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Muhakanizi, Isabalija ‘fight’ sparks Shs 30bn UEGCL audit

Former Energy PS Kabagambe Kaliisa

But as insiders wait for the audit, they say the bad blood between the two officials is not good for government. These insiders point to how another ferocious battle between UEGCL and the Energy Ministry, which Muhakanizi was also involved in, affected the projects.

Muhakanizi and Isabalija are currently seen as the most influential technocrats driving President Yoweri Museveni’s most coveted infrastructure projects.

While Muhakanizi controls the government purse, Isabalija, while still UEGCL board chairman, earned the President’s ear by exposing the shoddy work that threatened Karuma and Isimba dam projects.

In the previous fight, both Muhakanizi and Isabalija appeared to be on the same side fighting then Permanent Secretary, Kaliisa and the Energy Ministry establishment, which was being blamed for poor implementation of the projects.

At the heart of this crisis, were revelations that poor supervision had left the Chinese and Indian (Energy Infractech supervises the main contractor, Synohydro) contractors to do shoddy works.

The fighting had also meant duplication of roles with the Energy Ministry hiring technicians to do works that were a responsibility of UEGCL. It emerged that partly as a result of this mess;the government would have to cough an extra Shs 1.8 trillion for the projects.

The government had indicated that Karuma and Isimba would cost about Shs. 7.5 trillion– $ 1.7 billion (about 6 trillion) for the 600MW Karuma and $ 567 million (1.8 trillion) for the 183 MW Isimba dam.

For both of them, 85 percent financing is from the China Exim Bank and 15 percent was advanced by government to the contractors—Synohydro for Karuma and China International Water and Electric for Isimba.

However, an investigation by The Independent shows that government is likely to add an extra Shs. 1.8 trillion bringing the total cost of the two dams to 9.2 trillion. As already shown, Shs. 1.8 trillion can finance another 185MW dam.

Some of these revelations were contained in a high level independent audit of the two power infrastructural projects by Dr Kamal Gautam of ILF Consulting Engineers. Published on June 12, 2015, the audit raises quite a number of lapses that the auditor warns, stand to impair the project if not avoided.

When he received the audit on June 22, 2015, Muhakanizi, the Secretary to the Treasury was not very happy. He wrote to PS Kaliisa notifying him about concerns in the audit. Among these were ineffective leadership in the implementing process of the projects, inexistence of competent and experienced personnel working with Energy Infratech and the fact that the contractor was working without approved drawings and work methodology.

He warned; “this ministry will not provide operational resources for the projects for the FY 2015/2016 unless the above issues have been addressed and detailed work plans for the projects have been submitted.”

This warning speaks volumes about Muhakanizi’s powers. Isabalija has also proved that he is equally powerful. So, a battle between the two could be a fight between two elephants and the projects would be the proverbial grass that suffers.

However, other insiders say that President Museveni has since put mitigating forces that would prevent such a situation. One such force is the Project Steering Committee (PSC), which President Museveni appointed to oversee the project.

Former Electoral Commission boss, Badru Kiggundu chairs the committee and he is deputised by John Berry, the former General Manager, Bujagali Electricity Limited. The other members of the committee include the Permanent Secretaries of the Finance and Energy Ministries and the heads of UEGCL and UETCL; and the Solicitor General.

President Museveni charged the committee with an immediate task of solving most of the pending technical and contractual challenges on the projects.

Still, some insiders insist that inter-agency fights always have a way of hurting government projects. For now, everybody seems to be waiting for the findings of the AG.


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