Chinese contractor China Civil Engineering Construction Corporation (CCECC) has formally withdrawn all the cases it had lodged against the awarding of a railway contract. The contract was to build the eastern branch of Uganda’s standard gauge railway network, which it lost to rival firm China Harbour and Engineering Corporation (CHEC).

In letter to the Deputy Registrar of the High Court’s Civil Division, CCECC’s lawyers Najib Mujuzi Advocates said they were withdrawing miscellaneous application 504 of 2014. The withdrawal, the letter said, was to pave the way for talks between their client and the government.

“Following discussions with the government of Uganda and as per their request, we hereby withdraw this case in order for us to enter negotiations for the western route of the Standard Gauge Railway Project,” the letter dated October 17, reads.

The western route will run from Kampala to Kasese and Mpondwe in western Uganda, with a spur from Bihanga to Mirama Hills in the south on the Rwanda-Uganda border

The abdication follows a meeting between CCECC’s representatives and President Yoweri Museveni on October 10, during which he gave them the choice to either take the western line or walk away with nothing and face expulsion of the company and its representatives from Uganda.

READ: Museveni launches SGR amid controversy over $8b contract

The development, which resolves one problem in the protracted procurement of a contractor for the project, comes at the end of 12 days of tussles over signing of railway contracts.

Last week, President Museveni launched the Ugandan portion of the railway alongside his Rwandan and South Sudan counterparts on the sidelines of an infrastructure summit.

The launch went on despite the absence of a signed contract between the contractor and the Ugandan government. There were questions over aspects of the contract Uganda had proposed to sign with CHEC. The contracts committee of the Ministry of Works refused to sign the contract, citing inconsistencies with procurement regulations.

On October 14, the Solicitor General also refused to approve the contract for signature, citing conflicting figures relating to the cost of the project; one set of figures quoted $6.7 billion while another figure indicated $9.7 billion.

According to the Solicitor General, the contract sum also excluded a $1.2 billion tax bill, which should have formed part of the total price quoted. The SG also took issue with the performance bond set at 2.5 per cent of the project price, advising that considering the colossal sums involved, this should be set at 10 per cent. There were also documents and agreements alluded to in the contract, but they were not attached.

“Please address the above concerns before we can substantively address your request to clear the said contract,” the SG said.
Junior Works Minister and chair of the regional SGR Steering Committee John Byabagambi was not available to explain how these issues were being addressed.

According to previous statements, the region intends to have the SGR operational by March 2018, leaving a tight timetable for countries such as Uganda, on which the Rwandan and South Sudan sections depend, to meet its part of the bargain.