THE REPUBLIC OF UGANDA
OFFICE OF THE AUDITOR GENERAL
IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS
UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED
VALUE FOR MONEY AUDIT REPORT MARCH 2015 OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA
OFFICE OF THE AUDITOR GENERAL
IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS
UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED – (UETCL)
VALUE FOR MONEY AUDIT REPORT MARCH 2015 AUDITOR GENERAL’S MESSAGE AUDITOR GENERAL’S MESSAGE
31st March 2015
The Rt. Hon. Speaker of Parliament Parliament of Uganda Kampala
REPORT OF THE AUDITOR GENERAL ON IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED
In accordance with Article 163 (3) of the Constitution, I hereby submit my report on the audit undertaken on Implementation of Transmission Line Infrastructure Projects by Uganda Electricity Transmission Company Limited. My office intends to carry out a follow – up at an appropriate time regarding actions taken in relation to the recommendations in this report. I would like to thank my staff who undertook this audit and the staff of Uganda Electricity Transmission Company Limited for the assistance offered to my staff during the period of the audit.
John F. S. Muwanga AUDITOR GENERAL VALUE FOR MONEY AUDIT REPORT TABLE OFCONTENTS INTRODUCTION. CHAPTER ONE. EXECUTIVE SUMMARY. CHAPTER TWO. CHAPTER THREE. CHAPTER FOUR. Appendix II:Documentsreviewed. Appendix I:Organization Structure ofUETCL.. Appendix IV:DelaybyCGV to approve valuations submitted byUETCL. Appendix III:Interviews conducted . GLOSSARY OFTERMS. MARCH 2015 1.1. BACKGROUND. 1.2. 1.3. 1.4 2.0 1.5 3.0 2.1 2.2 3.1 4.0 3.2 4.2 4.1 4.3 4.4 4.5 MOTIVATION. DESCRIPTION OFTHEAUDITAREA. AUDITOBJECTIVES. AUDITMETHODOLOGY. SCOPE. SYSTEM ANDPROCESS DESCRIPTION. SAMPLING. DATA COLLECTION METHODS. ROLESANDRESPONSIBILITIESOFKEYPLAYERS. FINDINGS, CONCLUSIONS ANDRECOMMENDATIONS . PROCESS DESCRIPTION. ASSESSMENT OFWORKS EXECUTED. PROGRESS OFWORKS. SUPERVISIONANDMONITORING OFPROJECT WORKS. RESETTLEMENT OFPROJECT AFFECTED PERSONS. WAY LEAVES INFORMATION SYSTEM (WIS). COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS ...... 12 13 12 15 15 21 23 25 27 11 14 30 29 31 34 33 iii 2 2 3 7 7 9 9 9 1 1 9 Picture 1: Figure 1: LIST OFFIGURES Table 10 Table 9: Table 8: Table 7: Table 6: Table 5: Table 4: Table 3: Table 2: Table 1: LIST OFTABLES, FIGURESANDPICTURES Demolitions atMbarara Northsubstation. Project initiation,implementation andmaintenance process. Progress ofcontract signedbetween M/sLambaandUETCL for Comparison ofquantitiesexecuted against works certified. Comparison oftower spansagainst provided tower schedules. RAP fundsrelease byMEMDto UETCL. Donor andGoUdisbursements. Execution ofRAPimplementation. Proportions ofPAPs sofar paidand%ageacquired. Planned execution periodandprogress /status ofimplementation. Funding ofUETCL projects underimplementation . Project Objectives. construction ofresettlement housesunderRAP...... IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS ...... BY UGANDA ELECTRICITY TRANSMISSION ...... COMPANY LIMITED –(UETCL) ...... MARCH 2015 22-23 17-18 15-16 24 26 22 20 13 19 18 4 6
i VALUE FOR MONEY AUDIT REPORT ii VALUE FOR MONEY AUDIT REPORT LIST OFACRONYMS ANDABBREVIATIONS UETCL ROW RAP PID PAPs NFA NEMA NELSAP JBIC GoU EPC CGV AP AfDF AFD MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS Uganda Electricity Transmission CompanyLimited Right ofWay Resettlement Action Plan Project Implementation Department Project Affected Persons National Forest Authority National Environment ManagementAuthority Nile Equatorial Lakes SubsidiaryActionPlan Japanese Bankfor International Cooperation Government ofUganda Engineering Procurement andConstruction Chief Government Valuer Angle Point Africa Development Fund French Development Agency the construction works. For example by the time of audit, the consultant for NELSAP had consultancythe contract evenamount where there progressminimal or no either was of From areview oftheconsultants’ contracts andfieldinspections, itwasobserved that: line projects transmission ofNELSAP&Mbarara/Nkenda &Tororo-Lira. two of construction the of supervision and for management consultants project with the 3,959,238 Euros of tune the to contracts two into entered UETCL Supervision andmonitoring with theagreed designsandspecifications for thefive (5) contracts. works mechanical so far and undertaken by electricalMarch 2015 civil, that the works the were of generally done assessment in accordancetechnical a from established was It Assessment ofworks executed Tororo/Lira transmission lineprojects. of funds and an idle substation (Fort Portal) upon completion under the Mbarara –Nkenda/ The delays will also lead to cost overruns due to contract time extensions, low absorption for unevacuated power (deemed energy) over the period from December 2012 to July 2014. (generating less power than installed capacity) which cost UETCL USD resulta As Kabalegadelays, the of hydro mini 3m poweroperatingidle was at plant capacity as compensation RAP fundsandexpiry ofconsultancy contracts. of diversion persons, affected project of compensation actual and studies feasibility the by caused were conductingbetweenof Way),time of long(Right lapse the land of acquisition delays in delays The overruns. resource to lead will which and months, (8) (11) eight eleven between ranging periods, contract of already extensions had for requests contractors submitted (EPC) Construction and Procurement years Engineering, (7) seven All later.almost commenced yet not 2008, in start to scheduled line, Nkenda – The implementation of all the three projects was behind schedule, with the Mputa/Hoima Progress ofworks KEY FINDINGS Mputa/Hoima-Fort-Portal-Nkenda projects, implemented byUETCL. and Mbarara-Nkenda/Tororo-Lira (NELSAP), Plan Action to assessthe Subsidiary audit Lakes Equatorial money for value a undertook progress of implementation of General three power transmission lines construction Auditor projects: Nile the of Office The demand. energy in growth with cope to infrastructureto grid transmission voltage high (UETCL) the manage Limited Company Transmission Electricity Uganda established Uganda of Government The consumers. by use eventual for grid national the to plants generation Transmission lines provide infrastructure that is used to evacuate high voltage power from EXECUTIVE SUMMARY The design of the contract created a possibility of the consultant being paid up to 60% of 60% tocontract up the consultantpaid of createdthe being design of possibility The a IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
iii VALUE FOR MONEY AUDIT REPORT iv VALUE FOR MONEY AUDIT REPORT processing ofRAPcompensations. not rolled out to all projects. The failure to operationalize WIS could not guarantee timely processingfacilitatePAP was would of files, it that Way(WIS) leavesSystemInformation and timely execution of the project works. Whereas interventions were made to acquire a quality on impact to likely also are works of monitoring and supervision in Weaknesses studies and actual compensationfeasibility of project affected persons and diversion of RAP funds. the of conducting between time of lapse long way,the of right of acquisition delayed by caused was This objectives.project the of attainmenttimely the on impacted agreed designs and specifications, the progress of the projects was behind schedule which Whereas the civil, electrical and mechanical works were generally in accordance with the Overall auditconclusion RECOMMENDATIONS 67,146 to make improvements onthesystem. needs assessment. This prompted comprehensiveengagement of additional a consultancy undertakeservices at to USD failure of because projects other for data RAP required the and all capture not developcould but Project Interconnection Bujagali design, under (RAP) Plan to Action 658,031 Resettlement for USD piloted was system The spent System. Information leaves Way a UETCLimplement corridors, line transmission to Toretrievalstorageaddressand documentation,challenge information relating of the of Way leaves Information System overload whichmaycompromise qualityofsupervisionandreporting. the monitoring function. Not only does this breed conflict performed of interest but it could lead to work also management contract in involved persons same the that implying Due to staff constraints, members of the monitoring unit also doubled as project managers renew thecontract, UETCL stands ariskoflosing thepaymentsmadeupfront. 16% and15%for LotsA,BandCrespectively. been paid 60% of the contract price yet the progress of construction was reported as 34%, Additionally,to not consultantopts consultantwhereexpirescontractthe the period and MARCH 2015 iv. iii. ii. i. the expected functionalityoftheWay leaves Information System. realisationof full ensurethe providerserviceto properly the also supervise and undertaken is assessment needs comprehensive a that ensure should UETCL the with cope to increasing strengthened numberofprojects andinvestments being undertaken byUETCL. be should unit monitoring the of capacity The consultancy to construction works line Transmission the consultants’ inputs. This would also enable UETCL match consultancy payments that ensure should contracts UETCL future, In before done is land of acquisition engagement ofcontractors. the that ensure to undertaken be should compensationaddressed.future,involvingand properIn disputesplanning land challenges the have to governmentslocaldistrict and ValuerGovernment(CGV) to the corridor. This will require engaging Project Affected Persons (PAPs), Chief The acquisition of right of way should be expedited to allow the contractors access COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS r bt lm sm n tm-ae t efciey monitor effectively to time-based and sum lump both are 1 CHAPTER ONE DIT REPOR T U A
