Uganda Transmission Line Projects Progress Audit

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
VALUE FOR MONEY AUDIT REPORT

MARCH 2015
OFFICE OF THE
AUDITOR GENERAL
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 – (UETCL)

MARCH 2015
AUDITOR GENERAL’S
MESSAGE
AUDITOR GENERAL’S MESSAGE
31st March 2015
The Rt. Hon. Speaker of Parliament

Parliament of Uganda
Kampala
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. Muwanga
AUDITOR GENERAL
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
IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

MARCH 2015 BY UGANDA ELECTRICITY TRANSMISSION
COMPANY 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

BY UGANDA ELECTRICITY TRANSMISSION MARCH 2015 i
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

ii MARCH 2015 BY UGANDA ELECTRICITY TRANSMISSION
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 works
The 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 executed

It 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 monitoring

UETCL 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

BY UGANDA ELECTRICITY TRANSMISSION MARCH 2015 iii
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 System

To 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.
RECOMMENDATIONS
i. 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.

iv MARCH 2015 BY UGANDA ELECTRICITY TRANSMISSION
1
CHAPTER ONE

BY UGANDA ELECTRICITY TRANSMISSION MARCH 2015 1
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND
Access 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. MOTIVATION
The 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.
1
Civil Society Alternative Proposals to the National Budget Framework Paper – FY 2010/2011
2
National Development Plan 2010/11- 2014/15 (page 149 & 151).
3
UETCL’s Corporate Business Plan (2014-2018), Paragraph 4.1 (page 18).
4
UETCL’s Corporate Business Plan (2014-2018), Paragraph 4.6.4 (page 26).
5
National Development Plan (2010/2011-2014/2015) page 149.
6
National Development Plan 2010/11- 2014/15 [page 151, 152(xii) & 153].

2 MARCH 2015 BY UGANDA ELECTRICITY TRANSMISSION
Media reported cases of Government UETCL is a public limited company which
delays to upgrade the 132-kilovolt Hoima- was incorporated on 26th March 2001. The
Nkenda transmission line to 220kV and its Company operates under policy guidance
associated substation of Hoima. of the Ministry of Energy and Mineral
Development (MEMD) and its operations
As a result, power consumers in the districts
are supervised by an independent agency-
of Hoima, Kibaale, Kyenjojo, Kabarole and
Electricity Regulatory Authority (ERA).
Kasese districts experienced more power
outages. There were also reports of plants UETCL is the implementing agency for the
operating at excess capacity. For example, establishment of high voltage electricity
the generated energy at Kabalega Hydro transmission lines with capacities above
Power Plant in Hoima District cannot be 33kV in Uganda. Actual implementation of
fully evacuated to the national grid with the the projects is carried out by Engineering,
available infrastructure there by exposing Procurement and Construction (EPC)
GoU to deemed energy claims.7 contractors under the supervision of
UETCL engineers, supervising consultants
In addition, communities in the six districts
and donor supervision missions.
of Jinja, Mayuge, Bugiri, Iganga, Tororo
and Mbarara, whose land and property
was affected by the proposed power 1.3.2 Mandate
projects, raised complaints regarding the Uganda Electricity Transmission Company
compensation process.8 Limited (UETCL) is mandated by the
Electricity Act, 1999 Cap 145 to:
It is against this background that
an independent assessment of the • own and operate the High Voltage
implementation of transmission lines Transmission Grid (HVTG) above
projects was undertaken to identify the 33kV
performance gaps, possible causes and • coordinate the power system to
suggest recommendations to enhance achieve balance between supply and
projects execution. demand
• manage bulk power purchases and
1.3. DESCRIPTION OF THE AUDIT sales (single buyer)
AREA • Export and import power in Uganda.
1.3.1 General Description

Following 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.
7
Daily Monitor, Monday, October 14, 2013
8
Daily monitor of 27th March 2012.

1.3.3. Objectives of UETCL Transmission Projects
UETCL 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 To improve access to electricity in Nile
and Mbarara - Mirama – 66 km, 220 Equatorial Lakes countries through increased
kV transmission lines and associated regional grid interconnection for power trade
substations and improvement of security of supply.
Mbarara - Nkenda - 160 km, 132 kV To provide a high voltage backbone between
and Tororo-Lira – 260 km, 132 kV Mbarara and the mid-western towns.
transmission lines and associated
To improve reliability, availability and quality of
substations
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 To meet the energy needs of the Ugandan
– 273 km, 220kV Transmission Line population through improved power supply
Project 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.

