implementation of transmission line infrastructure projects · office of the auditor general the...

V A L U E F O R M O N E Y A U D I T R E P O R T

MARCH 2015

T H E R E P U B L I C O F U G A N D A

OFFICE OF THE AUDITOR GENERAL

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED


T H E R E P U B L I C O F U G A N D A

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED – (UETCL)

V A L U E F O R M O N E Y A U D I T R E P O R T

MARCH 2015

AUDITOR GENERAL’S MESSAGE

AUDITOR GENERAL’S MESSAGE

31st March 2015

The Rt. Hon. Speaker of ParliamentParliament of UgandaKampala

REPORT OF THE AUDITOR GENERAL ON IMPLEMENTATION OF TRANSMISSION

LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSION

COMPANY LIMITED

In accordance with Article 163 (3) of the Constitution, I hereby submit my report on the audit undertaken on Implementation of Transmission Line Infrastructure Projects by Uganda Electricity Transmission Company Limited.

My office intends to carry out a follow – up at an appropriate time regarding actions taken in relation to the recommendations in this report.

I would like to thank my staff who undertook this audit and the staff of Uganda Electricity Transmission Company Limited for the assistance offered to my staff during the period of the audit.

John F. S. MuwangaAUDITOR GENERAL

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M A R C H 2 0 1 5IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSIONCOMPANY LIMITED – (UETCL)

TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................. iii

CHAPTER ONE ............................................................................................................... 1

INTRODUCTION ............................................................................................................. 1

1.1. BACKGROUND ......................................................................................................2

1.2. MOTIVATION .......................................................................................................2

1.3. DESCRIPTION OF THE AUDIT AREA ..................................................................3

1.4 AUDIT OBJECTIVES ...........................................................................................7

1.5 SCOPE ................................................................................................................7

CHAPTER TWO .............................................................................................................. 9

2.0 AUDIT METHODOLOGY ......................................................................................9

2.1 SAMPLING .........................................................................................................9

2.2 DATA COLLECTION METHODS ..........................................................................9

CHAPTER THREE ......................................................................................................... 11

3.0 SYSTEM AND PROCESS DESCRIPTION ..........................................................12

3.1 ROLES AND RESPONSIBILITIES OF KEY PLAYERS .......................................12

3.2 PROCESS DESCRIPTION .................................................................................13

CHAPTER FOUR ........................................................................................................... 14

4.0 FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ................................15

4.1 PROGRESS OF WORKS ....................................................................................15

4.2 ASSESSMENT OF WORKS EXECUTED ...........................................................21

4.3 SUPERVISION AND MONITORING OF PROJECT WORKS ..............................23

4.4 RESETTLEMENT OF PROJECT AFFECTED PERSONS ...................................25

4.5 WAY LEAVES INFORMATION SYSTEM (WIS) ....................................................27

GLOSSARY OF TERMS ..................................................................................................29

Appendix I: Organization Structure of UETCL. .............................................................30

Appendix II: Documents reviewed ................................................................................31

Appendix III: Interviews conducted ..............................................................................33

Appendix IV: Delay by CGV to approve valuations submitted by UETCL .......................34

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M A R C H 2 0 1 5 iIMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

BY UGANDA ELECTRICITY TRANSMISSIONCOMPANY LIMITED – (UETCL)

LIST OF TABLES, FIGURES AND PICTURES

Table 1: Project Objectives ................................................................................................4

Table 2: Funding of UETCL projects under implementation ...........................................6

Table 3: Planned execution period and progress /status of implementation ......... 15-16

Table 4: Proportions of PAPs so far paid and %age acquired ................................. 17-18

Table 5: Execution of RAP implementation ....................................................................18

Table 6: Donor and GoU disbursements ........................................................................19

Table 7: RAP funds release by MEMD to UETCL ...........................................................20

Table 8: Comparison of tower spans against provided tower schedules .....................22

Table 9: Comparison of quantities executed against works certified ..................... 22-23

Table 10 Progress of contract signed between M/s Lamba and UETCL for construction of resettlement houses under RAP ...........................................26

LIST OF FIGURES

Figure 1: Project initiation, implementation and maintenance process ........................13

Picture 1: Demolitions at Mbarara North substation .......................................................24

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M A R C H 2 0 1 5iiIMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSIONCOMPANY LIMITED – (UETCL)

LIST OF ACRONYMS AND ABBREVIATIONS

AFD French Development Agency

AfDF Africa Development Fund

AP Angle Point

CGV Chief Government Valuer

EPC Engineering Procurement and Construction

GoU Government of Uganda

JBIC Japanese Bank for International Cooperation

NELSAP Nile Equatorial Lakes Subsidiary Action Plan

NEMA National Environment Management Authority

NFA National Forest Authority

PAPs Project Affected Persons

PID Project Implementation Department

RAP Resettlement Action Plan

ROW Right of Way

UETCL Uganda Electricity Transmission Company Limited

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M A R C H 2 0 1 5 iiiIMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS


EXECUTIVE SUMMARY

Transmission lines provide infrastructure that is used to evacuate high voltage power from generation plants to the national grid for eventual use by consumers. The Government of Uganda established Uganda Electricity Transmission Company Limited (UETCL) to manage the high voltage transmission grid infrastructure to cope with growth in energy demand.

The Office of the Auditor General undertook a value for money audit to assess the progress of implementation of three power transmission lines construction projects: Nile Equatorial Lakes Subsidiary Action Plan (NELSAP), Mbarara-Nkenda/Tororo-Lira and Mputa/Hoima-Fort-Portal-Nkenda projects, implemented by UETCL.

KEY FINDINGS

Progress of worksThe implementation of all the three projects was behind schedule, with the Mputa/Hoima – Nkenda line, scheduled to start in 2008, not yet commenced almost seven (7) years later. All Engineering, Procurement and Construction (EPC) contractors had already submitted requests for extensions of contract periods, ranging between eight (8) and eleven (11) months, which will lead to resource overruns. The delays were caused by delays in acquisition of land (Right of Way), the long lapse of time between conducting of the feasibility studies and actual compensation of project affected persons, diversion of RAP funds and expiry of consultancy contracts.

As a result of the delays, Kabalega mini hydro power plant was operating at idle capacity (generating less power than installed capacity) which cost UETCL USD 3m as compensation for unevacuated power (deemed energy) over the period from December 2012 to July 2014. The delays will also lead to cost overruns due to contract time extensions, low absorption of funds and an idle substation (Fort Portal) upon completion under the Mbarara –Nkenda/ Tororo/Lira transmission line projects.

Assessment of works executedIt was established from a technical assessment of the civil, electrical and mechanical works so far undertaken by March 2015 that the works were generally done in accordance with the agreed designs and specifications for the five (5) contracts.

Supervision and monitoringUETCL entered into two contracts to the tune of Euros 3,959,238 with consultants for the project management and supervision of the construction of two transmission line projects of NELSAP & Mbarara/Nkenda & Tororo-Lira.