Y E N O M
R O F UE L A V
IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION MARCH 2015 1 COMPANY LIMITED – (UETCL) 2 VALUE FOR MONEY AUDIT REPORT coverage ofthegrid andthenumberofhouseholdsconnected to it electricity. Improving access and use of electricity requires increasing both the geographical environmental effects5. serious has which wood from mainly Uganda, in consumed energy total the of 92% for accounts Biomass others4. among projects energy renewable and electrification rural instance, for programs government of implementation the hampers grid transmission national The capita2. per of 3.2%, 2009) which is below kWh the sub Saharan average of 27.2%3. The 2,752 low coverage of the of average world electrification rate was reported 16% at (growing population million 32 the for the the at rate and 578kWh of Africa in consumption average the than lower significantly is which (2012), capita per 90kWh at 2013/2014 respectively. 319.8billion UGX and UGX 192.6billion towardsand transmissioninterconnectionimplementation2012/2013 of the during lines of investments significant made Government access to the grid, power shortages and thereby enhance industrial and business growth, key focus of the government electricity sector strategy. To address the challenge of limited of the country. Specifically, the rehabilitation and upgrade of the transmission system is a sector, to strengthen and expand transmission capacity in order to meet the energy needs with the support of development partners prioritized investments in the country’sDevelopment Plan (2010/2011-2014/2015). Accordingly,electricity the Government of Uganda (GoU), transformation social and education and health. Limited access and use of energy significantly slows down economic 1 1.2. 1.1. INTRODUCTION CHAPTER ONE 6 5 4 3 2 cope withgrowth inenergy demand. Company Limited (UETCL) to manage the high voltage transmission grid infrastructure to TransmissionElectricity Uganda established Uganda of Government The consumers. by foreventualgrid use national evacuatevoltage powerfromthe high to generationplants Inadequate energy infrastructure has been identified as a major constraint to accessing to constraint major a as identified been infrastructureenergyhas Inadequate reported was consumptionUganda’s electricityinterventions, government such Despite National the in laid as Uganda in sector priority a as identified was sector energy The agriculture, to linkages its to due development for important is electricity to Access National Development Plan2010/11-2014/15[page 151,152(xii)&153]. National Development Plan(2010/2011-2014/2015)page149. UETCL’s Corporate Business Plan(2014-2018),Paragraph 4.6.4(page26). UETCL’s Corporate Business Plan(2014-2018),Paragraph 4.1(page18). National Development Plan2010/11-2014/15(page149&151). Civil SocietyAlternative Proposals to theNationalBudget Framework Paper –FY2010/2011 MARCH 2015 MOTIV BACKGROUND COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS ATION 1 Tasiso lns rvd ifatutr ta i ue to used is that infrastructure provide lines Transmission . 6 . Limited (UEDCL),for distribution. Company Distribution Electricity Uganda the (UETCL)and transmission;forLimited ElectricityTransmissionUganda Company the generation; for (UEGCL) Ltd Company GenerationElectricity Uganda namely:the created, were Uganda of Government the by owned wholly companies independent Electricity Board (UEB), three (3) successor enhance projects execution. to recommendations suggest and causes possible gaps, the performance identify the to lines undertaken was transmission of projects of assessment implementation independent an power compensation process.8 proposed the the regarding complaints raised projects, by affected property and was land whose Mbarara, Tororo and Iganga, Bugiri, Mayuge, Jinja, of GoU to deemedenergy claims. exposing by there infrastructure available fully evacuated to the national grid with be the cannot District Hoima in Plant Power Hydro Kabalega at energy generated the excessat operatingcapacity. Forexample, Thereoutages. were reportsalso plants of power more experienced districts Kasese and KabaroleKyenjojo, Kibaale, Hoima, of associated substation ofHoima. its and 220kV to line transmissionNkenda Hoima- 132-kilovolt the upgrade to delays 8 7 1.3.1 1.3. olwn te nudig f h Uganda the of unbundling the Following that background this against is It In addition, communities in the six districts As a result, power consumers in the districts Government of cases reported Media Daily monitor of27th March 2012. Daily Monitor, Monday, October 14,2013 AREA DESCRIPTION OFTHEAUDIT General Description 7 IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS otatr udr h spriin of and donorsupervisionmissions. supervision the UETCL engineers, supervising consultants (EPC) under Construction contractors and Procurement Engineering, by out carried is projects the of implementation Actual Uganda. in 33kV above capacities with lines transmission electricity voltage high of establishment Electricity Regulatory Authority(ERA). agency- independent an by aresupervised Mineral operations and its and Energy (MEMD) Development of Ministry the of guidance policy under operates Company was incorporated on 26th March 2001. The iie (EC) s adtd y the by mandated Electricity Act,1999 Cap145to: is (UETCL) Limited 1.3.2 UETCL is the implementing agency for the which company limited public a is UETCL Uganda Electricity Transmission Company • • • • Export andimportpower inUganda. sales (single buyer) and purchases power bulk manage demand to system and supply between balance achieve power the coordinate above (HVTG) 33kV Grid Voltage Transmission High the operate and own BY UGANDA ELECTRICITY TRANSMISSION Mandate COMPANY LIMITED –(UETCL) MARCH 2015
3 VALUE FOR MONEY AUDIT REPORT 4 VALUE FOR MONEY AUDIT REPORT as describedinTable 1below: uaai Trr - 2.k, 2k ad brr - iaa 6k, 2 kV 220 66km, - transmission linesandassociatedsubstations Mirama - Mbarara and 220kV 127.7km, - Tororo - Bujagali 1.3.4 Table 1:Project Objectives 1.3.3. UETCL iscurrently implementing three transmission lineprojects whoseobjectives are Project – 273km,220kVTransmission Line Mputa/Hoima -Fort Portal- Nkenda substations transmission linesandassociated and Tororo-Lira –260km,132kV Mbarara -Nkenda -160km,132kV substations kV transmission linesandassociated and Mbarara -Mirama –66km,220 Bujagali -Tororo -127.7km,220kV Project name • • MARCH 2015 oes n tasomr ttos t brr Nrh n nw transformerstation atMirama substation. new and North Mbarara lattice at stations steel transformer and self-supported towers on km) 66 (approximately line transmission power conductor double circuit, double part), (Uganda Birembo Mirama- Mbarara- 220kV operational fully and commissioned tested,constructed, A towers andassociated baysatTororo lattice substation. power steel conductor self-supported on double (approximately127.7km) line circuit, transmission double part), (Uganda Lessos Tororo- Bujagali- 220kV operational fully and commissioned tested, constructed, A Project outputs Objectives ofUETCL Transmission Projects COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS and emergency conditions. Mputa risks hydrological mitigate to mix at generation hydro/thermal of provision generated and plant powerpower evacuate capacity to transmission adequate provide To economic development intheproject area. adequate providing and infrastructuretransmissionsocial the for by