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 structure

UETCL 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:

6
Table 2: Funding of UETCL projects under implementation

Project Classification Donor funding GoU co-funding – RAP – UGX
name
MARCH 2015
Funder Currency Budgeted Actual Budgeted Actual release
disbursements
Bujagali– Regional AfDF UA 7,590,000 2,362,395.23 66,437,786,897 24,122,827,569
Tororo – power trade JBIC JPY 5,409,000,000 1,917,721,804
(127.7Km)
/Mbarara

– Mirama –
66km)
BY UGANDA ELECTRICITY TRANSMISSION

Mbarara- Grid re- AfDF UA 52,510,000 29,797,197 63,617,611,030 51,840,410,379
Nkenda investment
(160Km) projects /
/ Tororo- Systems
Opuyo-Lira extension

(260Km)
Mputa/ Power NORAD NOK 300,000,000 101,571,532.75 39,369,284,715 38,827,158,683
Hoima evacuation AFD US$ 23,000,000 3,000,000
–Fortportal project
- Nkenda
TOTAL 169,424,682,642 114,790,396,631
Source: OAG analysis of release schedules to UETCL projects

1.4 AUDIT OBJECTIVES
The 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 SCOPE
The 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.

2
CHAPTER TWO

CHAPTER TWO
2.0 AUDIT METHODOLOGY

The 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 SAMPLING
Out 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 METHODS

The 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.

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.

3
CHAPTER THREE

CHAPTER THREE
3.0 SYSTEM AND PROCESS mandate is also to establish, and promote

the sustainable development of energy and
DESCRIPTION
mineral resources for social and economic
development.
3.1 ROLES AND RESPONSIBILITIES
OF KEY PLAYERS Electricity Regulatory Authority (ERA)
ERA is charged with regulating the power
Development Partners
sector activities that is issuing of power
These are responsible for funding and
related licenses, establishment of tariff
supervising the implementation of
structures, development and reinforcement
transmission line projects. They also
of performance standards within the
participate in mid-term reviews and
electricity sub sector.
compile project performance reports (aide-
memoirs). Specifically, these include the
Uganda Electricity Transmission
African Development Fund and Japan Bank
Company Limited
for International Cooperation for NELSAP;
UETCL is the implementing agency of the
African Development Fund – for Mbarara
transmission line projects on behalf of
– Nkenda/Tororo – Lira; and NORAD and
the Government of Uganda (GoU). UETCL,
French Development Agency for Mputa/
which is a public utility company with the
Hoima interconnection.
mandate to own, develop and operate the
High Voltage Transmission Grid (HVTG)
Ministry of Finance, Planning and
above 33kV and issue licenses for: bulk
Economic Development
power supply, operation of high voltage
The Ministry of Finance, Planning and
transmission grid, system operator and
Economic Development (MoFPED) on
power import and export; is the project
behalf of government is responsible for
owner and monitors the progress of the
sourcing for funds, negotiating, signing the
projects.
loan agreements, reviewing and authorising
the disbursement applications. It also
National Environmental Management
has a monitoring unit (BMAU) which is
Authority (NEMA)
responsible for monitoring all government
NEMA is the national agency responsible
projects.
for ensuring that project implementation
activities are environmentally-friendly.
Bank of Uganda (BoU)

It ensures that projects comply with the
The Bank of Uganda holds the escrow environmental requirements, issues
account which is a special account where clearance permits after reviewing the
compensation (RAP) funds are deposited. Environmental Social Impact Assessment
(ESIA) report and guidelines on how to
Ministry of Energy and Mineral develop the Environmental Implementation
Development Plan (EIP).
The Ministry of Energy and Mineral
Development (MEMD) has the overall Ministry of Lands, Housing and Urban
responsibility of the energy sector and Development
therefore offers policy guidelines. The This Ministry, which is mandated to conduct
title searches and issue land titles, is

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 DESCRIPTION

The 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
Source consultant to conduct feasibility studies of ESIA and RAP
Seek approval of NEMA and NFA on ESIA and CGV approval on RAP report
Implement RAP Recommendations Seek for donor funding through

MEMD and MFPED
Sign agreements and process payment Sign loan agreements with funder and
develop PIM
Procure Supervising consultant
Clear sites and handover corridor to Procure EPC contractor

