgent road project on the eve of 2026 elections, came from Samco National Construction Company but which too was disallowed and dismissed by PPDA for lack of merit.
Another complaint came from United Gulf Construction Company Ltd W.L.L besides the one from Gocay Insaat Taahhut ve Ticaret Anonim Sirketi and Arastirma Ticaret Ltd Sirketi. But, gratefully, these too were urgently concluded by PPDA upon investigations.
When the PPDA disregarded them, some of these unsuccessful bidders and bad losers, chiefly instigated by their Kampala-based commission agents and lawyers, tried lodging their concerns with the IDB headquarters in Riyadh directly. But available information shows that the funder realised these were merely delaying tactics being employed by frustrated commission agents and a decision was taken to totally overlook such.
Consequently, the IDB Secretariat has written to Kampala directing the GoU to urgently proceed signing off and awarding the deal and signing the contract with Arab Contractors which emerged the best evaluated bidder for the job. This decision was arrived at after IDB Secretariat sent its best procurement auditors and investigators to Kampala to look into each and every allegation against the Egypt firm against which no blemish could be sustainably established.
To the excitement of leaders in both government and NRM party, who would have to struggle explaining to voters in that part of the country why the President’s campaign promise of 2011 remained unfulfilled almost 15 years later, a letter of no objection was on 20th November this very year communicated to the GoU by IDB, the funder of the Kyenjojo-Kamwenge road project.
Signed by IDB Africa Regional Hub Manager Dr. Issahaq Umar Iddrisu, the one page letter requires that Arab Contractors immediately begins work on the 105kms road project whose delivery will impact commerce and tourism in that part of the country. The IDB expresses readiness to pass on to Arab Contractors up to Shs463,789,895,154 being the total contract sum (VAT inclusive).
This letter of no objection, which the GoU has already received, simply means that all those Kampala commission agents who were menacingly looking at the Kyenjojo-Kamwenge road deal have to let go and focus their efforts and energies elsewhere. It simply puts all the related disputes to rest as millions of Ugandans in that part of the country begin counting down to a game-changing road infrastructure being delivered for their enjoyment and benefit.
Sebamala’s company offered to do the job at Ugx448,847,755,469.26 (VAT inclusive). But their bid didn’t go beyond the preliminary evaluation stage because their bid security was found to be incurably defective. There was a requirement for all bidders to have a bank guarantee or bid security which would placate the government of Uganda against non compliance with the contract performance conditions.
In case a bidder gets awarded the contract and doesn’t deliver as expected, the government of Uganda falls back on that bank guarantee to indemnify itself. In his case, Sebamala’s JV company submitted a performance guarantee that was issued by Mugan Bank based in Azerbaijan. The government of Uganda bidding document required that that a bidder must have a partner or corresponding local financial institution or bank based in Uganda.
This was important for enforceability of the obligations that come under the performance guarantee or bid security in case of breach by the successful bidder. The bid security would amount to just Ugx5bn and Sebamala’s failure to involve a local bank or financial institution led to his JV company’s bid being rejected as unsuccessful. This was considered to be a material deviation from the bid requirements and led to Sebamala’s company being unsuccessful.
After that failure to succeed was communicated, a pro-Sebamala complaint was lodged by a whistle blower with the IGG accusing the concerned GoU officials of favoring Arab Contractors from Egypt.
The IGG, citing lack of jurisdiction, passed the complaint on to PPDA which inquired into the complaint fully. In their report, PPDA investigators disregarded the pro-Sebamala complaint on grounds that it lacked merit.
The PPDA report indicated that failure to submit an effective bid security made Sebamala company’s bid submission unresponsive and therefore inadmissible. That failure to have a local bank authenticating their bid security made the Sebamala JV company’s bid submission materially defective and therefore inadmissible.
“The failure to have a correspondent financial institution located in Uganda rendered the bid non-compliant with ITB 19.3 and placed the Entity/GoU at a risk of failure to cash the bid security in the event that the bidder failed to meet any of the conditions indicated in Clause 19 of the Instructions to Bidders. Consequently, the omission was correctly found to be material in nature and the bidder was correctly eliminated during the evaluation of bids in accordance with Clause 19.4 of the Instructions to Bidders. In light of the above, the Authority [PPDA] found no merit in the grounds raised.”
This is how the PPDA auditors, who closely worked with the IGG, put the final nail in Richard Sebamala’s money-making coffin regarding the lucrative Kyenjojo/Kihura-Bwizi-