From a review of the consultants’ contracts and field inspections, it was observed that:

The design of the contract created a possibility of the consultant being paid up to 60% of the consultancy contract amount even where there was either no or minimal progress of the construction works. For example by the time of audit, the consultant for NELSAP had

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M A R C H 2 0 1 5ivIMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS BY UGANDA ELECTRICITY TRANSMISSIONCOMPANY LIMITED – (UETCL)

been paid 60% of the contract price yet the progress of construction was reported as 34%, 16% and 15% for Lots A, B and C respectively.

Additionally, where the consultant contract period expires and the consultant opts not to renew the contract, UETCL stands a risk of losing the payments made upfront.

Due to staff constraints, members of the monitoring unit also doubled as project managers implying that the same persons involved in contract management also performed the monitoring function. Not only does this breed conflict of interest but it could lead to work overload which may compromise quality of supervision and reporting.

Way leaves Information SystemTo address the challenge of documentation, storage and retrieval of information relating to transmission line corridors, UETCL spent USD 658,031 to design, develop and implement a Way leaves Information System. The system was piloted for Resettlement Action Plan (RAP) under Bujagali Interconnection Project but could not capture all the required RAP data for other projects because of failure to undertake a comprehensive needs assessment. This prompted engagement of additional consultancy services at USD 67,146 to make improvements on the system.

RECOMMENDATIONSi. The acquisition of right of way should be expedited to allow the contractors access

to the corridor. This will require engaging Project Affected Persons (PAPs), Chief Government Valuer (CGV) and district local governments to have the challenges involving land disputes and compensation addressed. In future, proper planning should be undertaken to ensure that the acquisition of land is done before engagement of contractors.

ii. In future, UETCL should ensure that the Transmission line consultancy contracts are both lump sum and time-based to effectively monitor consultants’ inputs. This would also enable UETCL match consultancy payments to construction works

iii. The capacity of the monitoring unit should be strengthened to cope with the increasing number of projects and investments being undertaken by UETCL.

iv. UETCL should ensure that a comprehensive needs assessment is undertaken and also properly supervise the service provider to ensure the full realisation of the expected functionality of the Way leaves Information System.

OvERALL AUDIT CONCLUSION Whereas the civil, electrical and mechanical works were generally in accordance with the agreed designs and specifications, the progress of the projects was behind schedule which impacted on the timely attainment of the project objectives. This was caused by delayed acquisition of right of way, the long lapse of time between conducting of the feasibility studies and actual compensation of project affected persons and diversion of RAP funds. Weaknesses in supervision and monitoring of works are also likely to impact on quality and timely execution of the project works. Whereas interventions were made to acquire a Way leaves Information System (WIS) that would facilitate processing of PAP files, it was not rolled out to all projects. The failure to operationalize WIS could not guarantee timely processing of RAP compensations.

CHAPTER ONE

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M A R C H 2 0 1 5 1IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS


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CHAPTER ONE

INTRODUCTION

1.1. BACKGROUNDAccess to electricity is important for development due to its linkages to agriculture, education and health. Limited access and use of energy significantly slows down economic and social transformation1. Transmission lines provide infrastructure that is used to evacuate high voltage power from generation plants to the national grid for eventual use by consumers. The Government of Uganda established Uganda Electricity Transmission Company Limited (UETCL) to manage the high voltage transmission grid infrastructure to cope with growth in energy demand.

1.2. MOTIvATIONThe energy sector was identified as a priority sector in Uganda as laid in the National Development Plan (2010/2011-2014/2015). Accordingly, the Government of Uganda (GoU), with the support of development partners prioritized investments in the country’s electricity sector, to strengthen and expand transmission capacity in order to meet the energy needs of the country. Specifically, the rehabilitation and upgrade of the transmission system is a key focus of the government electricity sector strategy. To address the challenge of limited access to the grid, power shortages and thereby enhance industrial and business growth, Government made significant investments of UGX 192.6billion and UGX 319.8 billion towards the implementation of transmission interconnection lines during 2012/2013 and 2013/2014 respectively.

Despite such government interventions, Uganda’s electricity consumption was reported at 90kWh per capita (2012), which is significantly lower than the average consumption in Africa of 578kWh and the world average of 2,752 kWh per capita2. The national electrification rate was reported at 16% for the 32 million population (growing at the rate of 3.2%, 2009) which is below the sub Saharan average of 27.2%3. The low coverage of the transmission grid hampers the implementation of government programs for instance, rural electrification and renewable energy projects among others4. Biomass accounts for 92% of the total energy consumed in Uganda, mainly from wood which has serious environmental effects5.

Inadequate energy infrastructure has been identified as a major constraint to accessing electricity. Improving access and use of electricity requires increasing both the geographical coverage of the grid and the number of households connected to it6.

1Civil Society Alternative Proposals to the National Budget Framework Paper – FY 2010/20112National Development Plan 2010/11- 2014/15 (page 149 & 151).3UETCL’s Corporate Business Plan (2014-2018), Paragraph 4.1 (page 18).4UETCL’s Corporate Business Plan (2014-2018), Paragraph 4.6.4 (page 26).5National Development Plan (2010/2011-2014/2015) page 149.6National Development Plan 2010/11- 2014/15 [page 151, 152(xii) & 153].

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7Daily Monitor, Monday, October 14, 20138Daily monitor of 27th March 2012.

Media reported cases of Government delays to upgrade the 132-kilovolt Hoima-Nkenda transmission line to 220kV and its associated substation of Hoima.

As a result, power consumers in the districts of Hoima, Kibaale, Kyenjojo, Kabarole and Kasese districts experienced more power outages. There were also reports of plants operating at excess capacity. For example, the generated energy at Kabalega Hydro Power Plant in Hoima District cannot be fully evacuated to the national grid with the available infrastructure there by exposing GoU to deemed energy claims.7

In addition, communities in the six districts of Jinja, Mayuge, Bugiri, Iganga, Tororo and Mbarara, whose land and property was affected by the proposed power projects, raised complaints regarding the compensation process.8

It is against this background that an independent assessment of the implementation of transmission lines projects was undertaken to identify the performance gaps, possible causes and suggest recommendations to enhance projects execution.

1.3. DESCRIPTION OF THE AUDIT AREA

1.3.1 General DescriptionFollowing the unbundling of the Uganda Electricity Board (UEB), three (3) successor independent companies wholly owned by the Government of Uganda were created, namely: the Uganda Electricity Generation Company Ltd (UEGCL) for generation; the Uganda Electricity Transmission Company Limited (UETCL) for transmission; and the Uganda Electricity Distribution Company Limited (UEDCL), for distribution.

UETCL is a public limited company which was incorporated on 26th March 2001. The Company operates under policy guidance of the Ministry of Energy and Mineral Development (MEMD) and its operations are supervised by an independent agency- Electricity Regulatory Authority (ERA).

UETCL is the implementing agency for the establishment of high voltage electricity transmission lines with capacities above 33kV in Uganda. Actual implementation of the projects is carried out by Engineering, Procurement and Construction (EPC) contractors under the supervision of UETCL engineers, supervising consultants and donor supervision missions.

