A Turkish construction firm, M/s Polat Yol Yapi Sanayi Ve Ticaret, signed a contract with the Uganda National Roads Authority (UNRA) in November 2019 to tarmac the 92.2km route of Muyembe to Nakapiripirit. The company had already been advanced Shs 60 billion to kick start the works.
According to UNRA, the road was be completed within the 36 months as agreed in the contract terms but complaints were raised pinning the Turkish contractor for being too slow and its shoddy performance thus failing to perform and the authority decided to terminate the contract.
UNRA team led by Eng Samuel Muhoozi, the Director for Roads and Bridges Development, inspected the progress of the works on the project last year in August. During the inspection, local leaders raised a number of issues such as slow progress after engineers rated the completed works at about only three per cent as of July 2021.
Eng Mugoozi assured Ugandans no money would be lost since an advance payment worth 20 per cent of the contract sum was secured by bank guarantee so that in case of a default, the bank cashes UNRA. “So, even today if we say we are terminating this contractor, the bank will pay us that money tomorrow, So that money is secure, it’s not a loss,” he said in August.
In a ruling by the Commercial Court on 19th April 2022, Hon Lady Justice Jeanne Rwakakooko ordered DFCU bank to pay Shs 14,259,362,014 and USD 12,413,382 (approx. 44 billion) under the suit Guarantees to UNRA.
Mr. Timothy Lugayizi represented DFCU Bank Limited, Mr. Ferdinand Tumuhasie represented the 1st respondent [Turkish contractor M/s Polat Yol Yapi Sanayi Ve Ticaret] and Mr. Kenneth Mwebembazi represented the 2nd respondent [UNRA].
“The interim orders issued by this Court on 27th January, 2022 and extended on 28th February 2022 restraining the 2nd respondent from enforcing, collecting or calling on the advance payment guarantees issued by the applicant to the 2nd respondent are hereby set aside and vacated,” Justice Jeanne Rwakakooko said.
“The applicant is directed to immediately execute payment of the sums secured under the suit Guarantees, i.e. UGX 14,259,362,014 and USD 12,413,382 to the 2nd respondent as earlier directed and pursuant to the Demand Letter dated 18th January 2022,” she ruled.
“Each party shall bear its own coast of this application.”
Muyembe – Nakapiripirit is a national road located in the North-Eastern part of Uganda, commonly known as Karamoja region and traverses the districts of Bulambuli, Kween and Nakapiripirit.
