Railway officials take 750Bn in bribes

Angry Museveni renegotiates contract, gets bribes list

Kampala, Uganda | HAGGAI MATSIKO | President Yoweri Museveni has been told, according to insiders, a Chinese contractor paid officials and commission agents a whooping $ 200 million (approx.750bn) in order to secure a contract to construct the Standard Gauge Railway (SGR).

Insiders say the contractor in question, China Harbour Engineering Company (CHEC), has made these revelations to President Museveni and even provided a list of officials to whom the payments were made, well-placed sources have told The Independent.

Insiders say Museveni is now finally ready for CHEC to go on with the SGR project and a deal was expected to be signed at the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, in September. This green light is expected to unlock funds from China’s Exim Bank for construction to start.

The Standard Gauge Railway deal worth about $2 billion has since 2012 pitted several Ugandan officials and Chinese companies against each other, and attracted court cases and multiple investigations.

In the past the jostling resolved around which of the competing Chinese firms would bag the deal because, although the government had entered an agreement over the deal with China Civil Engineering Construction Corporation (CCECC), Museveni offered the deal to CHEC.

The President’s latest intervention was partly driven by a report on the SGR contractor procurement by a committee led by Badru Kiggundu, the engineer who previously headed the Electoral Commission. Kiggundu’s committee report which was handed to Museveni in May indicates that the SGR Engineering, Procurement, and Construction (EPC) contract with CHEC is inflated by over $600m.

Armed with this information, Museveni set about getting the Chinese to reduce the contract price. Well-placed sources say the president held several meetings with CHEC officials at his country home in Rwakitura, others at State House Entebbe, and others at State House Nakasero.

To unlock the gridlock, the Chinese also brought in top diplomats from China and in Uganda. In June, for instance, a top leader of the ruling Communist Party of China (CPC), Wang Yang, visited Kampala and engaged the president on SGR matter.

The Chinese Ambassador to Uganda, Zheng Zhuqiang, has also severally engaged President Museveni. Despite these efforts and more, Museveni maintained his stance. Even when the Chinese offered to reduce the price by some $ 50 million at a June 21 meeting, the President still declined and pressed the officials for more.

Chinese confess

The Chinese were later informed that President Museveni was considering cancelling the contract if they did not reduce the price. That is when, in the final two definitive meetings, the Chinese officials told Museveni that part of the reason they could not reduce the contract price was because they had already paid hefty commissions to the tune of $ 200 million.

The President immediately demanded to know to whom this money had been paid to. With stakes so high, insiders say, the Chinese offered to reduce by $ 120 million and provided a list of names they had paid the $ 200 million. Having learnt of the hefty bribes CHEC had paid to Uganda officials, President Museveni on Aug.16, advised Chinese officials never to pay bribes.

“On corruption, I urge investors especially you the Chinese, to report to your ambassador any Ugandan government official asking for bribes. The ambassador will report to me and people will go to jail,” the president said in a Tweet.

The president was that day officiating at the 2nd Uganda-China Economic Investment and Trade Co-operation Forum at Hotel Africana in Kampala. Insiders say the President has also blacklisted several individuals he has previously relied on during the process to procure the SGR contractor.