1.3.2 Mandate Uganda Electricity Transmission Company Limited (UETCL) is mandated by the Electricity Act, 1999 Cap 145 to:

• own and operate the High Voltage Transmission Grid (HVTG) above 33kV

• coordinate the power system to achieve balance between supply and demand

• manage bulk power purchases and sales (single buyer)

• Export and import power in Uganda.

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1.3.3. Objectives of UETCL Transmission ProjectsUETCL is currently implementing three transmission line projects whose objectives are as described in Table 1 below:

Table 1: Project Objectives

Project name Project objectives

Bujagali - Tororo - 127.7km, 220kV and Mbarara - Mirama – 66 km, 220 kV transmission lines and associated substations

To improve access to electricity in Nile Equatorial Lakes countries through increased regional grid interconnection for power trade and improvement of security of supply.

Mbarara - Nkenda - 160 km, 132 kV and Tororo-Lira – 260 km, 132 kV transmission lines and associated substations

To provide a high voltage backbone between Mbarara and the mid-western towns.

To improve reliability, availability and quality of power to the western, eastern and northern region of Uganda.

To replace wooden poles along Tororo – Lira line that are prone to fires and other natural hazards with steel tower structures to reduce the operational costs associated with wooden structures.

Mputa/Hoima - Fort Portal- Nkenda – 273 km, 220kV Transmission Line Project

To meet the energy needs of the Ugandan population through improved power supply quality and security by providing adequate transmission infrastructure for the social and economic development in the project area. To provide adequate transmission capacity to evacuate power generated at Mputa power plant and provision of hydro/thermal generation mix to mitigate hydrological risks and emergency conditions.

1.3.4 Project outputs

Bujagali - Tororo - 127.7km, 220kV and Mbarara - Mirama - 66km, 220 kV transmission lines and associated substations

• A constructed, tested, commissioned and fully operational 220kV Bujagali-Tororo- Lessos (Uganda part), double circuit, double conductor power transmission line (approximately127.7km) on self-supported steel lattice towers and associated bays at Tororo substation.

• A constructed, tested, commissioned and fully operational 220kV Mbarara-Mirama- Birembo (Uganda part), double circuit, double conductor power transmission line (approximately 66 km) on self-supported steel lattice towers and transformer stations at Mbarara North and new transformer station at Mirama sub station.

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Mbarara - Nkenda - 160 km, 132 kV and Tororo-Lira - 260km, 132 kV transmission lines and associated substations

A constructed, tested, commissioned and fully operational 132kV Mbarara - Nkenda double circuit, single conductor power transmission line (approximately 160 km) on self-supported steel lattice towers and (monopoles used across Queen Elizabeth National Park) and substation extension at Mbarara and Nkenda in (Kasese).

A constructed, tested, commissioned and fully operational 132kV Tororo-Lira double circuit, single conductor power transmission line (approximately 260 km) on self-supported steel lattice towers and substation extension at Tororo, Opuyo & Lira substations.

A constructed, tested, commissioned and fully operational new transformer substation in Fort Portal.

Mputa/Hoima - Fort Portal- Nkenda - 220kV Transmission Line Project and associated sub stations.

• A constructed, tested, commissioned and fully operational Mputa – Fort Portal 220 kV transmission line (approx. 172km), Fort Portal – Nkenda (approx. 54km).

• A constructed, tested, commissioned and fully operational Mputa – Hoima 132 kV transmission line (approx. 73 km)

• A constructed, tested, commissioned and fully operational new transformer substation at Hoima substation.

1.3.5 Organisational structureUETCL is governed by a Board of Directors and has a Managing Director/Chief Executive Officer (CEO) who is responsible for the administrative function. The CEO is assisted by Deputy Chief Executive Officer (DCEO) and eight (8) heads of departments/managers. The structure also has the Project Implementing Unit (PIU) headed by a Project Coordinator who reports to the Manager Project Implementation. Details of the Organisation structure are shown in Appendix 1.

1.3.6. Funding

The three transmission line projects and associated sub-stations were partly financed by government and development partners. For the period 2010 to 2014, the amounts budgeted and released to the three projects are summarised in Table 2 below:

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Tabl

e 2:

Fun

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of U

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Buj

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2366

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27,5

69

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917,

721,

804

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1.4 AUDIT OBJECTIvESThe overall audit objective was to evaluate the progress of construction of power transmission lines and the implementation of mitigation measures.

The specific audit objectives were:

i) To assess whether the contracts for the construction of power transmission lines were executed as per planned timelines, work plans, loan agreements and contract terms.

ii) To assess whether the contracts for the construction of power transmission lines were executed as per agreed designs and Specification of Works.

iii) To assess the extent to which supervision and monitoring arrangements facilitated effective implementation of the construction projects.

iv) To assess whether Resettlement Action Plan (RAP) activities were properly planned and implemented to facilitate timely acquisition of the corridors and implementation of the planned mitigation measures.

1.5 SCOPEThe focus of the audit was on three transmission line projects implemented by the Projects Implementation Department of UETCL over a period of five (5) calendar years (2010 – 2014) – that is:

• Mbarara-Mirama/Bujagali-Tororo under NELSAP,

• Mbarara – Nkenda/Tororo-Lira and associated substations,

• Mputa/Hoima-Nkenda,

• Substations of Mbarara, Mirama, Bujagali and Tororo.

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2CHAPTER TWO

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CHAPTER TWO

2.0 AUDIT METHODOLOGYThe audit was conducted in accordance with the International Organisation of Supreme Audit Institutions Auditing Standards and the Office of the Auditor General (OAG) VFM audit manual. The standards require that the audit is planned in a manner which ensures that an audit of high quality is carried out in an economic, efficient and timely manner.

2.1 SAMPLINGOut of the eleven projects under implementation by UETCL, three (3) projects of Bujagali - Tororo /Mbarara–Mirama; Mbarara – Nkenda / Tororo – Lira and Mputa/Hoima – Nkenda were selected for the audit together with their associated substations. The three were selected because they had achieved substantial progress in terms of implementation while the rest (8) were still at the inception stage.

2.2 DATA COLLECTION METHODSThe study relied upon document review, interviews, questionnaires, and physical inspections to obtain necessary information to guide execution of the audit including:

To assess whether the contracts for the construction of power transmission lines were executed as per planned timelines, work plans, loan agreements and contract terms

Interviews were conducted with UETCL’s project engineers; Principal project engineer, Project Implementation Department (PID) Manager Engineering Procurement and Construction (EPC) contractors, supervising consultants and contractors of resettlement houses to assess the progress of implementation of the projects under review. Project management documents were reviewed to establish the agreed timelines, loan conditions, and contract execution terms.

To assess whether the contracts for the construction of power transmission lines were executed as per agreed designs and specifications

Using an Expert, a technical audit of the electrical and civil works done by the contractors was undertaken. This involved review of the contract management documents followed by field inspections with EPC, substation contractors and supervising consultants to physically verify the quality and quantity of the works done and compare with the payments made and the actual implementation schedules and status as reported in the monthly progress reports.

Photographs of tower foundations, towers erections, construction works at substation and resettlement houses sites were taken to provide evidence of status of construction works.