EPC contractor
Conduct Factory Acceptance Tests (FATs) for equipment before shipping
Import equipment and embark on constructions
Certify completed works Monitor and evaluate the project progress of

periodically works
Conduct Operational Make follow-ups and provide feedback to

Acceptance Tests (OAT) upon
contractor and Supervisors
completion
Handover project to PID for onward submission to Operations and maintenance

department
Source: OAG analysis of implementation of transmission line project

4
CHAPTER FOUR

CHAPTER FOUR
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
4.1 PROGRESS OF WORKS

The 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 12th July 2013 12th Jan 2015 Construction period
– Tororo 220kV had elapsed yet
(127.7Km) – Lot A physical progress was;
Ms Jyoti Structures Lot A - 34%
Ltd
Lot B – 16%
NELSAP - Mbarara 12th July 2013 12th Jan 2015 Construction period
– Mirama 220kV had elapsed yet
(66Km) – Lot B physical progress was
15%.
Ms Jyoti Structures
Ltd
NELSAP Sub 19th August 2013 12th February The EPC contractor
stations Lot C – – 2015 requested for an
M/s Isolux extension of eight
(8) months to end
September 2015.
Supervising 08th November 07th May 2014 Contract revised to

consultant – RSW/ 2011 31st March 2015 yet
AECOM 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.

Project name Planned execution period Physical Progress
Project start date Project end date
Tororo – Lira – Lot 1 26th February 25th January 100% of the contract
- 132Kv (260Km) 2013 2015 period elapsed yet
physical progress
Kalpa-Taru
for Tower works was
Transmission and
reported at 86%.
Techno Electric
Mbarara – Nkenda 09th April 2013 08th March 2015 100% of the contract
– Lot 2 – 132Kv period elapsed yet
(160Km) physical progress for
Towers was;
Kalpa-Taru
Transmission and Lot 2 – 76%
Techno Electric
Sub stations 09th April 2013 08th March 2015 100% of the contract
period elapsed yet
Kalpa-Taru
Physical progress for
Transmission and
Substations were:
Techno Electric
Lot 1 – 0%
Lot 2 – 63%
Supervising 27th October 2010 27th June 2014 Contract revised to
consultant - Hifab 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 – 1st July 2008 30/6/2013 0% as construction
Fortportal – Nkenda has not kicked off.
interconection 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.

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 %age of paid % corridor Comments
Name up PAPs acquired (as at
(December December 2014)
2014)
Bujagali 81.18 41% PAPs rejection of valuation rates
–Tororo approved by CGV, even after
(127.7km) making a second revaluation.
Mbarara- 80 68% Land disputes amongst PAP
Mirama claimants have delayed the
(66km) 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- 81 78% PAPs rejection of valuation rates
Nkenda approved by CGV, even after
(160km) making a second revaluation.

Project %age of paid % corridor Comments
Name up PAPs acquired (as at
(December December 2014)
2014)
Tororo- 78 81% PAPs rejection of valuation rates
Lira approved by CGV, even after
(260km) 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– 229 80% Delayed payment of PAPs and
Nkenda PAPs rejection of valuation rates
(229km) 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 Time when PAPs Delays in PAPs
concluded compensation Compensation
started (in years)
Mputa/Hoima- October 2007 and 2010 3
Nkenda was revised in 2009
Bujagali-Tororo/ October 2007. 2011 4
Mbarara-Mirama
Mbarara-Nkenda/ October 2007 2011 4
Tororo-Lira
Source: OAG analysis of UETCL feasibility study reports
ii. Expiry of the consultants’ contracts

The 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.

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 Loan amount Disbursed as Percentage

EPC at 31/12/2014 release
as at
(Unit of
(Unit of 31/12/2014
currency)
currency)
Tororo-Lira (Lot AfDF UA 52,510,000 UA 29,797,197 57%
1) and
Mbarara-Nkenda
(Lot 2)
Mbarara-Mirama AfDF UA 7,590,000 UA 31%
(Lot A) and 2,362,395.23
Bujagali-Tororo
(Lot B) JICA JPY JPY 35.45%
5,409,000,000 1,917,721,804
Mputa/Hoima- Norway – USD 52,100,000 USD 29.83%
Nkenda Financing 15,541,714.06
transmission
line
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 funds

The 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.

