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Karuma, Isimba contractors seek new completion dates

Sunday August 26 2018
karuma

A view of the 600 megawatts Karuma Hydroelectric Power project. A government audit found structural defects in the dam’s tunnels and replaced the engineers. FILE PHOTO | MORGAN MBABAZI | NATION

By JULIUS BARIGABA

Uganda’s flagship hydropower projects will not come on line this year as scheduled as it emerges that the contractors have requested an extension of time to complete the works at both Karuma and Isimba dams.

They have cited hitches in design and engineering as well as factors beyond their control.

The immediate implication of these delays is that Kampala now faces a mini debt-servicing crisis as the five-year grace period for repayment of loans used for construction of the two dams ends before they are commissioned and supplying electricity to the national grid.

In 2015, Uganda borrowed $1.43 billion and $483 million from China Exim Bank to fund the construction of Karuma and Isimba respectively and construction started.

As the construction of the dams was initially set for completion between August and December 2018, Uganda was supposed to start repaying the loans over a 20-year period, thereafter using money raised from power tariffs.

Electricity consumers will also continue to suffer high end-user tariffs, currently ranging between 8.3 and 9 US cents per kWh for power generated from Bujagali, even though this represents a drop from about 11 US cents after debt refinancing for the plant mid this year.

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Addressing high tariffs

The high Bujagali tariff was supposed to be softened by capacity from Karuma and Isimba, which are expected to come in at lower tariffs of average 4.97 and 4.16 US cents respectively.

The EastAfrican has learnt that in June this year, the engineering, procurement and construction contractor, China International Water and Electric Corporation (CWE), for the 183MW capacity Isimba submitted a request for extension of time to the Minister of Energy and Mineral Development.

CWE cited the reasons for failing to deliver the project on time as “delays in engineering/design of embankment dams” as well as adverse “weather experienced in the last quarter, which has had an effect on progress”.

But it turns out that the 600MW Karuma — Uganda’s biggest power project to date — will also overshoot its construction period by several months after its contractor Sinohydro Corporation, too sought a new schedule to effect delivery.

Junior Energy Minister Simon Dujanga said the government is reviewing the contractor request for more time and admits an extension will spill over into the debt repayment period.

“We will look for money and pay them. Sometimes in project management, you cannot avoid these delays. What is important is that they are for a good reason,” Mr Dujanga said.

The Ministry of Energy, the Project Steering Committee, the Uganda Electricity Generation Company Ltd, the Solicitor General and the Owners’ Engineer on site are reviewing the contractors' extension of time requests.

Quality issues

“Sinohydro Corporation has also lodged a request for extension of time. This too is under review by the same bodies reviewing the Isimba extension,” said Simon Kasyate, UEGCL corporate affairs manager.

It is not clear whether the new completion schedules as requested by CWE and Sinohydro will be approved, but what is clear is that both projects will miss their delivery timelines.

From the outset, quality issues at the underground Karuma dam have been a cause for worry after cracks appeared in the tunnels — a result of poor concrete mix, poor design of the tunnel and its lining as well as sloppy workmanship that did not conform to the dam design template, thereby compromising the structural integrity of the project.

Also of concern was general laxity in supervision by the government’s consultant on site — referred to as Owners Engineer — the Indian firm Energy Infratech Pvt Ltd — both at Karuma and Isimba.

In January, the government of Uganda fired Infratech from the Isimba site and hired Artellia EAU & Environment to work alongside local firm KKATT Consult Ltd as Isimba too had developed issues. Cracks had caused leakage, leading to flooding in the powerhouse and destroying the coffer dam.

100-year lifespan

In a special audit of the project, Auditor General John Muwanga noted that Infratech lacked the capacity and experience to supervise the Isimba works, which resulted in “poor concrete quality on site, cracking, cold joints, honey-combing and failed concrete repairs,” which could lead to high maintenance costs for the project in future.

Even as Karuma is currently past the 85 per cent mark in general physical progress in as far as the generation component is concerned, according to UEGCL officials, it cannot beat the December 2018 completion deadline.

To remedy the quality assurance issues, the UEGCL board — the government agency that is mandated with the supervision of construction works as well as generation of electricity — ordered the contractor to undertake corrective works at Karuma.

“Stoppage of works to address some quality assurance issues in 2017 partly explains why this project has been delayed. However, we are confident that what has been done so far meets the agreed technical specifications,” Mr Kasyate said.

The projected lifespan of Karuma is 100 years, but engineering experts warn that unless the contractor adheres to all quality assurance parameters, the dam may not last that long.

On the other hand, construction of Isimba commenced in April 2015, with the contractor CWE tasked to deliver the power dam in 40 calendar months, meaning it was due for commissioning this month.

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