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Assessing the extent to which supervision and monitoring arrangements facilitated effective implementation of the construction projects

We interviewed project management personnel and consultants, and also reviewed consultancy contract agreements, consultancy monthly reports and the monitoring reports to assess the adequacy of the monitoring arrangements put in place to supervise and monitor the implementation of projects.

Assessing whether Resettlement Action Plan (RAP) activities were properly planned and implemented to facilitate timely acquisition of the corridors and implementation of the planned mitigation measures

We interviewed project implementation personnel in charge of RAP and also reviewed RAP progress reports to assess the planning and implementation of RAP activities.

Details of specific documents reviewed and persons interviewed are in appendix 2 and 3.

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CHAPTER THREE

3

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CHAPTER THREE

3.0 SYSTEM AND PROCESS DESCRIPTION

3.1 ROLES AND RESPONSIBILITIES OF KEY PLAYERS

Development PartnersThese are responsible for funding and supervising the implementation of transmission line projects. They also participate in mid-term reviews and compile project performance reports (aide-memoirs). Specifically, these include the African Development Fund and Japan Bank for International Cooperation for NELSAP; African Development Fund – for Mbarara – Nkenda/Tororo – Lira; and NORAD and French Development Agency for Mputa/Hoima interconnection.

Ministry of Finance, Planning and Economic DevelopmentThe Ministry of Finance, Planning and Economic Development (MoFPED) on behalf of government is responsible for sourcing for funds, negotiating, signing the loan agreements, reviewing and authorising the disbursement applications. It also has a monitoring unit (BMAU) which is responsible for monitoring all government projects.

Bank of Uganda (BoU)The Bank of Uganda holds the escrow account which is a special account where compensation (RAP) funds are deposited.

Ministry of Energy and Mineral DevelopmentThe Ministry of Energy and Mineral Development (MEMD) has the overall responsibility of the energy sector and therefore offers policy guidelines. The

mandate is also to establish, and promote the sustainable development of energy and mineral resources for social and economic development.

Electricity Regulatory Authority (ERA) ERA is charged with regulating the power sector activities that is issuing of power related licenses, establishment of tariff structures, development and reinforcement of performance standards within the electricity sub sector.

Uganda Electricity Transmission Company LimitedUETCL is the implementing agency of the transmission line projects on behalf of the Government of Uganda (GoU). UETCL, which is a public utility company with the mandate to own, develop and operate the High Voltage Transmission Grid (HVTG) above 33kV and issue licenses for: bulk power supply, operation of high voltage transmission grid, system operator and power import and export; is the project owner and monitors the progress of the projects.

National Environmental Management Authority (NEMA)NEMA is the national agency responsible for ensuring that project implementation activities are environmentally-friendly. It ensures that projects comply with the environmental requirements, issues clearance permits after reviewing the Environmental Social Impact Assessment (ESIA) report and guidelines on how to develop the Environmental Implementation Plan (EIP).

Ministry of Lands, Housing and Urban Development This Ministry, which is mandated to conduct title searches and issue land titles, is

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responsible for reviewing valuations of land and property to be acquired in the project corridor.

National Forestry Authority (NFA) NFA is responsible for reviewing Resettlement Action Plan (RAP) reports and issuing clearance certificates in case a forest is to be affected by the project. It signs memorandum of understanding with UETCL to carry out sustainable activities as an offset for trees cut as a result of the transmission line projects, and issues guidelines to be complied with while cutting the trees.

3.2 PROCESS DESCRIPTIONThe demand and load forecast is conducted by the planning unit of UETCL to ascertain power demand and behaviour of the existing grid. Analysis is made and appropriate interventions determined using PS/SE software. Viable projects are included in the National Development Plan (NDP) and Grid Development Plan (GDP) after identifying the funder. Feasibility study consultant is procured to conduct feasibility of ESIA and RAP. RAP implementation is conducted to ensure Right of Way (ROW) is secured before sourcing the EPC to execute the construction works. The process of project initiation, implementation and maintenance of sub stations and transmission lines is summarized in Figure 1 below.

Figure 1: Project initiation, implementation and maintenance process

Demand and load forecasts made to determine appropriate interventions

Decide whether to incorporate the project in the GDP, GIP and PIP

Seek approval of NEMA and NFA on ESIA and CGV approval on RAP report

Implement RAP Recommendations

Sign agreements and process payment

Clear sites and handover corridor to EPC contractor

Procure EPC contractor

Procure Supervising consultant

Conduct Factory Acceptance Tests (FATs) for equipment before shipping

Import equipment and embark on constructions

Monitor and evaluate the project progress of works

Make follow-ups and provide feedback to contractor and Supervisors

Certify completed works periodically

Conduct Operational Acceptance Tests (OAT) upon completion

Handover project to PID for onward submission to Operations and maintenance department

Source consultant to conduct feasibility studies of ESIA and RAP

Seek for donor funding throughMEMD and MFPED

Sign loan agreements with funder and develop PIM

Source: OAG analysis of implementation of transmission line project

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4CHAPTER FOUR

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CHAPTER FOUR

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

4.1 PROGRESS OF WORKSThe contracts signed between UETCL, consultants and the contractors, provided for contract periods ranging from 18 to 24 months for contractors and 30 months for consultants.

It was established that by March 2015, the time of audit, the contract periods for the two projects (five (5) contracts) had elapsed yet works were still on-going. Details of the progress per contract are summarised in Table 3 below.

Table 3: Planned execution period and progress /status of implementation

Project name Planned execution period Physical Progress

Project start date Project end date

NELSAP - Bujagali – Tororo 220kV (127.7Km) – Lot A

Ms Jyoti Structures Ltd

12th July 2013 12th Jan 2015 Construction period had elapsed yet physical progress was;

Lot A - 34%

Lot B – 16%

NELSAP - Mbarara – Mirama 220kV (66Km) – Lot B

Ms Jyoti Structures Ltd

12th July 2013 12th Jan 2015 Construction period had elapsed yet physical progress was 15%.

NELSAP Sub stations Lot C – – M/s Isolux

19th August 2013 12th February 2015

The EPC contractor requested for an extension of eight (8) months to end September 2015.

Supervising consultant – RSW/AECOM

08th November 2011

07th May 2014 Contract revised to 31st March 2015 yet the EPC contractor requested for an extension of 8 months to end of september 2015. This signifies need to revise the contract further to match EPC contract.

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Project name Planned execution period Physical Progress

Project start date Project end date

Tororo – Lira – Lot 1 - 132Kv (260Km)

Kalpa-Taru Transmission and Techno Electric

26th February 2013

25th January 2015

100% of the contract period elapsed yet physical progress for Tower works was reported at 86%.

Mbarara – Nkenda – Lot 2 – 132Kv (160Km)


09th April 2013 08th March 2015 100% of the contract period elapsed yet physical progress for Towers was;

Lot 2 – 76%

Sub stations


09th April 2013 08th March 2015 100% of the contract period elapsed yet Physical progress for Substations were:

Lot 1 – 0%

Lot 2 – 63%

Supervising consultant - Hifab

27th October 2010 27th June 2014 Contract revised to 08th April 2015 yet the EPC contractor requested for an extension of twelve (12) months to end January 2016. This signifies need to revise the contract further to match EPC contract.

