Indian Company Faulted for Poor Implementation of Rwanda Energy Project

Overseas Infrastructure Alliance Private men at work

Rwanda Parliament has tasked government to follow up and possibly take punitive measures on an Indian company that failed to deliver rural electrification project.

The recommendation came out during an evaluation of impact of the first Scaling Up Energy Access Project (SEAP I) conducted by a parliamentary committee on foreign affairs, cooperation and security which indicated that delivery of the project was not successful as earlier expected.

Two contractors- Angelique International and Overseas Infrastructure Alliance Private were contracted after Rwanda and the African Development Bank (AfDB) had signed a 7-year-SEAP1 agreement in 2013 at a tune of $38,4million.

This deal was supposed to feed into the then, rural electrification target of 70 per cent of Rwandan homes by 2017.

The financing which comprised a loan of $23.4 million and $17.9 million grant was to be used to roll out electricity across the country.

Angelique International Ltd was offered $11.2million for districts of Nyabihu, Rulindo, Gicumbi, Ngorerero while Overseas Infrastructure Alliance Ltd got  $9,9million for districts of Rusizi, Karongi and Nyamaseke.

Committee chairperson Fidel Rwigamba said that in areas where Angelique International was assigned, the money was put to good use, unlike the areas that were assigned to Overseas Infrastructure Alliance.

“Overseas Infrastructure Alliance never abided by the project timeline. In some areas where this contractor was assigned we found electricity poles lying idle for years in bushes and equipment rusting,” said Rwigamba said.

For these failures, Overseas Infrastructure Alliance was fined $1.2million as a result of not being able to meet the contract requirements in time.

However, after finding them, their contract was renewed with expectations that they would learn from the mistakes and deliver to the expectation.

However, they still kept the low pace while citizen continued to complain that they could see equipment lying idle while they needed electricity to develop their neighbourhoods.

“In consultation with the infrastructure ministry, we finally decided to withdraw the contract and handover the remaining work to Rwanda Energy Group (REG) and at least $1million was saved on the project’s budget which will be used to finish the job,” Rwigamba said.

MPs said the company should have been suspended even much earlier.

“How will this Indian company be held accountable?” MP Christine Muhongayire asked.

MP Marie Claire Uwumuremyi wondered why 67% was paid to Overseas Infrastructure Alliance that failed and demanded if the 33% balance will be able to complete the remaining part.

The committee said that the issue of value for taxpayers’ money and loss caused by the Indian company will be followed up by another competent authority.

“We are still doing an inventory to see loss caused by Oversees infrastructure alliance and how much balance can be given to them and how REG will complete the job, but visibly we see that a good job was done elsewhere,” said MP Rwigamba.

In the report, the committee also showed that there were areas where 67 residents were not compensated after being expropriated.

This, as documented in the report, was attributed to the failure of local leaders getting involved in the implementation process as a result of lack of knowledge on the whole project.

Going by the above argument, MPs wondered why SEAP1 failed in three districts yet in other districts it did well.

So far, $24,4million (73%) has been used in SEAP 1which will end in 2020, but MPs wondered if its implementation was good enough to compel the government to seek funding for SEAP2- which has already been approved in parliament.

The committee said that the donor (AfDB) was impressed by the accountability and procedures in implementing the loan agreement and willing to fund again, but also made recommendations to resolve the citizen compensation concerns by September 2019.

 




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