security and supplyquality power improved Ugandan through the population of needs energy the meet To structures. wooden with associatedcosts operational the reducestructurestowerto steel hazardswith natural other and fires to prone are that line Lira Tororo– along poles wooden replaceTo region ofUganda. northern and eastern western, the to power To improve reliability, availability and quality of Mbarara andthemid-western towns. between backbone voltage high a provide To and improvement ofsecuritysupply. Nile trade power for interconnection grid in regional electricity to Equatorial Lakes countries through increased access improve To Project objectives are shown inAppendix1. who reports to the Manager Project Implementation. Details of the Organisation structure CoordinatorProject a by headed (PIU) Unit ImplementingProject the has structurealso Deputy Chief Executive Officer (DCEO) and eight (8) heads of departments/managers. The by assisted is CEO The function. administrative the for responsible is who (CEO) Officer 1.3.5 • • • associated substations. Mputa/Hoima -Fort Portal- Nkenda-220kVTransmission LineProject and . . . transmission linesandassociatedsubstations Mbarara -Nkenda160km,132kVandTororo-Lira -260km,132kV 2 below: the amounts budgeted and released to the three projects are summarised in 2014, to 2010 period the For partners. development and government by financed 1.3.6. h tre rnmsin ie rjcs n ascae sbsain wr partly were sub-stations associated and projects line transmission three The UETCLBoardgoverneda is by Directors of Director/Chief Managing a has Executiveand substation atHoimasubstation. A constructed, tested, commissioned andfully operational new transformer 132 kVtransmission line(approx. 73km) A constructed, tested, commissioned andfully operational Mputa –Hoima (approx. 54km). Portal 220kVtransmission line(approx. 172km),Fort Portal –Nkenda A constructed, tested, commissioned andfully operational Mputa –Fort substation inFort Portal. A constructed, tested, commissioned andfully operational new transformer Opuyo &Lira substations. km) onself-supported steel lattice towers andsubstation extension atTororo, double circuit, single conductor power transmission line(approximately 260 A constructed, tested, commissioned andfully operational 132kVTororo-Lira and Mbarara at extension Nkenda in (Kasese). substation and Park) National Elizabeth Queen across used (monopoles and towers lattice steel self-supported on km) 160 Nkenda double circuit, - single Mbarara conductor 132kV power operational transmission fully line and (approximatelycommissioned tested, constructed, A Organisational structure Funding IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015 Table
5 VALUE FOR MONEY AUDIT REPORT 6 VALUE FOR MONEY AUDIT REPORT
MARCH 2015 Table 2: Funding of UETCL projects under implementation Project Classification Donor funding GoU co-funding – RAP – UGX name Funder Currency Budgeted Actual Budgeted Actual release
COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS disbursements Bujagali– Regional AfDF UA 7,590,000 2,362,395.23 66,437,786,897 24,122,827,569 Tororo – power trade JBIC JPY 5,409,000,000 1,917,721,804 (127.7Km) /Mbarara – Mirama – 66km) Mbarara- Grid re- AfDF UA 52,510,000 29,797,197 63,617,611,030 51,840,410,379 Nkenda investment (160Km) projects / / Tororo- Systems Opuyo-Lira extension (260Km) Mputa/ Power NORAD NOK 300,000,000 101,571,532.75 39,369,284,715 38,827,158,683 Hoima evacuation AFD US$ 23,000,000 3,000,000 –Fortportal project - Nkenda TOTAL 169,424,682,642 114,790,396,631
Source: OAG analysis of release schedules to UETCL projects 1.5 power The specificauditobjectives were: of construction of progress the evaluate to transmission linesandtheimplementation ofmitigationmeasures. was objective audit overall The 1.4 iv) iii) ii) i) and implementation oftheplannedmitigationmeasures. planned andimplemented to facilitate timely acquisitionofthecorridors To assess whetherResettlement ActionPlan(RAP)activitieswere properly facilitated effective implementation oftheconstruction projects. To assess theextent to whichsupervisionandmonitoring arrangements lines were executed asperagreed designsandSpecification of Works. To assess whether the contracts for the construction of power transmission and contract terms. lines were executed as per planned timelines, work plans, loan agreements To assess whether the contracts for the construction of power transmission years (2010–2014)thatis: calendar (5) five of period a over UETCL of Department ImplementationProjects SCOPE AUDITOBJECTIVES The focus of the audit was on three transmission line projects implemented by the • • • • Substations ofMbarara, Mirama, BujagaliandTororo. Mputa/Hoima-Nkenda, Mbarara –Nkenda/Tororo-Lira andassociated substations, Mbarara-Mirama/Bujagali-Tororo underNELSAP, IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
7 VALUE FOR MONEY AUDIT REPORT 8 V A L UE F O R M O N E Y A U DIT REPORT CHAPTER TW MARCH 2 2015 BY UG IMPLEMENTATION OFTRANSMI S COMP ANY LIMITED –(UET AND A ELEC TRICITY TRANSMIS CL) SION LINEINFRASTRUC SION O TURE PRO JEC TS and contract execution terms. management documents were reviewed to establish the agreed timelines, loanreview. under Projectprojects the conditions, of implementationprogress of the and assess to houses Procurement Engineering Manager Construction (EPC) contractors, supervising consultants and contractors (PID) of resettlement Department Implementation Project inspections to obtain necessary information to guide execution oftheauditincluding: implementation of while therest (8)were still attheinception terms stage. in progress substantial achieved had they because selected were three The substations. associated their with together audit the for selected were Tororo /Mbarara–Mirama; Mbarara – Nkenda / Tororo – Lira and Mputa/Hoima – Nkenda that anauditofhighqualityiscarried outinaneconomic, efficient andtimely manner. VFM (OAG) audit manual. The standards General require Auditor that the audit is planned the in a manner which ensures of Office the and Standards Auditing Institutions Audit works. construction of status of evidence provide to taken were sites houses resettlement and progress reports. monthly the in reported as status and schedules implementation actual the and made to consultants andsupervising physically verifycontractors the quality substation and quantity of EPC, the works with done and compare inspections with the field payments by followed documents management contract the of reviewinvolved This undertaken. was and contract terms lines were executed asperplannedtimelines,work plans,loan agreements To assess whetherthe contracts for theconstruction ofpower transmission 2.2 2.1 2.0 CHAPTER TWO lines were executed asperagreed designsandspecifications To assess whetherthe contracts for theconstruction ofpower transmission Interviews were conducted with UETCL’s project engineers; Principal project engineer,project Principal UETCL’sengineers; projectwith conducted were Interviews physical and questionnaires, interviews, review, document upon relied study The Out of the eleven projects under implementation by UETCL, three (3) projects of Bujagali - Supreme of Organisation International the accordancewith in conducted was audit The Photographs of tower foundations, towers erections, construction works at substation at works construction erections, towers foundations, tower of Photographs Using an Expert, a technical audit of the electrical and civil works done by the contractors DATA COLLECTION METHODS SAMPLING AUDITMETHODOLOGY IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
9 VALUE FOR MONEY AUDIT REPORT 10 VALUE FOR MONEY AUDIT REPORT We interviewed project implementation personnel in charge of RAP and also reviewed also and RAP of charge in personnel implementation project interviewed We implementation oftheplannedmitigationmeasures planned andimplemented to facilitate timely acquisitionofthecorridors and Assessing whetherResettlement ActionPlan(RAP) activitieswere properly reviewed also and consultants, and personnel management project interviewed We 3. facilitated effective implementation oftheconstruction projects sesn te xet o hc spriin n mntrn arrangements monitoring and supervision which to extent the Assessing appendix 2 and 2 appendix in are interviewed persons and reviewed documents specific of Details RAP progress reports to assess theplanningandimplementation ofRAPactivities. and monitor theimplementation ofprojects. monitoring the and reportsreports to assess the adequacy of the monthlymonitoring arrangements put in place to supervise consultancy agreements, contract consultancy MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS CHAPTER THREE 3 IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
