Karuma: Govt to incur more costs as completion delays

Government is set to incur more costs in the ongoing construction of the 600MW Karuma Hydropower project in Kiryandongo District after the project completion timeline was extended by one more year.
This now means the country’s flagship hydropower project will not light up the country this year as earlier planned after the contractor, Sinohydro Corporation Ltd, in August requested for more time to complete the works.
The contractor cited hitches in design and engineering as well as factors beyond their control.
Uganda Electricity Generation Company Ltd (UEGCL), the project supervisor, has acknowledged that the extension will mean government incurring more costs.
Dr Harrison Mutikanga, the UEGCL chief executive officer, told journalists on Thursday during the UEGCL’s board fourth site visit to Karuma dam that they are set to engage the project consultant to assess the amount of extra costs to be incurred with the extension.

“Every extension of time comes with some little costs. We shall have to keep the project consultants on site and examine the extra costs because the details of the cost we are going to incur are not yet known,” Dr Mutikanga said.
He said the extra costs incurred will only be on operations but not the contract execution.
“The extension of time does not change the EPC contract cost, what we are going to incur will only be on operations. Extending the project completion time does not mean we are changing the design capacity of the plant, it will still at the end generate the 600MW as was designed,” Dr Mutikanga said.
In 2015, government borrowed $1.43 billion (Shs5.3 trillion) from China Exim Bank to fund the construction of Karuma Hydropower Dam.
The construction of the dam was initially set for completion in December 2018, with Uganda to repay the loan over a 20-year period, using money raised from power tariffs.
But Ms Proscovia Njuki, the UEGCL board chairperson, says the delays for completion of the hydropower plant may last up to 2020.
“Much as the progress is visible and exciting, there is still a lot of work to be done. The ongoing works on the remaining five turbines all come to completion towards the end of 2019 and may be some even spill-over to 2020,” Ms Njuki told journalists.
She said every step of the construction project comes with its own challenges and should be handled carefully.
Last month, the Parliament’s Committee on Natural Resources warned Energy ministry against extra costs once the project periods for both Karuma and Isimba Hydro power projects are extended.
“Those are taxpayers’ money that should be used in filling gaps in other needy sectors of government instead of the power project because a contractor has failed to beat the deadline,” Mr Tonny Ayoo, a member of the committee and also Kwania county MP, said.
UEGCL board of directors led by Ms Njuki were at Karuma for the routine quarterly inspection and appraisal of the project.
During the visit, the board noted considerable progress of construction and installation of electromechanical and hydromechanical equipment with an overall completion rate at 85 per cent.