MBARARA– Mbarara City Council has warned Multiplex Limited that it stands to be fined Shs 2.3 billion after the construction company failed to beat the deadline for the completion of major roads in the city.
According to the city clerk, Assy Abirebe, on May 18, 2021, central government awarded a joint venture admeasure contract to Multiplex Limited 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]. They cost government a total of Shs 23bln under the Uganda Support to Municipal Infrastructure Development [USMID] project at a contract period of one year.
According to Abirebe, the contract was supposed to end in April 2022. However, the contractor failed to beat the deadline and was given a double extension up to March 28, 2023.
During a council sitting on Thursday, the councillors were shocked after they were told the road works were stuck at 79 percent even after the extension of the contract period.
“We had given him from January-March and March is almost concluding, almost left with two weeks we want to know how far he has moved given the duration of the time,” Ben Twahirwa, a councilor said.
Mbarara City mayor, Robert Mugabe Kakyebezi said the contractor is very slow with his work. “Over this Multiplex issue, it is true the speed is slow that he cannot be given more money,” he said.
Abirebe explained, “Normally, in the contract, there is a provision that if you [the contractor] don’t complete the work within the stated time and the cause is you the contractor, there is what we call liquidated damages and every day you spend without completing, you are charged a certain percentage. I think in this case it is 0.05.”
He says that within 100 days, the contractor is charged a penalty rate of 0.05 percent as part of the remedy for the liquidated damages.
“This means that every day we shall be charging him Shs 23 million and now for 100 days it means the contractor will have to forego Shs 2.3 bln,” Abirebe said.
He adds that after 100 days of liquidated damages, the contractor automatically exits the project and the council gets another person to complete the road works.
Muhammad Byansi, councilor Mbarara City South warned city officials not to rush to evoke the contract, saying the company could seek court redress.
“You see parliament hasn’t approved the supplementary budget meaning that the contractor hasn’t been paid all his money which may take us to court and may end up attaching some of our property if we lose the case,” Muhammad said.
However, Abirebe says the issue relates to the capacity of the contractor and has nothing to do with council since the contractor’s last certificate was paid in December 2022.
He said the contractor is incapable of finishing the works thus advising the government to take the immediate course of action after the expiry of the contract period.
“If it is a contractor who has capacity, he can even start the work, finish, and demand his monies at the end. At the completion day if there is no money to pay him, then he can take us to court,” said Abirebe
According to the city clerk, Multiplex Construction Company has also delayed USMID road works in Kabale and Ntungamo.
Efforts to get comments from Multiplex Limited were futile s no official responded to our telephone calls.
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