Contract for the Interconnection of electric grids of Nile equatorial lakes countries (Uganda Part - Lot C) for the Contruction of substation for the interconnection of Uganda-Kenya and Uganda-Rwanda electric grids (Lot C) Contract No. UETCL/WRKS/2011/00002

Abstract

The report constitutes an independent review of the contractor's request for extension of time and prolongation cost. This document examines the delays that occurred during the construction period. It also sets out the cause of the delay and the effect on the planned sequence and timing of the contractor's activities.

UETCL awarded Isolux a Contract for the Interconnection of electric grids of Nile equatorial lakes countries (Uganda Part - Lot C) for the Contruction of substation for the interconnection of Uganda-Kenya and Uganda-Rwanda electric grids (Lot C) on 29th November 2012. The contract was to run for 18 months. effective date was 18th August 2013 and completion of works was to be effected by 18 february 2015. The sites for the works were; Tororo, Bujagali Switch Yard; Mbarara and Mirama.

The project faced significant delays and resulted into termination of the contract by the client. There were several project and contract shortfalls experienced such as; inadequate allocation of resources, inadequate skilled personnel, poor communication, poor risk management, poor schedule management, delayed approvals, delayed handover of sites, delays in the design process.

The critical factor that contributed to the failed execution of the project was a lack of a thorough due diligence during the tender stage. The contractor was awarded projects in Kenya, Uganda and Tanzania yet the contractor went into receivership shortly after that. The contractor's audited accounts shows that the company had not been profitable for several years. the contractor therefore lacked capacity to execute the contract successfully.

The key learning points are on the importance of the due diligence, how to choose the best form of contract for the project, how to manage project delays, ensuring strict adherence to contract clauses and proper project scheduling and execution.