11 VALUE FOR MONEY AUDIT REPORT 12 VALUE FOR MONEY AUDIT REPORT CHAPTER THREE hrfr ofr plc gieie. The guidelines. policy and offers sector therefore energy overall the the of responsibility has (MEMD) Development Development escrow the holds Uganda of Bank The Bank ofUganda(BoU) projects. is which responsiblegovernmentall monitoringfor (BMAU) unit also monitoring a It has applications. disbursement the loan agreements, reviewing and authorising for sourcing for funds, responsiblenegotiating, signing the on is government of (MoFPED) behalf Development Economic Economic Development Hoima interconnection. Mputa/ for Agency Development French and NORAD and Lira; – Nkenda/Tororo – Mbarara for – Fund Development African NELSAP; forCooperation International for African Development Fund and Japan Bank the include these and Specifically, memoirs). reviews mid-term compile also project of performance reports (aide- in They participate projects. implementation line transmission the supervising OFKEYPLAYERS 3.1 ROLESANDRESPONSIBILITIES 3.0 h Mnsr o Eeg ad Mineral and Energy of Ministry The Ministry ofEnergy andMineral compensation (RAP)fundsare deposited. where account special a is which account and Planning Finance, of Ministry The Ministry ofFinance, Planningand and funding for responsible are These Development Partners MARCH 2015 DESCRIPTION SYSTEM ANDPROCESS COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS il sace ad su ln tte, is titles, land issue and searches title Development Plan (EIP). to how on develop the Environmental guidelines Implementation and report (ESIA) the reviewing Assessment issues Impact Social Environmental after permits requirements, clearance environmental the with comply projects that ensures It activities implementation project that ensuring for Authority (NEMA) projects. the of progress the monitors project and owner the is export; and import power and operator system grid, voltage transmission high of operation supply, bulk power for: licenses issue and 33kV (HVTG) above Grid Transmission Voltage High the operate and develop own, to mandate the with company utility public a is which of UETCL, (GoU). Uganda of behalf Government the on projects line transmission Company Limited the within standardselectricity subsector. performance of tariff structures, development of and reinforcement establishment licenses, powerrelated of issuing is that activities sector development. mineral resources for social and economic the sustainable development of energy and promoteand establish, to also is mandate This Ministry, which is mandated to conduct Ministry ofLands,Housing andUrban responsible agency national the is NEMA National Environmental Management Transmission the of agency implementing the is UETCL Electricity Uganda power the regulating with charged is ERA Electricity RegulatoryAuthority(ERA) r environmentally-friendly. are n mitnne f u sain ad rnmsin ie i smaie in summarized is lines below. transmission and stations sub of maintenance and executeto EPC constructionthe processworks.The projectof implementationinitiation, implementation is conducted to ensure Right of Way (ROW) is secured before sourcing the the funder. in Feasibility study consultant is included procured to conduct are feasibility of ESIA and projectsRAP. RAP Viable National Development Plan(NDP)andGridDevelopment Plan(GDP)after identifyingthe appropriate software. and PS/SE made using is Analysis determined grid. interventions existing the of behaviour and demand power while cuttingthetrees. with complied be to guidelines issues and projects, line transmission the of result a as fortreesoffset cut an sustainableas out activities carry UETCLto understanding with of clearance certificates in case a forest is to be affected by the project. It signs memorandum corridor.project the in acquired be to property and land of valuations reviewing for responsible Source: OAG analysis ofimplementation oftransmission line project Figure 1:Project initiation,implementation andmaintenance process 3.2 The demand and load forecast is conducted by the planning unit of UETCL to ascertain to UETCL of unit planning the by conducted is forecastload and demand The F i rsosbe o rveig eeteet cin ln RP rprs n issuing and reports (RAP) Plan Action Resettlement reviewing for responsible is NFA National Forestry Authority(NFA) Sign agreementsandpr compl Acceptance Tests(OAT)upon Conduct Operational Implement RAPRecomm Clear sitesandhandovercorridorto Certify completedworks Handover projecttoPIDforonwardsubmiss etion PROCESS DESCRIPTION Decide whetherto Demand andloadforecastsmadetode Seek approvalofNEMA Cond periodically EPC contractor Source consultanttocon uct FactoryAcceptanceTests(FATs)forequipmentbeforeshippin
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MARCH 2015 nce
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13 VALUE FOR MONEY AUDIT REPORT 14 V A L U E F OR MON EY AUD IT REPORT CHAPTER F MARCH 4 2015 BY UG IMPLEMENTATION OFTRANSMI S COMP ANY LIMITED –(UET AND A ELEC TRICITY TRANSMIS CL) SION LINEINFRASTRUC OUR SION TURE PRO JEC TS Table 3:Plannedexecution periodandprogress /status ofimplementation progress percontract are summarisedinTable 3below. the the of Details on-going. for were still works yet elapsed periods had contracts) (5) contract(five projects two the audit, of time the 2015, March by that established was It provided contractors, for months the 30 consultants. and contractors for and months 24 to consultants 18 from ranging UETCL, periods contract for between signed contracts The 4.1 PROGRESS OFWORKS FINDINGS, CONCLUSIONS ANDRECOMMENDATIONS CHAPTER FOUR Ltd Ms Jyoti Structures (127.7Km) –LotA – Tororo 220kV NELSAP -Bujagali Project name AECOM consultant –RSW/ Supervising M/s Isolux stations LotC– NELSAP Sub Ltd Ms Jyoti Structures (66Km) –LotB – Mirama 220kV NELSAP -Mbarara 12th July 2013 Project start date Planned execution period 2011 08th November 19th August 2013 12th July 2013 IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS 12 Project enddate 07th May2014 2015 12th February 12 th th Jan2015 Jan2015 BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) Physical Progress Lot B–16% Lot A-34% physical progress was; had elapsedyet Construction period match EPCcontract. contract furtherto need to revise the 2015. Thissignifies to end ofseptember extension of 8 months requested for an the EPCcontractor 31st March 2015yet Contract revised to September 2015. (8) monthsto end extension ofeight requested for an The EPCcontractor 15%. physical progress was had elapsedyet Construction period MARCH 2015
15 VALUE FOR MONEY AUDIT REPORT 16 VALUE FOR MONEY AUDIT REPORT however, thisextension hasnotbeenapproved. April 2014 requesting for an extension to match the completion date of the EPC contract; in proposal a submitted consultant the extension, time for application contractor’s the following and 2016 January to up extension an for requested contractor EPC the one case, In above). 3 (table audit of time the by periods contract of extensions for requestssubmitted already had Contractors EPC and Consultants the that noted further was It not commenced seven (7)years after itsplanned commencement. In one project, Hoima/Mputa, apart from carrying out some RAP activities, the project had Source: OAG analysis ofEPCcontracts. interconection Fortportal – Nkenda Hoima/Mputa – consultant -Hifab Supervising Techno Electric Transmission and Kalpa-Taru Sub stations Techno Electric Transmission and Kalpa-Taru (160Km) – Lot2132Kv Mbarara –Nkenda Techno Electric Transmission and Kalpa-Taru - 132Kv(260Km) Tororo –Lira –Lot1 Project name MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS 1st July 2008 27th October 2010 09th April2013 09th April2013 2013 26th February Project start date Planned execution period 30/6/2013 27th June2014 08th March 2015 08th March 2015 2015 25th January Project enddate contractor Procurement ofEPC has notkicked off. 0% asconstruction match EPCcontract. the contract furtherto signifies need to revise January 2016.This (12) monthsto end extension oftwelve requested for an the EPCcontractor 08th April2015yet Contract revised to Lot 2–63% Lot 1–0% Substations were: Physical progress for period elapsedyet 100% ofthecontract Lot 2–76% Towers was; physical progress for period elapsedyet 100% ofthecontract reported at86%. for Tower works was physical progress period elapsedyet 100% ofthecontract Physical Progress Table 4:Proportions ofPAPs sofar paidand%ageacquired 4 below. in indicated challengeas remainedaccessROWa