Management response
The 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 %age Bank balance
releases (UGX) release as at 31st Dec.
of the 2014 UGX)
budget
Tororo-Lira (Lot 63,617,611,030 51,840,410,379 81.48 15,536,415,749

1) and Mbarara-
Nkenda (Lot 2)
Mbarara- 66,437,786,897 24,122,827,569 36 4,435,877,763
Mirama (Lot A)
and Bujagali-
Tororo (Lot B)
Mputa/Hoima- 39,369,284,715 38,827,158,683 98.6
Nkenda
Totals 169,424,682,642 114,790,396,631
Source: OAG analysis of GoU releases schedules

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 EXECUTED

The 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 works

The 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. Conductors
According 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 foundations

According 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.

iii. Span of towers
A 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 Audit span Design span (m) Remarks
checked (m)
1 Tororo–Lira 46/A and 202.9 Not available Tower schedule
(Lot 1) 46/0 not submitted
2 Mbarara– 8/0 and 8/1 360.95 360.92 Ok
Nkenda
(Lot 2)
3 Bujagali– 11/9 and 365 360 Ok
Tororo 11/10
(Lot A)
4 Mbarara – 2/9 and 354.5 352.4 Ok
Mirama (Lot 2/10
B)
Source: OAG analysis of tower span field data and tower schedules
4.2.2 Quantity verification

Payments 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 Executed works as at Remarks
December 2014 Dec 2014
Foundations Tower Foundations Tower

cast erected cast erected
1 Tororo – 503 430 503 430 Okay
Lira (Lot 1)
2 Mbarara 270 223 270 223 Okay
– Nkenda
(Lot 2)
3 Bujagali – 226 203 226 203 Okay
Tororo (Lot
A)

S/N Projects Certified works as at Executed works as at Remarks
December 2014 Dec 2014
Foundations Tower Foundations Tower
cast erected cast erected
4 Mbarara 109 33 109 33 Okay
– Mirama
(Lot B)
Source: OAG analysis of payment certificates
Management response
Management 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 supervision

UETCL 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.

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
Part of the channel demolished at Foundation columns at Mbarara North

Mbarara North substation extension substation demolished and rebuilt due to
due to shoddy civil works shoddy civil works
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.

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.
Recommendation
UETCL 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 UETCL

UETCL 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 Response
A 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 Comment
In light of the increasing number of projects implemented by UETCL, it is important that
the monitoring function is strengthened to make it more effective.
Recommendation
The capacity of the monitoring unit should be strengthened to cope with the increasing
number of projects.
4.4 Resettlement of Project Affected Persons

UETCL 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:

Table 10: Progress of contract signed between M/s Lamba and UETCL for
construction of resettlement houses under RAP
Project Date of Parties to Contract sum Remarks Status of

name signing the the contract (UGX) contract
contract execution
at the
time of
abandoning
site.
Mbarara- 12th, UETCL and 2,799,226,565 Fifty (50) 22 main
Nkenda September, LAMBA houses houses,
2011 Enterprises each valued kitchen, pit
Limited at UGX. latrine and
55,984,531 bathroom
were to be on
constructed Mbarara-
for a period Nkenda
of 12 Line in the
months. districts of
Mbarara,
Bushenyi,
Rubirizi,
Sheema,
Ishaka,
were
incomplete
while 28
units had
not taken
off.
Hoima/ 28th ,March, UETCL and 5,300,000,000 Ninety- 59 houses
Mputa 2011 LAMBA five (95) completed
-Nkenda Enterprises resettlement and handed
houses at a over with
cost of UGX. defects,
55,789,474 28 sites
for a period were
of 12 incomplete
months in while 8 had
the districts not taken

of Hoima, off.
Kibale and
Kabalore
where
the line
traverses.

Following the abandonment of the site, system. Because of inadequacies in the
UETCL conducted an evaluation to ascertain system, UETCL still faces a challenge of
the status and value of outstanding works. It documentation and storage of information
was noted that there was an overstatement relating to transmission line corridors.
of the value of works executed that led to
over payment of UGX 41,877,402 and UGX The review of the system indicated that the
242,925,021 for resettlement houses under failure to operationalize the system was
Mbarara-Nkenda and Nkenda-Hoima caused by inadequate needs assessment
projects respectively. undertaken during planning. At the planning
stage, UETCL should have undertaken a
comprehensive needs assessment that
Management response would capture all system requirements to
The observation is noted. The unrecovered meet user needs.
advances to the contractor was due to
his contract expiring. This coincided with
Management response
the freezing of the contractor’s accounts
and therefore he could not renew It should be noted that the procurement
the advance/performance payment under audit was a re-tender of reduced
guarantees. UETCL sued the Contractor scope after a failed procurement that was
for recovery of the reconciled amounts abandoned due to budget constraints.
and the case is not yet decided The initial procurement had TORs that
were all round and covered the entire
scope for both existing and upcoming
Audit Comment projects. Upon failing to identify
UETCL did not provide evidence that the appropriate funding, the technical
matter is before court hence the risk of department (IT) was requested to reduce
loss is still apparent. scope and instead specify a pilot based
system implementation based on BIP.
Recommendation The new support contract is meant to

