IGG, AG disagree on paying contractor for Mbarara, Kabale roads
MBARARA, October 10, 2023 – The Deputy Inspector of Government Patricia Achan Okiria has directed Mbarara City town clerk to pay construction company Multiplex Ltd. Shs 3 billion for the finished road works on Victor Bwana Road.
On May 18, 2021, Mbarara City awarded a joint venture admeasure contract to Multiplex Ltd. and Ditaco International Trade to construct three roads in Mbarara City.
The three roads are Major Victor Bwana [0.95Km], Galt Road [0.65Km], and Stanley Road [0.78Km]. The roads are to cost the government Shs 23bln through the Uganda Support to Municipal Infrastructure Development [USMID] project.
According to Mbarara City town clerk, Assy Abirebe Tumwesigire, the contract period was only one year but the three roads have so far stalled for two years.
Tumwesigire said that since April 2022, the contractor has failed to rehabilitate USMID-AF (cluster 6) roads in Mbarara City, thus the city town clerk enforced the force majeure.
“Normally if you don’t complete within the stated time and the cause is the contractor, there is what we call liquidated cost and every day you spend without completing you are charged a certain percentage I think in this case it is 0.5 so Multiplex is subjected to Shs 10 million per day,” said Tumwesigire.
However, in a letter dated August 10, 2023, the Deputy IGG Okiria directed Mbarara City council to stop charging liquidated damages on Multiplex Ltd.
She further directed the city town clerk to pay the contractor’s claim worth Shs 3,142,871,293 as per the admeasurement contract whereby they should pay the contractor for completed road works.
“Despite the above explicitly directives this office has received allegations that on 21st June 2023, the contractor submitted to the project manager a claim for payment of Shs 2,233,472,869 which has not been paid to date. And on 16th August 2023, another claim for payment of Shs 909,398,424 was submitted but has also not been paid to date. The deputy inspector of government direct you to promptly pay the contractor’s genuine claims for work done so as to leverage the liquidity problems,” Okiria explained.
She added that, “Any actions contrary to the directives tends to frustrate implementation of the project and amounts to disobedience which is an offence as prescribed under section 14[4] of the IGG Act, 2022 that states.”
“Any person, who willfully and unlawfully refuses to comply with an order issued under this section, commits an offence and is liable on conviction, to a fine not exceeding 150 currency points or imprisonment not exceeding three years or bot” reads part of the letter
Also the town clerk Kabale Municipal Council wrote to the Attorney General seeking for legal guidance on how to proceed with the elapsed contract between Kabale Municipal Council and Multiplex Ltd. for the rehabilitation of Bwankosya road [0.76kms], Bushekwire road [0.34kms] and Rushoroza road [2.49kms] in Kabale Municipality at a contract sum of Shs 21,722,477,257.
Kabale Municipal Council entered into the contract with Multiplex Ltd. on March 3, 2021 for a period of one year commencing on May 27, 2021 but the contractor failed to complete the road works in time which forced the town clerk to terminate the contract.
The contractor then raised the complaint to the IGG, claiming that the employer had failed to meet part of its contractual obligation in time but instead threatened to charge the contractor with liquidated damages and subsequently terminate the contract.
In response, the IGG issued a directive halting the charging of the liquidated damages and termination of the contract as well as giving the contractor two months to complete the work.
“We are in receipt of a letter dated September 12, 2023, from the town clerk Kabale Municipal Council, wherein the Municipal Council is seeking for advice on how to implement parallel directives for matters under adjudication,” Kiryowa.
He said the contract expired and the employer can automatically terminate the contract in the absence of further extension after March 27, 2023.
He added that Kabale Municipal Council should enforce the performance bond since the contractor has failed to fulfil its contractual obligations.
“Accordingly, Kabale Municipal Council is at liberty to continue to charge the liquidity damages as per the terms of the contract. Similarly the directive of the IGG cannot extend of revive the contract that has elapsed either by its own terms or by operation of the law,” Kiryowa said.
https://thecooperator.news/mbarara-woman-seeks-shs-30mln-from-multiplex-company/
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