full of securing compensations, before full acquisition of right of way. Whereas UGX 114.79bn had been disbursed for RAP contractorscompletelyprojectwerecommencement.engaged EPC not to securedprior Mbarara-Nkenda/Tororo- Lira, Bujagali-Tororo/Mbarara-Mirama and Mputa/Hoima were Waysof threeprojectsforRight the powertransmissionline of all that established Audit Right ofWays (ROWs) priorto commencement oftheEPCcontract. requisiteall accessthereto,including and sites the of possession physical full and legal provide and acquire to (UETCL) employer the required contractors, (EPC) Construction The contract agreements signed between UETCL and the Engineering, Procurement and i. lines were caused bythefollowing: transmission the of construction the projectin delays the that with established was it management, interviews and documentation management contract the of review From (160km) Nkenda Mbarara- (66km) Mirama Mbarara- (127.7km) –Tororo Bujagali Name Project Delays inlandacquisition(Right–of–Way) 81 80 81.18 2014) (December up PAPs %age ofpaid 78% 68% 41% December 2014) acquired (asat % corridor IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION prvd y G, vn after even CGV, making asecond revaluation. by approved rates valuation of rejectionPAPs compensated for. owner been not graveshad two claimed the Ntungamo, AP5/9 - tower at example for valued not Claims that some properties were • • the example: for process delayed ROW of acquisition PAP have amongst claimants disputes Land after even CGV, making asecond revaluation. by approved rates valuation of rejectionPAPs Comments nte pro claimed person ownership ofthesameland. compensation another upon Nyakatoni where at AP2/5 Tower failed to avail to UETCL, and they however, had which, title land PAPsa the that the claimed where at Kasenyi 4/14 AP locations Tower COMPANY LIMITED –(UETCL) MARCH 2015 Table
17 VALUE FOR MONEY AUDIT REPORT 18 VALUE FOR MONEY AUDIT REPORT contractors causing project delays. EPC fromthe submittals document and/or design approval This of the subsequentlyaffected completed. were projects the before expired contracts the that established Audit implementation, defects liabilityperiodandcommissioning periods. procurement, the for cater to respectivelyHIFAB, and AECOM now and RSW for 30 months for32 planned were review under projects two the for contracts consultancy The ii. Source: OAG analysis ofUETCL feasibility study reports Table 5:Execution ofRAPimplementation UETCL– approveby submitted valuations to CGV by delays PAPs, by valuations (CGV) Valuer Government Chief of rejection rates, Persons (PAPs) Affected during RAP surveys, failure Project by district local involve governments to update their valuation to failure disputes, land including factors, several by The delay to acquire and fully provide physical possession of the Right of Way was caused Source: OAG analysis ofRAPquarterly progress reports Table 5below anddelayed in completion ofresettlementreflected housesfor thepaidupPAPs.as payments actual and valuations conducting between lapses time of out Project Nkenda Mputa/Hoima- Mbarara-Mirama Bujagali-Tororo/ Tororo-Lira Mbarara-Nkenda/ (229km) Nkenda Hoima– (260km) Lira Tororo- Name Project MARCH 2015 Expiry oftheconsultants’ contracts COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS 229 78 2014) (December up PAPs %age ofpaid concluded Time whenRAPwas was revised in2009 October 2007and October 2007. October 2007 80% 81% December 2014) acquired (asat % corridor (Appendix IV), (Appendix started compensation Time whenPAPs 2010 2011 2011 prvd y G, vn after their properties. revalue even to efforts CGV, making by approved and rates valuation of rejectionPAPs PAPs of payment Delayed surveyed dueto hostilities. not was Lira to Amac from (30%) Km 44 example for noted were Cases of hostilities by some PAPs after their properties. revalue even to efforts CGV, making by approved rates valuation of rejectionPAPs Comments and rejections by PAPs rejectionsby arising and (in years) Compensation Delays inPAPs 3 4 4 the substations andtransmission lines. for equipment construction to relating taxes customs of payment towards diverted was forresettlementmeant 7,423,089,953 UGX that noted Projectwas Affectedof Persons.It The progress of works was further affected by the diversion iii. of funds meant for compensation the Mputa-Nkenda lineiscompleted. means that UETCL will have to incur additional costs to keep the substation running until (Marchconclusionaudit startedthe this not constructionby of This had 2015). line the of since 2016 Marchcompletion in its rendered upon idlebe will line transmission Nkenda Mputa/Hoima- the by powered be to was which substation Portal Fort Additionally,the 2014) whichwassubsequently paid. July to 2012 December is (that period months 20 the over 3million USD of interest and claims energy deemed to led (unevacuatedThis grid. national the capacity to sold be to idle meant 6MW of power) at operating plant generating has power line Kabalega interconnection in Mputa/Hoima resulted the of construction in delay the Furthermore, low The projects.absorption meansgovernment incurs commitment chargesthree onfundsnotutilized. the for 57% to 29.8% from ranged funding donor of Utilization Source: OAG analysis ofdonordisbursements. Table 6:DonorandGoUdisbursements The delaysalsoled to low absorptionsoffundsasdepicted byTable 6below. demobilisation andwilltranslate into additionalcosts. and mobilisation continuous contractor to led has line transmission Mbarara-Nkenda along campus new the at UniversityMbarara and Ishaka in land University International for extensions which may have cost implications. As an example, diversions near Kampala established/approved), been as yet evidenced not have by (these inevitableboth be the will Consultantsoverruns resource delays, and the EPC of resultcontractors a As requests Nkenda Mputa/Hoima- (Lot B) Bujagali-Tororo (Lot A)and Mbarara-Mirama (Lot 2) Mbarara-Nkenda 1) and Tororo-Lira (Lot Project Diversion ofRAPfunds line transmission Financing Norway – JICA AfDF AfDF EPC Funder of IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS USD 52,100,000 5,409,000,000 JPY UA 7,590,000 UA 52,510,000 currency) (Unit of Loan amount BY UGANDA ELECTRICITY TRANSMISSION 15,541,714.06 USD 1,917,721,804 JPY 2,362,395.23 UA UA 29,797,197 currency) (Unitof at 31/12/2014 Disbursed as COMPANY LIMITED –(UETCL) 29.83% 35.45% 31% 57% 31/12/2014 as at release Percentage MARCH 2015
19 VALUE FOR MONEY AUDIT REPORT 20 VALUE FOR MONEY AUDIT REPORT Table 7:RAPfundsrelease byMEMDto UETCL fully absorbedasshown inTable 7below. been not had which funds RAP of released68% averagehad on GoU audit of time the by there were still noted delays in disbursement and absorption of these funds. For example, RAP, forreleased funds had GOU when Even projectobjectives. the of timelyattainment the on impacted which schedules planned the behind was projects the progressof The Audit Comment Source: OAG analysis ofGoUreleases schedules Nkenda Mputa/Hoima- Tororo (LotB) and Bujagali- Mirama (LotA) Mbarara- Nkenda (Lot2) 1) andMbarara- Tororo-Lira (Lot Project • • • • external factors whichinclude: with engagements and acknowledged are stakeholders will continue to be done. Nevertheless acquisition delays are mostly associated with with associated delays The compounded These evacuation requirements for theIndividualPowerscandal. Plants(IPPs) atKabalega plant. OPM the with problems the to due Funding NORAD of would match the anticipated capacity. The delays were that exacerbated by the suspension line transmission 220kV a and refinery bigger a construct to decided Uganda of Government were made. findings moreviableoil Transmissionas Hoima-Nkenda line The Fort Portal substation idling was associated with changes in the plan for the Mputa/ Management response Totals MARCH 2015 eae rlae o cmesto fns u t bdeig eurmns For requirements. budgeting to due funds compensation of releases Delayed Delays associatedDelays Centralwith Government Valuer (CGV): officeThe inadequately is h Lgl rmwr cnenn ln aqiiin n h cuty os o favour not does country the in acquisition land concerning framework Legal The eetos f opnain ud b Poet fetd esn (As de to due (PAPs) Persons Affected Project by funds compensation of Rejections speculation. impossible. procuredareContractorsis beforethe acquisition early and secured been not has financing external whose project a for commence cannot compensation example, infrastructure projects. country atthesametime; the in infrastructureprojects on-going many the handle to facilitated and staffed COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS 39,369,284,715 