A consortium of Chinese contractors has written to the Minister of Energy and Mineral Development (MEMD) Irene Muloni, complaining about flaws in the bidders’ selection process for the construction of the multi-billion dollar oil refinery in Uganda.
View the protest letter below
Winner of Refinery Project to Sue Government (2)
The letter dated August 8, 2017 and signed by Lv Weidong, on behalf of Guangzhou DongSong Energy Group Co.Ltd., refers to press reports in Ugandan media indicating that the DongSong-CPPEC consortium comprising five Chinese companies had written to MEMD indicating that it had pulled out of the Uganda Refinery project.
Last week The Independent, a weekly magazine and The Daily Monitor newspaper carried reports about the withdrawal of the CPPEC consortium that includes Guangzhou DongSong Energy Group Co.Ltd; Guangdong Silk Road Fund; China Africa Fund for Industrial Cooperation; China Petroleum Engineering and Construction Company and East China Design Institute, allegedly due to misunderstandings in the Consortium.
‘We refer to press statements in “The Independent” newspaper of July 28 and “The Daily Monitor” newspaper of August 07, 2017, wherein it is claimed that (i) Guangzhou DongSong Energy Group Co.Ltd; (ii) Guangdong Silk Road Fund; (iii) China Africa Fund for Industrial Cooperation; (iv) China Petroleum Engineering and (v) Construction Company and East China Design Institute (the DongSong-CPPEC consortium) pulled out of the Uganda Refinery project,’ Weidong wrote to Minister Muloni.
He added: ‘The authors of the above press reports claim they are privy to information from the Ministry of Energy and Mineral Development (MEMD) that the DongSong-CPPEC Consortium’s withdrawal from the Uganda Refinery process was due to a letter by CPPEC withdrawing from the selection process due to disagreements in the Consortium’.
The ‘protest and clarification’ by Weidong letter is copied to among others the Prime Minister, the Attorney General, the State Minister for Energy and Mineral Development, the MEMD Permanent Secretary and the Managing Director of the National Oil Company.
Further, Weidong referred Eng. Muloni to a June 8, 2017 letter in which the consortium sought clarification from the ministry as to whether the Government of Uganda (GoU) had ‘a preferred and alternate bidder for the Refinery Project’, following reports the GoU had ‘selected’ a rival competitor to effect the project.
In the letter Weidong, who said the reports indicate the DongSong-CPPEC Consortium was the best appraised bidder with 88.3%, added that the consortium is disturbed by the press reports which indicate that the GoU had ‘selected’ a group, the Albertine Graben Refinery Consortium to develop the refinery project.
Mr. Weidong further blamed government for engaging in ‘parallel negotiations’ with other consortia, and also makes reference to the due diligence process, saying his consortium satisfied all the criteria asked for by government, including the US$100 million ‘pre-FID funds’ obtained from the Industrial and Commercial Bank of China.
‘We are surprised and disturbed by the reports claiming that the DongSong CPPEC consortium withdrew from the selection process due to disagreements in the consortium. These claims are not true. None of our letters indicated the withdrawal of CPPEC or the Consortium from the selection process,’ Weidong wrote.
In conclusion, Weidong says should the press reports turn out to be true, the DongSong-CPPEC consortium would seek redress.
‘Please note that the Consortium reserves the to challenge the procurement process leading to the selection of any other Consortium, given that it is now clear that the DongSong-CPPEC consortium was appraised as the best bidder’ Weidong added.