Hoima/Mputa – Fortportal – Nkenda interconection

1st July 2008 30/6/2013 0% as construction has not kicked off. Procurement of EPC contractor

Source: OAG analysis of EPC contracts.

In one project, Hoima/Mputa, apart from carrying out some RAP activities, the project had not commenced seven (7) years after its planned commencement.

It was further noted that the Consultants and EPC Contractors had already submitted requests for extensions of contract periods by the time of audit (table 3 above). In one case, the EPC contractor requested for an extension up to January 2016 and following the contractor’s application for time extension, the consultant submitted a proposal in April 2014 requesting for an extension to match the completion date of the EPC contract; however, this extension has not been approved.

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From review of the contract management documentation and interviews with project management, it was established that the delays in the construction of the transmission lines were caused by the following:

i. Delays in land acquisition ( Right –of – Way)The contract agreements signed between UETCL and the Engineering, Procurement and Construction (EPC) contractors, required the employer (UETCL) to acquire and provide legal and full physical possession of the sites and access thereto, including all requisite Right of Ways (ROWs) prior to commencement of the EPC contract.

Audit established that all Right of Ways for the three power transmission line projects of Mbarara-Nkenda/Tororo- Lira, Bujagali-Tororo/Mbarara-Mirama and Mputa/Hoima were not completely secured prior to project commencement. EPC contractors were engaged before full acquisition of right of way. Whereas UGX 114.79bn had been disbursed for RAP compensations, securing full access of ROW remained a challenge as indicated in Table 4 below.

Table 4: Proportions of PAPs so far paid and %age acquired

Project Name

%age of paid up PAPs (December 2014)

% corridor acquired (as at December 2014)

Comments

Bujagali –Tororo (127.7km)

81.18 41% PAPs rejection of valuation rates approved by CGV, even after making a second revaluation.

Mbarara-Mirama (66km)

80 68% Land disputes amongst PAP claimants have delayed the acquisition of ROW process for example:

Tower locations AP 4/14 at •Kasenyi where the PAPs claimed that the land had a title which, however, they failed to avail to UETCL, and

Tower AP2/5 at Nyakatoni •where upon compensation another person claimed ownership of the same land.

Claims that some properties were not valued for example at tower - AP5/9 Ntungamo, the owner claimed two graves had not been compensated for.

Mbarara- Nkenda (160km)

81 78% PAPs rejection of valuation rates approved by CGV, even after making a second revaluation.

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Project Name

%age of paid up PAPs (December 2014)

% corridor acquired (as at December 2014)

Comments

Tororo-Lira (260km)

78 81% PAPs rejection of valuation rates approved by CGV, even after making efforts to revalue their properties.

Cases of hostilities by some PAPs were noted for example 44 Km (30%) from Amac to Lira was not surveyed due to hostilities.

Hoima–Nkenda (229km)

229 80% Delayed payment of PAPs and PAPs rejection of valuation rates approved by CGV, even after making efforts to revalue their properties.

Source: OAG analysis of RAP quarterly progress reports

The delay to acquire and fully provide physical possession of the Right of Way was caused by several factors, including land disputes, failure to involve Project Affected Persons (PAPs) during RAP surveys, failure by district local governments to update their valuation rates, rejection of Chief Government Valuer (CGV) valuations by PAPs, delays by CGV to approve valuations submitted by UETCL – (Appendix Iv), and rejections by PAPs arising out of time lapses between conducting valuations and actual payments as reflected in Table 5 below and delayed completion of resettlement houses for the paid up PAPs.

Table 5: Execution of RAP implementation

Project Time when RAP was concluded

Time when PAPs compensation started

Delays in PAPs Compensation (in years)

Mputa/Hoima-Nkenda

October 2007 and was revised in 2009

2010 3

Bujagali-Tororo/Mbarara-Mirama

October 2007. 2011 4

Mbarara-Nkenda/Tororo-Lira

October 2007 2011 4

Source: OAG analysis of UETCL feasibility study reports

ii. Expiry of the consultants’ contractsThe consultancy contracts for the two projects under review were planned for 30 and 32 months for RSW now AECOM and HIFAB, respectively to cater for the procurement, implementation, defects liability period and commissioning periods.

Audit established that the contracts expired before the projects were completed. This subsequently affected the approval of design and/or document submittals from the EPC contractors causing project delays.

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As a result of the delays, resource overruns will be inevitable (these have not yet been established/approved), as evidenced by both the Consultants and EPC contractors requests for extensions which may have cost implications. As an example, diversions near Kampala International University land in Ishaka and Mbarara University at the new campus along Mbarara-Nkenda transmission line has led to contractor continuous mobilisation and demobilisation and will translate into additional costs.

The delays also led to low absorptions of funds as depicted by Table 6 below.

Table 6: Donor and GoU disbursements

Project Funder of EPC

Loan amount

(Unit of currency)

Disbursed as at 31/12/2014

(Unit of currency)

Percentage release as at 31/12/2014

Tororo-Lira (Lot 1) and

Mbarara-Nkenda (Lot 2)

AfDF UA 52,510,000 UA 29,797,197 57%

Mbarara-Mirama (Lot A) and Bujagali-Tororo (Lot B)

AfDF UA 7,590,000 UA 2,362,395.23

31%

JICA JPY 5,409,000,000

JPY 1,917,721,804

35.45%

Mputa/Hoima-Nkenda

Norway – Financing transmission line

USD 52,100,000 USD 15,541,714.06

29.83%

Source: OAG analysis of donor disbursements.

Utilization of donor funding ranged from 29.8% to 57% for the three projects. The low absorption means government incurs commitment charges on funds not utilized.

Furthermore, the delay in construction of the Mputa/Hoima interconnection line has resulted in Kabalega power generating plant operating at idle capacity (unevacuated power) of 6MW meant to be sold to the national grid. This led to deemed energy claims and interest of USD 3million over the 20 months period (that is December 2012 to July 2014) which was subsequently paid.

Additionally, the Fort Portal substation which was to be powered by the Mputa/Hoima-Nkenda transmission line will be rendered idle upon its completion in March 2016 since construction of the line had not started by the conclusion of this audit (March 2015). This means that UETCL will have to incur additional costs to keep the substation running until the Mputa-Nkenda line is completed.

iii. Diversion of RAP fundsThe progress of works was further affected by the diversion of funds meant for compensation of Project Affected Persons. It was noted that UGX 7,423,089,953 meant for resettlement was diverted towards payment of customs taxes relating to construction equipment for the sub stations and transmission lines.

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Management responseThe Fort Portal substation idling was associated with changes in the plan for the Mputa/Hoima-Nkenda Transmission line as more viable oil findings were made. Government of Uganda decided to construct a bigger refinery and a 220kV transmission line that would match the anticipated capacity. The delays were exacerbated by the suspension of NORAD Funding due to the problems with the OPM scandal. These compounded evacuation requirements for the Individual Power Plants (IPPs) at Kabalega plant.

