Rwanda has contracted Turkish engineering firm Summa to complete construction of the multimillion dollar Kigali Convention Centre, effectively kicking out the Chinese company that was working on the project, which has been delayed for more than four years.
The EastAfrican has learnt that the government has terminated the contract of the state-owned Beijing Construction Engineering Group (BCEG), which was awarded the contract in 2009.
Summa, a family controlled group from Istanbul, has been tasked to complete the KCC in the first quarter of 2016. The $300 million conference centre comprises a five-star hotel with 292 rooms, an information technology office park and a conference hall that can host 2,600 people.
When The EastAfrican visited the site this week, no work was going on and the Chinese company’s equipment was being loaded into containers. Its administration office was closed.
“I was not happy with the progress: We expected to have it in 2012…. There were problems. The target now is have it complete in the first quarter of 2016,” said Minister of Infrastructure James Musoni.
Construction started in 2009 and the centre was expected to be complete by 2012. But lack of funds delayed its completion due to, among other things, reluctance of private investors to finance it, saying it was too ambitious.
This forced the government, which is a major shareholder in the project — with a 50 per cent stake — to take lead the way in mobilising resources. Of the $400 million raised through the Eurobond, $120 million was to be used to repay an outstanding loan taken to finance the project.
The EastAfrican has learnt that now, the government faces the dilemma of negotiating with the Chinese company to avoid litigation. While the details have not been made public, the Rwandan government is quietly negotiating with China to resolve the standoff without jeopardising relations between the two countries.
The EastAfrican has learnt that the Foreign Minister Louise Mushikiwabo and her Infrastructure counterpart will travel to Beijing next week.
On Friday, the Chinese embassy in Kigali said it will continue encouraging Chinese companies to invest in Rwanda and contribute to its economic development.
“BCEG and the Rwandan side are currently undertaking friendly negotiations to resolve the problems arising from their co-operation in the Kigali Convention Centre project. It’s a commercial issue and will not affect the cordial relations between China and Rwanda,” said a statement from the embassy.
BCEG’s problems started with the search for approval of design changes with the original designers of the project, who are based in Germany. The original design was done by Spacial Solutions, but the Chinese firm adjusted it.
Under the contract, the Chinese firm had to seek approval at every stage of the construction from Spacial.
Recently, there have been concerns about the quality of the work.
According to sources within Axiome Swiss International, an engineering company that is auditing the project, the water pipes and metal bars are substandard.
“Water pipes are damaged to the extent of not being usable, but the contractors had gone ahead to use them and concealed the damage with polythene bags,” the source said.
The Chinese company declined to comment on the issue.
By Berna Namata, Esiara Kabona and Alex Ngarambe