66,437,786,897 63,617,611,030 Budget (UGX) 169,424,682,642 38,827,158,683 24,122,827,569 51,840,410,379 releases (UGX) Cumulative 114,790,396,631 98.6 36 81.48 budget of the release %age 4,435,877,763 15,536,415,749 2014 UGX) as at31 Bank balance st Dec. concrete strengths conformed to designsasapproved bytheconsultants andemployer. results revealed that the concrete strengths for foundations varied from C15 to C30.These Laboratory (CML) for the various foundations done by the contractors at various sites. The from C10for blindingto C30for large foundations. concretedesigned The strengths,employer, consultantand approvedthe both by ranged concrete strengths for the various uses ranging from blinding, small to large foundations. future usagewithoutupgrades. currentand both forpower planned the with currentassociated the transmit to capacity Tororo, – Bujagali of that Mbarara –Mirama transmission linewasto useACSR Hawkconductors (220kV). while kV) (132 conductors Sycamore AAAC use to was lines used met the specifications as per the contract in terms of quality and capacity. The and quality of terms in following were observed: the contract per as specifications the met used specified the materials as per the and EPC contract. We carried conditions out tests to confirm ground whether the materials on and depended designs consultants The the (UETCL). employer by the approved were which designs prepared contractors EPC The 4.2.1 mechanical and works to beexecuted. electrical civil, the for requirements quantity and quality These the detailed specifications. contract and designs approved the with accordance in executed be works the that requiredcontractors EPC the with into entered UETCL contracts The 4.2 During the audit, we assessed the concretethe assessedwe testresults audit, cube fromthe MaterialsCentral During the the design to requiredwere contractors employer’sthe requirements,the to According ii. Concrete usedfor foundations the with quality designed/planned the of be to conductorswerefound the lines Forboth According to the contracts, the contractor for Mbarara – Nkenda, Tororoi. Conductors – Lira transmission • Consultancy contracts should be reviewed in a timely manner to allow approval of approvalallow to manner timely a in reviewed be should contracts Consultancy • UETCLconsider should timely• implementation avoidResettlementto of Plan Action land of acquisition that ensure to undertaken be should planning properfuture, In • perceived their regarding authorities responsible the with consult should UETCL • accesscontractors the allow to expedited be should way of right of acquisition The • Recommendations designs andsupervision. disputes relating to landvaluations. contractors. of engagement before but financing external securing after immediately done is inadequacies inthelegal framework for landacquisition. compensation addressed. and disputes land involvingchallenges the have to governments local district and (CGV) Valuer Government Chief PAPs, engaging require will corridor. This the to ASSESSMENT OFWORKS EXECUTED Quality ofworks IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
21 VALUE FOR MONEY AUDIT REPORT 22 VALUE FOR MONEY AUDIT REPORT Table 8:Comparisonoftower spansagainst provided tower schedules and reported spans. design the with well compared spans tower checked the that noted was it and below 8 towerwith reportedspans contractorthe by towerthe in schedules indicatedin as and after construction. before information this provide to required is contractor The sag. conductor maximum field after conducting a route profile and considering the conductor ground clearance and Table 9:Comparison ofquantitiesexecuted against works certified executed. Tablein shown 9 are assessment of results the and certified those and executed quantities the compare to reviewed were projects 3 the on executed works the to relating certificates Payment Payments for foundation anderected towers 4.2.2 Quantityverification Source: OAG analysis oftower spanfielddata and tower schedules iii. The towers were randomly sampled and their spans checked. The spans were compared the in determined is and towers consecutive two between distance the is span tower A 1 S/N S/N 2 1 3 2 3 4 MARCH 2015 Span oftowers Lira (Lot1) Tororo – Projects Project name (Lot 2) – Nkenda Mbarara (Lot 1) Tororo–Lira A) Tororo (Lot Bujagali – (Lot 2) Nkenda Mbarara– (Lot A) Tororo Bujagali– B) Mirama (Lot Mbarara – COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS below. certified so far quantities quantities The compared the with well 503 cast Foundations December 2014 Certified works asat 270 226 checked Towers 46/0 46/A and 8/0 and8/1 11/10 11/9 and 2/10 2/9 and 430 erected Tower 223 203 (m) Audit span 202.9 360.95 365 354.5 503 cast Foundations Dec 2014 Executed works asat 270 226 Design span(m) Not available 360.92 360 352.4 430 erected Tower 223 203 Remarks not submitted Tower schedule Ok Ok Ok Okay Remarks Okay Okay Table From a review of the consultants’ contract and field inspections, the following were following the inspections, field noted: and contract consultants’ the of review a From line projects transmission ofNELSAP&Mbarara/Nkenda &Tororo-Lira. two of construction the of supervision and for management consultants project with the 3,959,238 Euros of tune the to contracts two into entered UETCL 4.3.1 4.3 SUPERVISIONANDMONITORING OFPROJECT WORKS on final verification a for is need completion There andcommissioning. specifications. and designs agreed the with relating to the sample works mechanical of and contracts electrical civil, reviewed the as undertaken, verifications at the March of 2015 basis were the generallyOn in accordance Audit Comment Source: OAG analysis ofpaymentcertificates • • • Management acknowledges thefindingsasdetailed above. Management response 4 S/N at thecompany headquarters inCanadawithless fieldvisits to construction sites. staff input time was allocated for ‘home’ based activities which were being performed substation works in different locations. This was partly attributed to the fact that more and erections towerexcavations, foundation as such time same the at implemented for both transmission line and substation works yet several constructions were being For the ‘Field’ based activities, there was on average one supervising consultant on site to renew the contract, UETCL stands ariskoflosing thepaymentsmadeupfront. Additionally, where the consultant contract period expires and the consultant opts not of construction wasreported as34%,16%and15%for LotsA, BandCrespectively. progress contractthe pricethe yet of 60% paid been had consultantforNELSAP the audit, of time the Forprogressconstructionexampleworks..by minimal the or of no being paid up to 60% of the consultancy contract amount even where there was either and final approval of commissioningsubmission report.on This10% createdand atests possibility acceptance of theand consultant report commissioning of submission reviewapprovaland submissionreport, preon of 10% commissioning report,on 20% mid-term the of approval and submission on 20% contracts, EPC of signing on 20% commencement, on payment 20% providedforcontracts consultant supervising The Contract supervision (Lot B) – Mirama Mbarara Projects 109 cast Foundations December 2014 Certified works asat IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS 33 erected Tower 109 cast Foundations Dec 2014 Executed works asat BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) 33 erected Tower Okay Remarks MARCH 2015