The delays associated with acquisition are acknowledged and engagements with stakeholders will continue to be done. Nevertheless delays are mostly associated with external factors which include:

•Delays associated with Central Government Valuer (CGV): The office is inadequately staffed and facilitated to handle the many on-going infrastructure projects in the country at the same time;

• The Legal framework concerning land acquisition in the country does not favour infrastructure projects.

• Delayed releases of compensation funds due to budgeting requirements. For example, compensation cannot commence for a project whose external financing has not been secured and early acquisition before the Contractors are procured is impossible.

• Rejections of compensation funds by Project Affected Persons (PAPs) due to speculation.

Audit Comment The progress of the projects was behind the planned schedules which impacted on the timely attainment of the project objectives. Even when GOU had released funds for RAP, there were still noted delays in disbursement and absorption of these funds. For example, by the time of audit GoU had released on average 68% of RAP funds which had not been fully absorbed as shown in Table 7 below.

Table 7: RAP funds release by MEMD to UETCL

Project Budget (UGX) Cumulative releases (UGX)

%age release of the budget

Bank balance as at 31st Dec. 2014 UGX)

Tororo-Lira (Lot 1) and Mbarara-Nkenda (Lot 2)

63,617,611,030 51,840,410,379 81.48 15,536,415,749

Mbarara-Mirama (Lot A) and Bujagali-Tororo (Lot B)

66,437,786,897 24,122,827,569 36 4,435,877,763

Mputa/Hoima-Nkenda

39,369,284,715 38,827,158,683 98.6

Totals 169,424,682,642 114,790,396,631

Source: OAG analysis of GoU releases schedules

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Recommendations• The acquisition of right of way should be expedited to allow the contractors access

to the corridor. This will require engaging PAPs, Chief Government Valuer (CGV) and district local governments to have the challenges involving land disputes and compensation addressed.

• UETCL should consult with the responsible authorities regarding their perceived inadequacies in the legal framework for land acquisition.

• In future, proper planning should be undertaken to ensure that acquisition of land is done immediately after securing external financing but before engagement of contractors.

• UETCL should consider timely implementation of Resettlement Action Plan to avoid disputes relating to land valuations.

• Consultancy contracts should be reviewed in a timely manner to allow approval of designs and supervision.

4.2 ASSESSMENT OF WORKS EXECUTEDThe contracts UETCL entered into with the EPC contractors required that the works be executed in accordance with the approved designs and contract specifications. These detailed the quality and quantity requirements for the civil, electrical and mechanical works to be executed.

4.2.1 Quality of worksThe EPC contractors prepared designs which were approved by the consultants and the employer (UETCL). The designs depended on ground conditions and the specified materials as per the EPC contract. We carried out tests to confirm whether the materials used met the specifications as per the contract in terms of quality and capacity. The following were observed:

i. ConductorsAccording to the contracts, the contractor for Mbarara – Nkenda, Tororo – Lira transmission lines was to use AAAC Sycamore conductors (132 kV) while that of Bujagali – Tororo, Mbarara – Mirama transmission line was to use ACSR Hawk conductors (220 kV).

For both lines the conductors were found to be of the designed/planned quality with the capacity to transmit the current associated with the planned power for both current and future usage without upgrades.

ii. Concrete used for foundationsAccording to the employer’s requirements, the contractors were required to design the concrete strengths for the various uses ranging from blinding, small to large foundations. The designed concrete strengths, approved by both the consultant and employer, ranged from C10 for blinding to C30 for large foundations.

During the audit, we assessed the concrete cube test results from the Central Materials Laboratory (CML) for the various foundations done by the contractors at various sites. The results revealed that the concrete strengths for foundations varied from C15 to C30.These concrete strengths conformed to designs as approved by the consultants and employer.

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iii. Span of towersA tower span is the distance between two consecutive towers and is determined in the field after conducting a route profile and considering the conductor ground clearance and maximum conductor sag. The contractor is required to provide this information before and after construction.

The towers were randomly sampled and their spans checked. The spans were compared with tower spans reported by the contractor in the tower schedules as indicated in Table 8 below and it was noted that the checked tower spans compared well with the design and reported spans.

Table 8: Comparison of tower spans against provided tower schedules

S/N Project name Towers checked

Audit span (m)

Design span (m) Remarks

1 Tororo–Lira (Lot 1)

46/A and 46/0

202.9 Not available Tower schedule not submitted

2 Mbarara–Nkenda(Lot 2)

8/0 and 8/1 360.95 360.92 Ok

3 Bujagali–Tororo(Lot A)

11/9 and 11/10

365 360 Ok

4 Mbarara – Mirama (Lot B)

2/9 and 2/10

354.5 352.4 Ok

Source: OAG analysis of tower span field data and tower schedules

4.2.2 Quantity verificationPayments for foundation and erected towers

Payment certificates relating to the works executed on the 3 projects were reviewed to compare the quantities executed and those certified and the results of assessment are shown in Table 9 below. The quantities certified compared well with the quantities so far executed.

Table 9: Comparison of quantities executed against works certified

S/N Projects Certified works as at December 2014

Executed works as at Dec 2014

Remarks

Foundations cast

Tower erected

Foundations cast

Tower erected

1 Tororo – Lira (Lot 1)

503 430 503 430 Okay

2 Mbarara – Nkenda (Lot 2)

270 223 270 223 Okay

3 Bujagali – Tororo (Lot A)

226 203 226 203 Okay

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S/N Projects Certified works as at December 2014

Executed works as at Dec 2014

Remarks

Foundations cast

Tower erected

Foundations cast

Tower erected

4 Mbarara – Mirama (Lot B)

109 33 109 33 Okay

Source: OAG analysis of payment certificates

Management responseManagement acknowledges the findings as detailed above.

Audit Comment On the basis of the verifications undertaken, the civil, electrical and mechanical works relating to the sample of contracts reviewed as at March 2015 were generally in accordance with the agreed designs and specifications. There is need for a final verification on completion and commissioning.

4.3 SUPERvISION AND MONITORING OF PROJECT WORKS

4.3.1 Contract supervisionUETCL entered into two contracts to the tune of Euros 3,959,238 with consultants for the project management and supervision of the construction of two transmission line projects of NELSAP & Mbarara/Nkenda & Tororo-Lira.

From a review of the consultants’ contract and field inspections, the following were noted:

• The supervising consultant contracts provided for 20% payment on commencement, 20% on signing of EPC contracts, 20% on submission and approval of the mid-term review report, 10% on submission and approval of pre commissioning report, 20% on submission of commissioning report and acceptance tests and 10% on submission and final approval of commissioning report. This created a possibility of the consultant being paid up to 60% of the consultancy contract amount even where there was either no or minimal progress of the construction works.. For example by the time of audit, the consultant for NELSAP had been paid 60% of the contract price yet the progress of construction was reported as 34%, 16% and 15% for Lots A, B and C respectively.

• Additionally, where the consultant contract period expires and the consultant opts not to renew the contract, UETCL stands a risk of losing the payments made upfront.

• For the ‘Field’ based activities, there was on average one supervising consultant on site for both transmission line and substation works yet several constructions were being implemented at the same time such as foundation excavations, tower erections and substation works in different locations. This was partly attributed to the fact that more staff input time was allocated for ‘home’ based activities which were being performed at the company headquarters in Canada with less field visits to construction sites.

