KAMPALA —Abuljebain Engineering Consulting Office (AECO), a Kuwait firm, which was hired to provide consultancy services for the construction of Tirinyi-Pallisa-Kumi/Pallisa-Kamonkoli road, has refused to hand over the works to Uganda National Roads Authority (UNRA) over alleged contractual breach.
The firm wants the contractor — Arab Contractors to first be taken through a number of tests before handing over road to the government and docked atleast Shs 11 billion for causing delays to the project.
In a June 9, 2022 letter to UNRA Executive Director Allan Kagina, the president of AECO, Wail K Abuljebain, disregarded the “arbitrarily directives” by the roads authority to demobilise their staff at the site and hand over the work, saying they are not issued in accordance with the rules governing the contract.
“We take note of your instructions/directives rendering our permanent staff redundant and ordering them to vacate the site, however, you should note that these directives and summons are contrary to Clause 14.1 of the SCC on the expiry of the contract. This is so because the directives and summons have the effect of arbitrarily terminating the contract before completion/end of the contractual period without just cause,” Abuljebain wrote.
The letter is also copied to President Museveni, Works Minister Gen. Katumba Wamala and the funders– the Islamic Development Bank.
Mr. Abuljebainwas responding to a June 1, 2022, letter by UNRA acting Executive Director Mary K. Kuteesa, who accused the company of “disregarding the pre-taking over site inspection of the major outstanding works (670m town roads in Kamonkoli town and 800m road section in Tirinyi town) without a genuine reason.”
According to UNRA, despite the Kuwait firm not sending an engineer, the planned inspection was undertaken on Friday 20th May 2022 by representatives from Uganda National Roads Authority (UNRA) and the Contractor, Arab Contractors.
“The Resident Engineer who had confirmed availability declined to attend the inspection at the last minute, indicating that he had been instructed by the Engineer not to attend,” Kutesa wrote.
“Based upon the inspection, we consider that all the major works that requires close supervision on the project have been completed and therefore the Engineer’s staff are redundant. The remaining minor snags identified during the inspection and any defects that may arise shall be monitored on an intermittent basis as envisaged under the Defects Liability Period (DLP) phase of the consultancy contract.
The purpose of this letter is to inform you to demobilize all the Consultant’s permanent staff from site with immediate effect as the Contractor is under no obligation to continue providing facilities to the Engineer’s permanent staff. The intermittent staff of the Engineer going forward shall be facilitated as provided for under the DLP phase of the consultancy contract,” she added.
But AECO has scoffed at the claims that it snubbed the pre-inspection, and instead said UNRA unilaterally disregarded the understanding which was reached between all the parties during the virtual meeting of 14th April 2022.
“In our letter referenced AECO/UNRA/02/TPK/PK/CLIENT/04-2022/038 dated April 29th 2022 we attached the list of tests on completion and instructed the contractor to urgently carry out the tests on both Lot 1 and Lot 2 as agreed upon during the tripartite meeting (AECO, IsDB and UNRA) as an immediately actionable point to expedite project closure,” Abuljebain said.
“However, to our shock, you have unilaterally disregarded this decision and understanding which was reached between all the parties during the virtual meeting of 14th April 2022,” the company adds.
Abuljebain said by UNRA ordering them to demobilize their staff, the roads authority is imposing itself on the company, which in total of the contract.
“From the onset, it is important to note that we are governed by a contract for the provision of services which duly sets out the rights, obligations, and duties of all the parties to it. Based on this contractual relationship between ourselves, it is not for you to issue summons and directives to our staff and thereafter claim that we disobeyed them by failing to show up. Please note that clause 2.1 of the GCC states that the relationship between the Consultant and the Employer is not that of master-servant…” the AECO president’s letter reads in part.
“We take note of your instructions/directives rendering our permanent staff redundant and ordering them to vacate the site, however, you should note that these directives and summons are contrary to Clause 14.1 of the SCC on the expiry of the contract. This is so because the directives and summons have the effect of arbitrarily terminating the contract before completion/end of the contractual period without just cause. Furthermore, your directives and summons contravene Clause 16(1) of the GCC on the amendment/modification of the terms of the contract,” he adds.
Clause 16(1) of the GCC on the amendment/modification of the terms of the contract states: “Any modification or variation of the terms and Variations conditions of this Contract, including any modification or variation of the scope of the Services, may only be made by written agreement between the Parties. However, each Party shall give due consideration to any proposals for modification or variation made by the other Party.”
“The purpose of this letter is to remind you of your obligations under the contract and advise you to recall the earlier directives which you had issued,” AECO adds.
The latest exchange further complicates the contractual fallout between the UNRA and AECO, which dates back to three years ago.
BACKGROUND
In 2019, AECO won the contract to supervise engineering designs and building works for the 111.25-kilometre Tirinyi-Pallisa-Kumi/Pallisa-Kamonkoli road project.
The Islamic Development Bank funded the Tirinyi-Pallisa-Kumi/Pallisa Kamonkoli road with a loan of Shs489 billion. Egyptian firm, Arab Contractors, won the bid as the main contractors for the two-lot project.
According to documents, AECO signed the contract with UNRA on November 16, 2019 after being declared winners through a competitive bidding procurement process.
UNRA wrote on November 7, 2019, announcing AECO’s winning bid.
But UNRA delayed to sign the contract for 16 months while construction works progressed without allowing AECO on site. It is worth noting that the Solicitor General cleared the procurement process on October 21, 2019.
On December 26, 2019, AECO Director Wail Abuljbain wrote to UNRA, protesting the delay. He demanded that UNRA allows his company to start work but was ignored until mid-March, 2021. When they got on site, AECO found UNRA engineers had already done the supervision work and were asked to just approve it, a request the Kuwait firm declined.
That set off the ugly conflict between UNRA and AECO, with the latter seeking the attention of President Museveni to resolve it. However, the two parties have not reached any agreement despite the President’s directive to the UNRA boss to find an amicable solution.
In one of its previous correspondences, UNRA argued that the Tirinyi-Pallisa-Kumi /Pallisa-Kamonkoli road is considered the ‘smoothest in Uganda, with an international roughness index averaging 1.3 m/km.
Therefore, the country’s roads agency said its engineers demonstrated they can deliver and they did not want to undermine such by allowing AECO to tarnish the achievement.
It is worth noting that UNRA and AECO also fell out on almost similar grounds on the Masindi Kisanja-Tangi-Paraa-Buliisa road, one of the oil roads in the country’s mineral-rich Graben region.
In November 2018, UNRA awarded the supervising contract to AECO, with China Communications Construction Company Limited (CCCC), as the main contractor for the 159-kilometre road, which is nearing completion soon.
In almost similar fashion, the working relationship between UNRA and AECO soared over supervision and altered road designs. This culminated into UNRA terminating AECO’s contract on August 19, 2020.
UNRA replaced AECO with PROME Consultants, a local firm, which had earlier been sub-contracted by the Kuwait firm as their local partners on the project.
In the termination letter, UNRA stated that AECO failed to mobilize staff, make monthly reports and refused to approve the contractor (CCCC)’s submissions and instructions in time, among others. AECO dismissed all UNRA’s reasons as lies, and petitioned President Museveni.
In the end, AECO, through their lawyers, OSH Advocates and Kampala Associated Advocates filed a claim amounting to $ 5 million before the arbitration panel and the hearing is ongoing.
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