UETCL should closely follow up the cater for scenarios/requirements that
were far different from the BIP and any
recovery of funds in accordance with the
such required enhancements that may
provisions of the contract.
come up from time to time.
4.5 WAY LEAVES INFORMATION Audit Comment

SYSTEM (WIS) Whereas the scope of the initial contract
was scaled down, UETCL should have
UETCL engaged a vendor at USD 658,031
developed clear and comprehensive Terms
to design, develop and implement a
of Reference (TORs) that would guide the
Way leaves Information System with
provider to develop an all-round system.
document and expense management and

compensation management modules. This
was aimed at minimizing the volumes of Recommendation
paper work used in handling PAPs files to UETCL should ensure that a
improve efficiency. comprehensive needs assessment is
undertaken and also properly supervise
The system was piloted for RAP under the service provider to ensure the full
Bujagali Interconnection Project but could realisation of the expected functionality
not capture all the required data for other of the system.
projects. This prompted engagement of
additional consultancy services at USD
67,146 to make improvements on the

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.

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.

APPENDICES
Appendix I: Organization Structure of UETCL.


Appendix II: Documents reviewed
Document Purpose(s) of Review - To ascertain:-
NELSAP, Mbarara-Nkenda and Mputa/ The Compesation and resettlement
Hoima-Nkeda Resettlement and procedures.
Community Development Action Plan/
Livelihood Restoration Plan (LRP)
Electricity Act, Land Act, NFA and NEMA UETCL’s mandate, Legislation on land
Acts acquisition and use; compensations;
forests and environmental mitigation
measures
Loan agreements with African Financing terms and conditions
Development Bank (ADB), Japan Bank
for International Cooperation (JBIC),
Norwegian Development Agency
(NORAD), African Development Fund
(AfDF) & French Agency for Development
(AFD)
Grid Development Plan (GDP)/Grid Whether the projects under study were
Investment Plan (GIP) included in the GDP/GIP
Apraisal document for NELSAP, The project appraisal recommendations
Mbarara-Nkenda and Mputa/Hoima- and risks
Nkenda
Aide memoire for all the funders on the The respective financiers’ assesment of
three projects the progress of the three projects under
study
Monthly and quarterly performance Progress of work for each project under
reports 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 Environmental protection measures
monitoring plan; Contractors’ social established by the contractors of the
and environmental action plan; Waste projects under study
management plan and Social and

environmental action plan framework
RAP for NELSAP, Mbarara-Nkenda and Resettlement and compesation plans,
Mputa/Hoima 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, Implementation procedures
Mbarara-Nkenda and Mputa/Hoima
interconnection projects.

Document Purpose(s) of Review - To ascertain:-
Project audited accounts if any for the The funding of the project and its
years under review. performance over the years
Rules of Procedure for procurement of The rules and guidelines for procurement
goods, services and use of Consultants. of goods, services and consultancy
Ministerial policy statements for MEMD How transmission line project activities
(years under review) are budgeted for and integrated into the
overall Ministerial programs

Appendix III: Interviews conducted
Unit Designation Purpose of the Interviews
To ascertain/get:-
Management Manager Project • The roles and responsibilities, functions
of UETCL implementation and activities of UETCL in NELSAP,
Mbarara-Nkenda and Mputa/Hoima-
Principal
Nkenda project
Environment officer
• The other stakeholders in the project
Executive Officer and what role they play
Deputy Executive
• The resources (inputs) for activities of
Officer
the project implementation and the
Manager planning
expected results (output) from the
and investment
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 Status of works on all the three projects
NELSAP, Mbarara- and their associated sub-stations,
Nkenda/Tororo-Lira challenges faced and way forward
and Mputa/Hoima
projects respectively
MEMD Commissioner The roles and responsibilities, functions
transmission lines – and activities of MEMD in NELSAP,
MEMD Mbarara-Nkenda and Mputa/Hoima-
Nkenda interconnection projects
Management 2 – Contractors and Status of works on tower, monopoles and
of EPC 1 – suppervisor sub-stations, challenges faced and way
contractors, forward
Supervising
consultants &
contractors of
PAP houses
under RAP
A sample of PAPs yet to be paid (6) • Existence of claimants, the un-resolved
issues with UETCL concerning their
claims
• Steps taken to solve their claims with
UETCL
Central Government Valuer (CGV) Average time for approving PAPs valued
files submitted by UETCL

