A dispute between three Chinese civil contractors over an agreement to build a 1,500 kilometre standard gauge railway network in Uganda is headed for President Museveni after efforts to reconcile the feuding parties failed.

The EastAfrican has learnt that the head of state is set to convene a meeting with China Communication Construction Company, China Harbour Engineering Corporation and the China Civil Engineering Construction Corporation in the next few weeks.

President Museveni’s intervention follows an August 20 meeting between a government rail sector working group, the Chinese companies and the commercial consul of the Chinese embassy in Kampala that gave the companies up to September 10 to form a single consortium and agree on a work-share plan.

Each of the companies was represented by three delegates, with Justin Jing representing the Chinese embassy and former assistant US trade representative for Africa now turned lobbyist, Rosa Whitaker standing in as a friend of Uganda.

A messy affair

In proposing a consortium, Uganda is trying to untangle a mess created by different arms of government signing parallel MoUs with the Chinese companies exposing the country not only to potential litigation but lengthy delays in procurement of contractors for the project.

The meeting, which was chaired by the Minister of State for Works John Byabagambi, told the companies that the Ministry of Defence would be the lead agency in implementing the country’s railway projects.

While the firms met later under the stewardship of the Chinese embassy in Uganda, it is understood that they failed to reach an agreement. The first point of departure was the proposal for a three-way split between the three contractors.

According to sources privy to the talks, that proposal was contested by the China Civil Engineering Construction Corporation, which argued that it would give undue advantage to its competitors since they were both subsidiaries of the same parent company.

Apparently, China Civil Engineering Construction Corporation also feels entitled to a better deal because according to the minutes of the August 20 meeting, the contractor’s MoU, signed with the Ministry of Works in January 2012, is still valid.

The Kampala-Tororo-Gulu-Pakwach segment was assigned to China Harbour Engineering Corporation; Kampala-Kasese-Mpondwe to China Civil Engineering Construction Corporation and the Bihanga-Mirama Hills-Kigali line to China Communication Construction Company.

The 720-kilometre Kampala-Tororo-Gulu-Pakwach segment is becoming contentious because China Civil Engineering Construction Corporation has a current MoU with the ministry while China Communication Construction Company has an expired one.

An amicable and speedy solution is needed so that the government can begin sourcing funding.