23 VALUE FOR MONEY AUDIT REPORT 24 VALUE FOR MONEY AUDIT REPORT eetv wrs n ie Fr xml, eetv canl ok a Maaa North Mbarara at the supervisingConsultant. works channel defective example, For substation as shown in the time. in works defective Source: OAG site visits due to shoddycivilworks extension at substation demolished North channel Mbarara the of Part Picture 1DemolitionsatMbarara Northsubstation identify to unable was consultant supervising the staff, field inadequate of result a As supervision. was it but Financier the assistin to field the to staff M & the O its UETCLintervention,deputed rejected.an As to submitted was proposal The supervision. enhanced for proposal a for consultant the requested UETCL site, on supervision boost to order In a qualitychecklist. activities not allowed to proceed without subsequent the with clearance activities, of critical the the supervising team on followingfocused mainly has Supervision engineers. presencerequirecontinuousof activities the site all not activities, based Field Forthe on-going contracts. out. The dual contract types paid (Lump sum been and far Time based), so is has already 20% being onlyused in which other of out phase supervision during payable is 60% during consultants the of participation tendering stages (20%) of the EPC contracts. These were duly and achieved. The remaining resources intellectual of for mobilization made are which (20%) payments advance include payments contract the of 40% and supervision phase. phase, be tendering to include These milestones effected. are include payments and which against phases achieved in designed are contracts consultants` The Management response MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS Picture 1 below was identified by the UETCL team rather than onain oun a Maaa North to due shoddy civilworks Mbarara rebuilt and demolished at substation columns Foundation At thetimeofabandoning site, thestatus ofworks wasas indicated inTable 10: However, in 2013, the contractor’s accounts were frozen and could not proceed with works. of UGX 8.099bnfor Mbarara –Nkenda (50houses) andHoima-Nkenda (95houses) In 2011, UETCL signed contracts with Lamba Enterprise to construct 145 houses at a cost and clearance ofcorridor. resettlementhouses constructing of intervention timelyensure to families) ledchildren elderly,(the namelygroupsand vulnerable disabled for houses construct to was UETCL 4.4 number ofprojects. increasing the with cope to strengthened be should unit monitoring the of capacity The Recommendation the monitoring functionisstrengthened to make itmore effective. that important is projectsUETCL,it implementedof by increasing number the of light In Audit Comment quality ofsupervisionandreporting. compromise may which overload work to lead could it but interest of conflict breed this onlyNot does involvedfunction. monitoring performedthe contractalso in management persons same the that implying of managers project members as doubled constraint,also unit staffmonitoring the to due that indicated management interviews, Through basis. quarterly a on projects of implementation monitoring forresponsible unit a has UETCL 4.3.2 loss in theevent offailure bytheConsultant to perform. The designofthesupervisingconsultancy contracts exposes UETCL to ariskoffinancial Audit Comment to managetheshortcoming. limits, the dual role of Project Manager and Monitoring is necessary as an intervention Due to human resource shortages in the company imposed by ERA`s regulatory budget as desired. Quarterly reports have beenproduced andare available. in Projects UETCL.However, of stillgrowingis unit the independentlytocapacity in number projectsmonitor increased the with deal to established was unit monitoring A Management Response upcoming projects to match consultancy paymentsto construction works. UETCL is advised to roll out the dual contracts types (Lump sum and Time based) to all Recommendation Resettlement ofProject A ffected Persons Monitoring byUETCL IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
25 VALUE FOR MONEY AUDIT REPORT 26 VALUE FOR MONEY AUDIT REPORT al 1: rges f otat ind ewe Ms ab ad EC for UETCL and Lamba M/s between construction ofresettlement housesunderRAP signed contract of Progress 10: Table name Project Nkenda Mbarara- -Nkenda Mputa Hoima/ MARCH 2015 contract signing the Date of 12 2011 2011 September, 28 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS th th ,March, , the contract Parties to Enterprises LAMBA UETCL and Limited Enterprises LAMBA UETCL and (UGX) Contract sum 5,300,000,000 2,799,226,565 Remarks traverses. the line where Kabalore Kibale and of Hoima, the districts months in of 12 for aperiod 55,789,474 cost ofUGX. houses ata resettlement five (95) Ninety- months. of 12 for aperiod constructed were to be 55,984,531 at UGX. each valued houses Fifty (50) site. abandoning time of at the execution contract Status of off. not taken while 8had incomplete were 28 sites defects, over with and handed completed 59 houses off. not taken units had while 28 incomplete were Ishaka, Sheema, Rubirizi, Bushenyi, Mbarara, districts of Line inthe Nkenda Mbarara- on bathroom latrine and kitchen, pit houses, 22 main 716 o ae mrvmns n the on improvements make to USD 67,146 at services consultancy additional of engagement prompted This projects. other for requireddata the all capture not under RAP could Interconnectionbut ProjectBujagali for piloted was system The improve efficiency. to PAPsfiles handling in used work paper of volumes the minimizing at aimed was with compensation management modules. This System a and management expense and Information document implement leaves and Way develop design, to 658,031 USD at vendor a engaged UETCL 4.5 of loss isstill apparent. risk the hence court before is matter the that evidence provide not did UETCL Audit Comment Nkenda-Hoima projects respectively. and Mbarara-Nkenda 242,925,021 for resettlement houses under UGX and 41,877,402 UGX of payment over to led that executed works of value the of was noted that there was an overstatement the status and value of outstanding works. It site, UETCL the conducted an of evaluation to abandonment ascertain the Following provisions ofthecontract. the up recovery follow of funds in accordance with the closely should UETCL Recommendation and thecase isnotyet decided amounts reconciled the of recovery for payment renew guarantees. UETCL not suedtheContractor advance/performance could the he therefore and the freezing of the contractor’s accounts his contract expiring. This coincided to with due was contractor the to advances The observation is noted. The unrecovered Management response SYSTEM (WIS) WAY LEA VES INFORMATION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS meet userneeds. torequirements system that all capture would assessment needs comprehensive a undertaken have should UETCL stage, undertaken during planning. At assessment the needs planning inadequate by caused was system the operationalize to failure The review of the system indicated that the relating to transmission linecorridors. information of storage and documentation of challenge a faces still UETCL system, the in inadequacies of Because system. provider to develop anall-round system. the guide would that (TORs) Reference of have should developed UETCL clear and comprehensive Terms down, scaled was contract initial the of scope the Whereas Audit Comment come upfrom timeto time. may that enhancements required such any and BIP the fromdifferent far were that scenarios/requirements for cater to meant is contract support new The system implementation basedonBIP. based pilot a technical specify instead identify and scope the to department (IT) was requested to reduce funding, failing appropriate Upon projects. upcoming and existing both for scope entire the covered and round all were that TORs had procurement initial The constraints. budget to due abandoned scope after a failed procurement that was reduced of re-tender a was audit under procurementthe that noted be should It Management response of thesystem. a functionality expected the of realisation full the ensure to provider that service the ensure is properlysupervise also and undertaken assessment needs should comprehensive UETCL Recommendation BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
27 VALUE FOR MONEY AUDIT REPORT 28 VALUE FOR MONEY AUDIT REPORT processing ofRAPcompensations. not rolled out to all projects. The failure to operationalize WIS could not guarantee timely processingfacilitatePAP was would of files, it that Way(WIS) leavesSystemInformation and timely execution of the project works. Whereas interventions were made to acquire a quality on impact to likely also are works of monitoring and supervision in Weaknesses studies and actual compensationfeasibility of project affected persons and diversion of RAP funds. the of conducting between time of lapse long way,the of right of acquisition delayed by caused was This objectives.project the of attainmenttimely the on impacted agreed designs and specifications, the progress of the projects was behind schedule which Whereas the civil, electrical and mechanical works were generally in accordance with the OVERALL AUDITCONCLUSION MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS electric power production equipment under specific conditions designated by the designated conditions specific under manufacturer. equipment production power electric - Capacity Deemed any otherfixed ormoveable asset, eitherinfullorpart,permanently or temporarily. agricultural, pasture or undeveloped/unused land), annual or perennial crops and trees, or the Project, loses the right to own, use or benefit from a built structure, land (residential,of implementation the of result a as who, person Any - (PAP) Person Affected Project Engineering, involve KiloWatt Hour(kWH)-Unitofmeasure ofcurrent used. works contract the where contract a Procurement is andConstruction. This – contract EPC resource bytheproject thatisacquired atthetimeofsecuringcorridor. Compensation - Payment in cash or in kind at replacement value for an asset or affected water. Hydro-electric- on thevoltage rating ofthelinefrom 50feet to approximately 175 feet. convenient access for repair and inspection vehicles. The width of a ROW varies depending However,provideand ROWmore accessthe cases, of roadssome portion constitute in a heights). mature low and growth (slow patterns growthfavorable for selected plants or be needed for safety and/or access reasons. A ROW generally consists of native vegetation may clearing vegetation Some vegetation. and structuressurrounding and lines voltage high- the between margin safety a provides It accidents. other and fires of risk avoid to and facilitatemaintenance,to needed facilities,associated and line transmission the for Right Of Way (ROW) - in an“industrial” appearance. include a variety of structures, conductors, fencing, lighting, and substations other general, featuresIn road.that access resultpermanent a by reached are and fenced, normally areThey gravel. typicallysurfacedwith and vegetationclearedare theyacres;of several lower voltage for consumer use. Substations vary in size and configuration but may cover Substations – Devices used to convert very high voltages used for electric transmission to might be150feet tall withcross armsasmuch100feet wide),metal structures. employ an open lattice work or a generallymonopole, that but generallyexist they designs aretower very of tall (a variety 500 other.A kV towereach from and surroundings their system. Their function is to keep the high-voltage conductors (power lines) separated from Transmission Towers – Kilo V V GLOSSARY OFTERMS olt -isameasurement ofelectromotive force inelectricity. olt -Unitofpotential energy equalto athousandvolts Hydro means water and Hydro-electric means making electricity from electricity making means Hydro-electric and water means Hydro h mxmm ae otu o a eeao, rm mvr o other mover, or generator,prime a of output rated maximum The The right of way for a transmission corridor includes land set aside These are the most visible component of the power transmission IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
29 VALUE FOR MONEY AUDIT REPORT 30 VALUE FOR MONEY AUDIT REPORT APPENDICES Appendix I:Organization Structure ofUETCL. MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS Appendix II:Documentsreviewed interconnection projects. Mbarara-Nkenda andMputa/Hoima Project implementation plan for NELSAP, Mputa/Hoima RAP for NELSAP,Mbarara-Nkenda and environmental actionplanframework management planandSocial and environmental actionplan;Waste monitoring plan;Contractors’ social Environmental mitigationand Minutes ofmanagementmeetings M&E quarterly reports reports Monthly andquarterly performance three projects Aide memoire for allthefunders onthe Nkenda Mbarara-Nkenda andMputa/Hoima- Apraisal documentfor NELSAP, Investment Plan(GIP) Grid Development Plan(GDP)/Grid (AFD) (AfDF) &French Agencyfor Development (NORAD), African Development Fund Norwegian Development Agency for International Cooperation (JBIC), Development Bank(ADB),Japan Loan agreements withAfrican Acts Electricity Act,LandNFA andNEMA Livelihood Restoration Plan(LRP) Community Development ActionPlan/ Hoima-Nkeda Resettlement and NELSAP, Mbarara-Nkenda andMputa/ Document IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS Implementation procedures packages causes for refuting compensation made onPAPs outstanding to establish outstanding. Further analysis willbe PAPs for eachproject, compansated and Resettlement andcompesation plans, projects understudy established bythecontractors ofthe Environmental protection measures three projects covered bytheaudit Resolutions ofmanagementaboutthe reported on and whetherfollow upsare madeand recommendations madefor improvement Challenges faced bytheproject, study Progress ofwork for eachproject under study the progress ofthethree projects under The respective financiers’ assesment of and risks The project appraisal recommendations included intheGDP/GIP Whether theprojects understudy were Financing terms andconditions measures forests andenvironmental mitigation acquisition anduse;compensations; UETCL’s mandate, Legislationonland procedures. The Compesationandresettlement Purpose(s) ofReview -To ascertain:- BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
31 VALUE FOR MONEY AUDIT REPORT 32 VALUE FOR MONEY AUDIT REPORT (years underreview) Ministerial policystatements for MEMD goods, services anduseofConsultants. Rules ofProcedure for procurement of years underreview. Project audited accounts ifanyfor the Document MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS overall Ministerial programs are budgeted for andintegrated into the How transmission lineproject activities of goods,services andconsultancy The rules andguidelinesfor procurement performance over theyears The fundingoftheproject andits Purpose(s) ofReview -To ascertain:- Appendix III:Interviews conducted Central Government Valuer (CGV) A sample ofPAPs yet to bepaid(6) under RAP PAP houses contractors of consultants & Supervising contractors, of EPC Management MEMD of UETCL Management Unit 1 –suppervisor 2 –Contractors and MEMD transmission lines– Commissioner projects respectively and Mputa/Hoima Nkenda/Tororo-Lira NELSAP, Mbarara- (3) Engineers for Principal Accountant and investment Manager planning Officer Deputy Executive Executive Officer Environment officer Principal implementation Manager Project Designation IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS files submitted byUETCL Average timefor approving PAPs valued • • forward sub-stations, challenges faced andway Status ofworks ontower, monopoles and Nkenda interconnection projects Mbarara-Nkenda andMputa/Hoima- and activitiesofMEMDinNELSAP, The roles andresponsibilities, functions challenges faced andwayforward and theirassociated sub-stations, Status ofworks onallthethree projects the project andwayforward. far andchallenges intheimplementation of process, thetotal fundingto theproject so The fundsflow, receipts anddisbursement • • • • • • To ascertain/get:- Purpose oftheInterviews UETCL Steps taken to solve their claimswith claims issues withUETCL concerning their Existence ofclaimants,theun-resolved project andwayforward Challenges intheimplementation ofthe under study Progress ofworks for thethree projects measured How are theproject deliverables activities performed expected results (output)from the the project implementation andthe The resources (inputs)for activitiesof and whatrole they play The otherstakeholders intheproject Nkenda project Mbarara-Nkenda andMputa/Hoima- and activitiesofUETCL inNELSAP, The roles andresponsibilities, functions BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
33 VALUE FOR MONEY AUDIT REPORT 34 VALUE FOR MONEY AUDIT REPORT Housing andUrbanDevelopment Source: OAG analysis of the correspondences between UETCL and CG Appendix IV:DelaybyCG Project Tororo Okolong landin block claim onclassroom secondary school Katerema 220kv Mbarara-Mirama tea estate and Tilda Kakira, Tamteco institutions like Claims commercial MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS Issue extension substation Land for block dormitory claim for the an additional submitted school has The corridor on the40m are cleared plantations before their diminution a higher owners want plantation The banana criteria additional based on should be of estates for valuation methodology that the claimed institutions Commercial V to approve valuations submitted byUETCL Submission 6 2012 2013 2 17 2013 27 nd th th th February may2013 September February Comments to block thecontractor The farmers are threatening estates allowing access to their The institutions are not claims for delay The contractor hassubmitted block thecontractor The schoolisthreatening to V in the Ministry of Lands, IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
35 VALUE FOR MONEY AUDIT REPORT 36 VALUE FOR MONEY AUDIT REPORT MARCH 2015 COMPANY LIMITED –(UETCL) BY UGANDA ELECTRICITY TRANSMISSION IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS IMPLEMENTATION OFTRANSMISSION LINEINFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED –(UETCL) MARCH 2015
37 VALUE FOR MONEY AUDIT REPORT OFFICEOFFICE OF OF THE THE AUDITOR GENERAL GENERAL
P.O. Box 7083, Kampala. Tel. +256 414 344 340 Fax: +256 417 336 000 E-mail: [email protected] www.oag,go.ug