Appendix IV: Delay by CGV to approve valuations submitted by UETCL
Project Issue Submission Comments
Okolong land in Land for 6th February The contractor has submitted
Tororo substation 2013 claims for delay
extension
Claims commercial Commercial 27th February The institutions are not
institutions like institutions 2013 allowing access to their
Kakira, Tamteco claimed estates
tea estate and Tilda that the
methodology
for valuation
of estates
should be
based on
additional
criteria
Mbarara-Mirama The banana 17th September The farmers are threatening
220kv plantation 2012 to block the contractor
owners want
a higher
diminution
before their
plantations
are cleared
on the 40m
corridor
Katerema The 2nd may 2013 The school is threatening to
secondary school school has block the contractor
claim on classroom submitted
block an additional
claim for the
dormitory
block
Source: OAG analysis of the correspondences between UETCL and CGV in the Ministry of Lands,
Housing and Urban Development




OFFICE
OFFICEOF
OFTHE AUDITOR
THE AUDITOR GENERAL
GENERAL
P.O. Box 7083, Kampala.

Tel. +256 414 344 340 Fax: +256 417 336 000
E-mail: info@oag.go.ug
www.oag,go.ug

Uganda Transmission Line Projects Progress Audit

Încărcat de

Informații document

Descriere originală:

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Uganda Transmission Line Projects Progress Audit

Încărcat de

Drepturi de autor:

Formate disponibile

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

OFFICE OF THE AUDITOR GENERAL

UGANDA ELECTRICITY TRANSMISSION COMPANY LIMITED

VALUE FOR MONEY AUDIT REPORT

OFFICE OF THE AUDITOR GENERAL

VALUE FOR MONEY AUDIT REPORT

31st March 2015

The Rt. Hon. Speaker of Parliament

REPORT OF THE AUDITOR GENERAL ON IMPLEMENTATION OF TRANSMISSION

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

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

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

VALUE FOR MONEY AUDIT REPORT

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

AFD French Development Agency

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Assessment of works executed

Supervision and monitoring

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Way leaves Information System

Overall audit conclusion

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

VALUE FOR MONEY AUDIT REPORT

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Despite such government interventions, Uganda’s electricity consumption was reported

Inadequate energy infrastructure has been identified as a major constraint to accessing

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

1.3.1 General Description

namely: the Uganda Electricity Generation

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Table 1: Project Objectives

1.3.4 Project outputs

Bujagali - Tororo - 127.7km, 220kV and Mbarara - Mirama - 66km, 220 kV

• A constructed, tested, commissioned and fully operational 220kV Bujagali-

• A constructed, tested, commissioned and fully operational 220kV Mbarara-

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

 A constructed, tested, commissioned and fully operational 132kV Tororo-Lira

 A constructed, tested, commissioned and fully operational new transformer

Mputa/Hoima - Fort Portal- Nkenda - 220kV Transmission Line Project and

• A constructed, tested, commissioned and fully operational Mputa – Hoima

• A constructed, tested, commissioned and fully operational new transformer

1.3.5 Organisational structure

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Table 2: Funding of UETCL projects under implementation

COMPANY LIMITED – (UETCL)

BY UGANDA ELECTRICITY TRANSMISSION

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

Source: OAG analysis of release schedules to UETCL projects

The specific audit objectives were:

iii) To assess the extent to which supervision and monitoring arrangements

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

• Substations of Mbarara, Mirama, Bujagali and Tororo.

VALUE FOR MONEY AUDIT REPORT

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

IMPLEMENTATION OF TRANSMISSION LINE INFRASTRUCTURE PROJECTS

2.0 AUDIT METHODOLOGY

2.2 DATA COLLECTION METHODS

To assess whether the contracts for the construction of power transmission

To assess whether the contracts for the construction of power transmission