SGR railway project runs into more trouble

SGR: Chinese contractor faces boot as Kutesa camp returns

Kampala, Uganda | HAGGAI MATSIKO | President Yoweri Museveni is renegotiating the Standard Gauge Railway (SGR) contract – again. And the negotiations are not going his way, meaning that once again the project is likely to be delayed even more.

The Independent has learnt that Museveni is once again negotiating directly with the contractor; China Harbour Engineering Company (CHEC), after he fired the previous head of the SGR project, Kasingye Kyamugambi.

Kyamugambi’s crime, according to sources, is that he defended the $ 1.95 billion price CHEC has quoted for the 273km line between Kampala and Malaba that Museveni does not like.

Some insiders claim that Kyamugambi’s firing is the climax of intense lobbying by a competing firm—Yapi Merkezi Insaat VE Sanayi—which secured a similar contract in Tanzania and has managed to win the support of some within the walls of his office, aides at State House and officials at the Works Ministry.

The main objective appears to get CHEC’s contract cancelled. Given that Kyamugambi was opposed to this, he became a target of the anti-CHEC campaign.

Trouble for Kyamugambi is that some of his staff who appeared to support CHEC’s competitor are more influential at State House. One of these is Miriam Kankunda, a former Senior Private Secretary, who was now working as Kyamugambi’s assistant in charge of Finance.

This is the same Kankunda whom, when Joy Kabatsi, the former Head of Legal department at State House was fired in 2012, said “was busy moving around with papers reporting to the President, mentioning my name”. Kabatsi said Kankunda is the one who got her in trouble.

“She has always wanted me out and I can assure you this brings in the Sembabule politics. She is a Hon. Sam Kutesa lady. He has people he has sponsored to really harass me in State House and my work here has not been easy,” Kabatsi was quoted in Daily Monitor interview in 2012.

Kutesa’s close associates are once again being mentioned among those who want CHEC out and the Turkish Yapi in.

It will be recalled that Kutesa’s son-in-law, Albert Muganga was behind another company; China Civil Engineering Construction Corporation (CCECC), which lost the SGR deal to CHEC. The losers even took the government to court but later apologised to President Museveni. But they never rested.

Some insiders are basing on this to conclude that powerful forces were against Kyamugambi.  They say powerful forces have blocked documents supporting the CHEC case from reaching Museveni and created fake emails in Kyamugambi’s name and sent them out to potential suppliers showing that he was soliciting bribes. The SGR office was forced to run adverts noting that this was a fake email.

But their main plot has been a campaign mounted to show that the CHEC contract was inflated.

All this while, some officials at the Works Ministry, aides at State House and even some staff at SGR have been reporting to Museveni that Kyamugambi is a stumbling block to the SGR.

Inflated costs? 

The Independent has learnt that in an attempt to get on top of the situation, Museveni on February 15 wrote to the Minister of Works and Transport, Monica Azuba, noting that after enquiring from multiple technical sources, he had found several possible weaknesses in the current SGR plan and concept.

He directed her to form a committee to investigate it and involve Dr. Badru Kiggundu; the engineer who previously headed the Electoral Commission, and later investigated construction anomalies at Karuma and Isimba dams, to investigate the deal.

The Kiggundu’s committee issued a damning report in May, which appears to have sealed Kyamugambi’s fate. According to Kigundu, CHEC tender is inflated by over $600 million.

Following this report, Museveni at a State House meeting ordered that Kyamugambi is fired and replaced with Perez Wamburu, who has been the chief civil engineer in the Ministry of works.

Interestingly, Wamburu was part of another team, which Azuba had set up earlier on Museveni’s orders on the same issue. Wamburu and team had travelled to Kenya investigated and concluded that the CHEC contract was okay.

The team was led by Prof Edward Rugumayo and included former Uganda Railways Corporation managing director Daudi Murungi, Makerere University’s engineering don, Umar Bagambadde.

The committee noted that it would be technically erroneous to compare Uganda and Tanzania’s SGR because while Uganda’s railway is based on Chinese specifications, Tanzania’s is based on Arema standards, which is American.

“We note that the total costs given by CHEC are within the cost estimates provided by JB Gaulf for the Kampala-Malaba line,” the experts noted, “These costs also include provisions for locomotives, rolling stocks and the Kampala URC station complex and the Tororo railway training school.”

Kyamugambi’s camp says it is not clear whether President Museveni saw this report. Apart from the report, Prof. Rugumayo’s team had also prepared a memo for cabinet but every time it was to be presented it would allegedly not appear on the agenda. The Rugumayo report that was availed was also allegedly heavily edited.

According to Kyamugambi’s camp, the clearest sign that Museveni had not been presented with the original paper is that he set up another committee to do the same job. But others say it is not unusual for Museveni to do that.