In April, a few weeks into a national lockdown, Uganda’s energy ministry received a highly anticipated letter. It had come from China’s Sinohydro corporation, the world’s 14th largest global contractor, which had undertaken, in 2013, to build Uganda’s Karuma dam, the country’s largest infrastructure project in five years.

The letter was in response to a visit government officials had paid to the dam in December. After the visit, the officials had complained of defects on the dam. The engineering word used was “non-conformities”.

The non-conformities referred to engineering defects that the dam suffered. They included poor laying of cables, corrosion of metal in the dam areas, rusting particles and poor filters.

Following the meeting, Uganda Electricity Generation Company Ltd (UEGCL) submitted a 413-page dossier of pictures and recommendations for the ‘’non-conformities’’ to be addressed.

The total bill to fix them was estimated at $10 million.

However, Sinohydro had indicated readiness to hand over the dam for commissioning in November, after which, Uganda would start to pay back its soft loan to China’s Exim Bank and start generating electricity. 

UEGCL wasn’t ready to receive the dam, in part because the transmission lines to evacuate the power from the dam had not been completed by UETCL and because the defects would “compromise operation and safety of the hydropower plant”. 

UEGCL insisted it would not receive the dam in the state it was in.

By May, the stand-off between UEGCL and the Chinese contractor had boiled over. In one report prepared for the president, seen by The EastAfrican, a team of experts noted that “the breakdown in communication and apparent animosity between the contractor and staff is detrimental to the timely implementation of the entire project”.

Karuma dam is the country’s most ambitious project to date, expected to generate some 600MW of power. It is also the most expensive project undertaken by Uganda to date at $1.7 billion.

The dam is expected to free up electricity for Uganda’s National Development Plan.

If the dam is not launched in November, the Ugandan taxpayer will either have to pay or the country will have to take a loan to keep the contractors on site.

LIABILITY PERIOD

In their letter to the ministry, Sinohydro acknowledges the defects and says they plan to resolve them within a Defects Liability Period, that is the time after the contract closure that the contractor remains on site and fixes any arising problems. It could last up to five years.

However, the Owners’ Engineer, an expert hired by the government to supervise the works, says the defects are of a “fundamental nature” and are not covered by the defects liability period. One example they cite is that instead of power cables the contractor used communication cables.

Experts under a joint technical committee have gone over the defects and recommended that the contractor “fixes them before handover”.

An August 13 memo from Ugandan President Yoweri Museveni instructs the Ministry of Energy to direct the contractor to fix the non-conformities before the dam can be commissioned. The president says fixing the defects before take over will safeguard government against design and construction works.