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As a result of inadequate field staff, the supervising consultant was unable to identify defective works in time. For example, defective channel works at Mbarara North substation as shown in the Picture 1 below was identified by the UETCL team rather than the supervising Consultant.

Picture 1 Demolitions at Mbarara North substation

Source: OAG site visits

Management response The consultants` contracts are designed in phases and include milestones to be achieved against which payments are effected. These include tendering phase, and supervision phase.

40% of the contract payments include advance payments (20%) which are made for mobilization of intellectual resources and participation of the consultants during tendering stages (20%) of the EPC contracts. These were duly achieved. The remaining 60% is payable during supervision phase out of which only 20% has so far been paid out. The dual contract types (Lump sum and Time based), is already being used in other on-going contracts.

For the Field based activities, not all site activities require the continuous presence of engineers. Supervision has mainly focused on the critical activities, with subsequent activities not allowed to proceed without the clearance of the supervising team following a quality checklist.

In order to boost supervision on site, UETCL requested the consultant for a proposal for enhanced supervision. The proposal was submitted to the Financier but it was rejected. As an intervention, UETCL deputed its O & M staff to the field to assist in the supervision.

Part of the channel demolished at Mbarara North substation extension due to shoddy civil works

Foundation columns at Mbarara North substation demolished and rebuilt due to shoddy civil works

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Audit Comment The design of the supervising consultancy contracts exposes UETCL to a risk of financial loss in the event of failure by the Consultant to perform.

RecommendationUETCL is advised to roll out the dual contracts types (Lump sum and Time based) to all upcoming projects to match consultancy payments to construction works.

4.3.2 Monitoring by UETCLUETCL has a unit responsible for monitoring implementation of projects on a quarterly basis.

Through interviews, management indicated that due to staff constraint, members of the monitoring unit also doubled as project managers implying that the same persons involved in contract management also performed the monitoring function. Not only does this breed conflict of interest but it could lead to work overload which may compromise quality of supervision and reporting.

Management ResponseA monitoring unit was established to deal with the increased number of Projects in UETCL. However, the unit is still growing in capacity to independently monitor projects as desired. Quarterly reports have been produced and are available.

Due to human resource shortages in the company imposed by ERA`s regulatory budget limits, the dual role of Project Manager and Monitoring is necessary as an intervention to manage the shortcoming.

Audit CommentIn light of the increasing number of projects implemented by UETCL, it is important that the monitoring function is strengthened to make it more effective.

RecommendationThe capacity of the monitoring unit should be strengthened to cope with the increasing number of projects.

4.4 RESETTLEMENT OF PROJECT AFFECTED PERSONSUETCL was to construct houses for vulnerable groups namely (the elderly, disabled and children led families) to ensure timely intervention of constructing resettlement houses and clearance of corridor.

In 2011, UETCL signed contracts with Lamba Enterprise to construct 145 houses at a cost of UGX 8.099bn for Mbarara –Nkenda (50 houses) and Hoima-Nkenda (95 houses)

However, in 2013, the contractor’s accounts were frozen and could not proceed with works. At the time of abandoning site, the status of works was as indicated in Table 10:

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Table 10: Progress of contract signed between M/s Lamba and UETCL for construction of resettlement houses under RAP

Project name

Date of signing the contract

Parties to the contract

Contract sum (UGX)

Remarks Status of contract execution at the time of abandoning site.

Mbarara-Nkenda

12th, September, 2011

UETCL and LAMBA Enterprises Limited

2,799,226,565 Fifty (50) houses each valued at UGX. 55,984,531 were to be constructed for a period of 12 months.

22 main houses, kitchen, pit latrine and bathroom on Mbarara-Nkenda Line in the districts of Mbarara, Bushenyi, Rubirizi, Sheema, Ishaka, were incomplete while 28 units had not taken off.

Hoima/ Mputa -Nkenda

28th ,March, 2011

UETCL and LAMBA Enterprises

5,300,000,000 Ninety-five (95) resettlement houses at a cost of UGX. 55,789,474 for a period of 12 months in the districts of Hoima, Kibale and Kabalore where the line traverses.

59 houses completed and handed over with defects,28 sites were incomplete while 8 had not taken off.

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Following the abandonment of the site, UETCL conducted an evaluation to ascertain the status and value of outstanding works. It was noted that there was an overstatement of the value of works executed that led to over payment of UGX 41,877,402 and UGX 242,925,021 for resettlement houses under Mbarara-Nkenda and Nkenda-Hoima projects respectively.

Management responseThe observation is noted. The unrecovered advances to the contractor was due to his contract expiring. This coincided with the freezing of the contractor’s accounts and therefore he could not renew the advance/performance payment guarantees. UETCL sued the Contractor for recovery of the reconciled amounts and the case is not yet decided

Audit Comment UETCL did not provide evidence that the matter is before court hence the risk of loss is still apparent.

Recommendation UETCL should closely follow up the recovery of funds in accordance with the provisions of the contract.

4.5 WAY LEAvES INFORMATION SYSTEM (WIS)UETCL engaged a vendor at USD 658,031 to design, develop and implement a Way leaves Information System with document and expense management and compensation management modules. This was aimed at minimizing the volumes of paper work used in handling PAPs files to improve efficiency.

The system was piloted for RAP under Bujagali Interconnection Project but could not capture all the required data for other projects. This prompted engagement of additional consultancy services at USD 67,146 to make improvements on the

system. Because of inadequacies in the system, UETCL still faces a challenge of documentation and storage of information relating to transmission line corridors.

The review of the system indicated that the failure to operationalize the system was caused by inadequate needs assessment undertaken during planning. At the planning stage, UETCL should have undertaken a comprehensive needs assessment that would capture all system requirements to meet user needs.

Management responseIt should be noted that the procurement under audit was a re-tender of reduced scope after a failed procurement that was abandoned due to budget constraints. The initial procurement had TORs that were all round and covered the entire scope for both existing and upcoming projects. Upon failing to identify appropriate funding, the technical department (IT) was requested to reduce scope and instead specify a pilot based system implementation based on BIP.

The new support contract is meant to cater for scenarios/requirements that were far different from the BIP and any such required enhancements that may come up from time to time.

Audit Comment Whereas the scope of the initial contract was scaled down, UETCL should have developed clear and comprehensive Terms of Reference (TORs) that would guide the provider to develop an all-round system.

RecommendationUETCL should ensure that a comprehensive needs assessment is undertaken and also properly supervise the service provider to ensure the full realisation of the expected functionality of the system.

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OVERALL AUDIT CONCLUSION Whereas the civil, electrical and mechanical works were generally in accordance with the agreed designs and specifications, the progress of the projects was behind schedule which impacted on the timely attainment of the project objectives. This was caused by delayed acquisition of right of way, the long lapse of time between conducting of the feasibility studies and actual compensation of project affected persons and diversion of RAP funds. Weaknesses in supervision and monitoring of works are also likely to impact on quality and timely execution of the project works. Whereas interventions were made to acquire a Way leaves Information System (WIS) that would facilitate processing of PAP files, it was not rolled out to all projects. The failure to operationalize WIS could not guarantee timely processing of RAP compensations.

