Uganda has accused foreign companies of sabotaging the planned Karuma hydropower project, which will be critical to solving the perennial power problems in the East African country.

A top government official says the foreign companies are responsible for the delays dogging the construction of the $1.3-billion plant as they make it difficult to appoint a contractor through court injunctions.

The plant, which will have capacity to generate 700 MW, is one of the high-priority projects in Uganda’s National Development Plan and is touted as the ultimate solution to the country’s persistent energy problems.

“We want to embark on the construction of the plant as soon as possible, but we must obey court decisions and follow the law in selecting the contractor,” says Energy Ministry acting permanent secretary Paul Mubiru.

He adds that some of the companies frustrating the tendering process have not been shortlisted.

Uganda had planned to embark on construction of the plant in mid-2012, but procuring a contractor has proved difficult, with losing bidders contesting the awarding of the contract in court.

Late last year, Italian company Salini Construttori filed an application in the Ugandan High Court, claiming irregularities in awarding the contract to China Water & Electric Corporation.

Salini filed the application on the basis that it was unfairly dropped from bidding because the Uganda government preferred either the Chinese firm or Perlite Construction Corporation, of Iran.

This prompted the court to nullify the tendering process and order a fresh evaluation of bids submitted by all prequalified bidders. The court also ordered that a new evaluation committee be constituted for the new process.

Salini is not new to controversy in the Eastern African region, where it is involved in divisive projects in Ethiopia, including the Gibe III hydropower plant and the Grand Millennium dam.

According to Mubiru, the new committee that has been evaluating the bids has now completed the technical evaluation and is set to embark on the financial evaluation before announcing the winner.

“A team of highly competent experts has completed the technical evaluation process and we are moving to the next procurement stage,” he says.

Uganda is hoping construction of the plant will start in the second quarter of this year.

The controversy surrounding the tendering process is the latest in a series of hurdles that have plagued the project since it was conceived five years ago.

Early last year, financiers of the project raised concerns over the project’s design and capacity as well as the feasibility study.

According to the financiers, which include the Germany Development Bank, the World Bank and the European Investment Bank, the water flow at Karuma cannot sustain a 700 MW plant. They want the capacity to be scaled down to between 400 MW and 450 MW.

They also contend that the feasibility study undertaken by Energy Infratech did not comprehensively capture the project’s com- plex technical, financial and environmental issues.

Despite these hurdles, Uganda is determined to implement the project to address energy problems and propel economic growth.

Currently, the landlocked country has an installed electricity generation capacity of 300 MW, compared with total demand of 445 MW. Only 5% of the country’s 30-million people have access to electricity.

Peak demand is growing at an average rate of 10% a year, which means Uganda must commission at least 50 MW a year to avoid load-shedding.