Construction of Karuma dam started in 2013. By the end of 2024, it would have been constructed for over 10 years. PHOTO | FILE
In December 1995, a group of Norwegians scouting for investment opportunities in Uganda’s energy sector were presented with a rough plan to build a hydropower dam at Karuma on the River Nile.
The project, and another upstream at Bujagali near Jinja, had been highlighted in an hydropower development masterplan developed by the British consultancy firm, Kennedy & Donkin Power Ltd.
The Milton Obote government had first hired the firm in 1983 to advise on refurbishment of the 150-megawatt Nalubaale dam commissioned 29 years earlier. That dam had achieved its full installed capacity in 1968, powering pockets of industrialisation particularly in Jinja. However, the political and economic instability of 1971-1986 left it half functional with output of only 60MW.
With a loan from the World Bank, the Museveni government that took power in 1986 restored and refurbished the dam and raised installed capacity to 180MW. Eventually, a new 200MW plant, Kiira, would be built adjacent and commissioned in 2003.
Kennedy & Donkin Power Ltd was re-engaged in 1988 and pointed to further potential sites on the River Nile at Karuma and Bujagali.
“Remember at the time the economy had just been liberalised, there was relative peace, and generally the economy was growing,” recalled Fredrick Kabagambe-Kaliisa, who was permanent secretary of the Energy ministry from 1997 to 2016. “Demand was rising fast with the growth of more industries. We needed an urgent plan.”
He added: “We started promoting both projects as private sector investments but the challenge was that Karuma was a bit slow in terms of attracting investments. On the other hand, the promoters of Bujagali were aggressive.”
By mid-1996, the government had signed a $450 million agreement with US power giant AES Corporation to develop Bujagali. In March the same year, the first designs for Karuma were presented to President Museveni.
In 1997, a consortium of Norwegian companies incorporated in Uganda as Norpak Power Ltd sought to develop a 200MW plant at Karuma. The project ran into a multitude of problems, however, forcing the Norwegians to walk away from it in 2008.
Blackouts
Bujagali, on the other hand, was also mired in controversy and allegations of corruption. Meanwhile, rising demand for electricity as the economy recovered soon caught up with available supply.
“Remember from 2004 we experienced the worst drought that lasted up to 2007,” Mr Kaliisa recalled. “The Owen Falls dam was greatly affected. Bujagali development had collapsed earlier, and we didn’t have a project we were fast-tracking. Industries were closing and power was being rationed so I remember around 2005 with guidance of the President we came up with short term measures, including using energy saving bulbs, to avert the crisis.”
In September 2009, the Ministry of Energy hired Indian consultancy Energy Infratech PVT, to undertake a detailed feasibility study, designs and prepare tender documents with plans of developing the dam from the public purse. “We wanted to develop the project on our own,” recalled Paul Mubiru, the former director for Energy in the ministry.
The procurement process commenced in September 2010, when the ministry advertised the invitation to pre-qualify for the construction of Karuma HPP. According to documents seen by Daily Monitor, 98 companies bought the pre-qualification documents from the ministry.
Of these, 28 firms submitted documents and nine were pre-qualified, but the process soon took a different turn.
“I remember one day in 2011 we were summoned to State House, and on reaching there we found a certain gentleman called Claudio who made a presentation, and it was impressive,” Mr Mubiru told this newspaper. “He said that Karuma could generate 600MW by digging deeper and harnessing the water flow, but of course it was an expensive venture. We were then told to go and look at the prospect.”
In July 2011, Energy Infratech presented to the government various options looking at different capacities and their pros and cons finally leading to the final selection of the option giving 600 MW. Between 2011 and 2013, the Karuma project was rocked by corruption claims and investigations by the Inspector General of Government and court cases and injunctions.
In March 2013 President Museveni travelled to South Africa for Brazil, Russia, India, China and South Africa (BRICS) summit, where he met his Chinese counterpart Xi Jinping and agreed on financing for the project.
Canary in coal mine
In June 2013, Sinohydro Corporation Ltd emerged as the EPC contractor and signed a MoU with the government. To placate CIWE, which threatened legal action over procurement irregularities, which allegations nearly scuttled the Chinese loan, the government offered the firm a contract to build the 183 MW Isimba Dam downstream from Bujagali and upstream from Karuma.
In August 2013 President Museveni broke ground for the construction project. About 85 percent or $1.4bn (Shs5.2 trillion) was a loan from the Export–Import (EXIM) Bank of China, and 15 percent or $253m (Shs933billion) was government counterpart financing.
The EPC tender also included three transmission lines and substations: the 248km Karuma – Kawanda 400kV line, 55km Karuma – Olwiyo 400kV line, and 75km Karuma –Lira 132kV line. About 1,146 acres of land were required for the project.
Four years after construction, reports emerged of multiple defects with the plant leading to back-to-back investigations. The probe reports by Ugandan experts illuminated concerns about the quality of works and structural integrity of the dam supposed to last 100 years.
The reports of defective works intensified dogfights between the Ministry of Energy led by Mr Kaliisa and his team on one hand, and Uganda Electricity Generation Company Ltd led by its board chairperson Dr Stephen Isabalija and CEO Harrison Mutikanga on the other. The discussions on the defects straddled beyond the engineering field to rub on bilateral relations between Kampala and Beijing.
President Museveni as a result booted the lead technical team in the ministry including Kaliisa, Mubiru, and Henry Bisagala, the project coordinator. Kaliisa was replaced by Dr Isabalija who was fired seven months later over several reasons, including poor supervision of Karuma.
In August 2016, President Museveni tapped Dr Badru Kiggundu, who was winding up his tenure at the Electoral Commission, to lead the steering committee for supervision of both Karuma and Isimba dams.
“Many of you young people don’t know that I used to teach civil engineering at Makerere University where the President got me to head the EC,” Dr Kiggundu recalled. “So, one day he called me and said I took you away from what you studied but now I want to take you back.”
11 years of construction
Dr Kiggundu said the issues arising were compounded by the poor working relationship between the ministry technocrats and UEGCL honcho. The same is reinforced by five key people involved in the project, interviewed by this newspaper.
In March 2023 synchronisation of the first 100MW from Karuma to the national grid was achieved. This was followed by a roadmap for synchronisation of the remaining three generation units, which was achieved by June 2024. In August, the ministry started issuing certificates of completion for various aspects.
The initial completion timeline for the Karuma HPP was 60 months ending December 2018. However, on account of fixing the reported snags and later the Covid-19 lockdowns, the project was extended by another 60 months.
After commissioning today, Sinohydro Corporation will stay on for another five years of the defects liability period to fix the remaining snags. The company is supervised by AF-Consult Switzerland.
“A project is a triple constraint of resources, time and scope, and in there when you combine all these you should be able to produce a quality project. Our challenges on Karuma are in all these three,” argued Mr Emmanuel Nsubuga Sande, the ministry’s project coordinator.
While the project cost of $1.688b has not changed, Mr Sande revealed the delays increased the cost of supervision by the consultants; first Energy Infratech, which was booted in 2017, and currently AF-Consult Switzerland to stay on board until 2029.
Some sources this newspaper talked to called for an audit into the supervision costs spent on independent supervising consultants.