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GLOSSARY OF TERMS

volt - is a measurement of electromotive force in electricity.

Kilo volt - Unit of potential energy equal to a thousand volts

Transmission Towers – These are the most visible component of the power transmission system. Their function is to keep the high-voltage conductors (power lines) separated from their surroundings and from each other. A variety of tower designs exist that generally employ an open lattice work or a monopole, but generally they are very tall (a 500 kV tower might be 150 feet tall with cross arms as much as 100 feet wide), metal structures.

Substations – Devices used to convert very high voltages used for electric transmission to lower voltage for consumer use. Substations vary in size and configuration but may cover several acres; they are cleared of vegetation and typically surfaced with gravel. They are normally fenced, and are reached by a permanent access road. In general, substations include a variety of structures, conductors, fencing, lighting, and other features that result in an “industrial” appearance.

Right Of Way (ROW) - The right of way for a transmission corridor includes land set aside for the transmission line and associated facilities, needed to facilitate maintenance, and to avoid risk of fires and other accidents. It provides a safety margin between the high-voltage lines and surrounding structures and vegetation. Some vegetation clearing may be needed for safety and/or access reasons. A ROW generally consists of native vegetation or plants selected for favorable growth patterns (slow growth and low mature heights). However, in some cases, access roads constitute a portion of the ROW and provide more convenient access for repair and inspection vehicles. The width of a ROW varies depending on the voltage rating of the line from 50 feet to approximately 175 feet.

Hydro-electric - Hydro means water and Hydro-electric means making electricity from water.

Compensation - Payment in cash or in kind at replacement value for an asset or affected resource by the project that is acquired at the time of securing the corridor.

EPC contract – This is a contract where the contract works involve Engineering, Procurement and Construction.

KiloWatt Hour (kWH) - Unit of measure of current used.

Project Affected Person (PAP) - Any person who, as a result of the implementation of the Project, loses the right to own, use or benefit from a built structure, land (residential, agricultural, pasture or undeveloped/unused land), annual or perennial crops and trees, or any other fixed or moveable asset, either in full or in part, permanently or temporarily.

Deemed Capacity - The maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer.

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APPENDICES

Appendix I: Organization Structure of UETCL.

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Appendix II: Documents reviewed

Document Purpose(s) of Review - To ascertain:-

NELSAP, Mbarara-Nkenda and Mputa/Hoima-Nkeda Resettlement and Community Development Action Plan/ Livelihood Restoration Plan (LRP)

The Compesation and resettlement procedures.

Electricity Act, Land Act, NFA and NEMA Acts

UETCL’s mandate, Legislation on land acquisition and use; compensations; forests and environmental mitigation measures

Loan agreements with African Development Bank (ADB), Japan Bank for International Cooperation (JBIC), Norwegian Development Agency (NORAD), African Development Fund (AfDF) & French Agency for Development (AFD)

Financing terms and conditions

Grid Development Plan (GDP)/Grid Investment Plan (GIP)

Whether the projects under study were included in the GDP/GIP

Apraisal document for NELSAP, Mbarara-Nkenda and Mputa/Hoima-Nkenda

The project appraisal recommendations and risks

Aide memoire for all the funders on the three projects

The respective financiers’ assesment of the progress of the three projects under study

Monthly and quarterly performance reports

Progress of work for each project under study

M&E quarterly reports Challenges faced by the project, recommendations made for improvement and whether follow ups are made and reported on

Minutes of management meetings Resolutions of management about the three projects covered by the audit

Environmental mitigation and monitoring plan; Contractors’ social and environmental action plan; Waste management plan and Social and environmental action plan framework

Environmental protection measures established by the contractors of the projects under study

RAP for NELSAP, Mbarara-Nkenda and Mputa/Hoima

Resettlement and compesation plans, PAPs for each project, compansated and outstanding. Further analysis will be made on PAPs outstanding to establish causes for refuting compensation packages

Project implementation plan for NELSAP, Mbarara-Nkenda and Mputa/Hoima interconnection projects.

Implementation procedures

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Document Purpose(s) of Review - To ascertain:-

Project audited accounts if any for the years under review.

The funding of the project and its performance over the years

Rules of Procedure for procurement of goods, services and use of Consultants.

The rules and guidelines for procurement of goods, services and consultancy

Ministerial policy statements for MEMD (years under review)

How transmission line project activities are budgeted for and integrated into the overall Ministerial programs

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Appendix III: Interviews conducted

Unit Designation Purpose of the Interviews

To ascertain/get:-

Management of UETCL

Manager Project implementation

Principal Environment officer

Executive OfficerDeputy Executive OfficerManager planning and investment

• The roles and responsibilities, functions and activities of UETCL in NELSAP, Mbarara-Nkenda and Mputa/Hoima-Nkenda project

• The other stakeholders in the project and what role they play

• The resources (inputs) for activities of the project implementation and the expected results (output) from the activities performed

• How are the project deliverables measured

• Progress of works for the three projects under study

• Challenges in the implementation of the project and way forward

Principal Accountant The funds flow, receipts and disbursement process, the total funding to the project so far and challenges in the implementation of the project and way forward.

(3) Engineers for NELSAP, Mbarara-Nkenda/Tororo-Lira and Mputa/Hoima projects respectively

Status of works on all the three projects and their associated sub-stations, challenges faced and way forward

MEMD Commissioner transmission lines – MEMD

The roles and responsibilities, functions and activities of MEMD in NELSAP, Mbarara-Nkenda and Mputa/Hoima-Nkenda interconnection projects

Management of EPC contractors, Supervising consultants & contractors of PAP houses under RAP

2 – Contractors and 1 – suppervisor

Status of works on tower, monopoles and sub-stations, challenges faced and way forward

A sample of PAPs yet to be paid (6) Existence of claimants, the un-resolved •issues with UETCL concerning their claimsSteps taken to solve their claims with •UETCL

Central Government Valuer (CGV) Average time for approving PAPs valued files submitted by UETCL

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Appendix Iv: Delay by CGv to approve valuations submitted by UETCL

Project Issue Submission Comments

Okolong land in Tororo

Land for substation extension

6th February 2013

The contractor has submitted claims for delay

Claims commercial institutions like Kakira, Tamteco tea estate and Tilda

Commercial institutions claimed that the methodology for valuation of estates should be based on additional criteria

27th February 2013

The institutions are not allowing access to their estates

Mbarara-Mirama 220kv

The banana plantation owners want a higher diminution before their plantations are cleared on the 40m corridor

17th September 2012

The farmers are threatening to block the contractor

Katerema secondary school claim on classroom block

The school has submitted an additional claim for the dormitory block

2nd may 2013 The school is threatening to block the contractor

Source: OAG analysis of the correspondences between UETCL and CGv in the Ministry of Lands, Housing and Urban Development

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OFFICE OF THE AUDITOR GENERALOFFICE OF THE AUDITOR GENERAL

P.O. Box 7083, Kampala.Tel. +256 414 344 340 Fax: +256 417 336 000

E-mail: [email protected],go.ug