Monday, February 6, 2012

Doubts abound over new Bujagali deadline

Doubts abound over new Bujagali deadline

Wednesday, 01 February 2012 02:51
Written by Emma Mutaizibwa

The large turbine beneath a towering structure roars like a tremor as
it spins around the pale-blue waters of the Nile.

It�s this complex structural edifice constructed at the Bujagali falls
where Uganda will generate about 250 MW to add to the national grid.
Last week, the minister for Energy, Irene Muloni, put behind her busy
schedule to rush to Bujagali to see the latest progress. Her visit
came after The Observer, quoting a World Bank report, revealed that
Uganda could lose about $450 million annually as a result of the delay
in the completion of the dam.

Upon arrival, the site was a beehive of activity as Italians, Chinese,
Indians and local porters worked tirelessly under a blazing orange sky
to try and connect the first 50 MW to the national grid. It�s inside
this structure that the Italian engineers from the construction firm
Salini have been trying to switch on the 50 MW from the first turbine,
which amongst the five is the only one fully assembled.

As the constructors grapple with the completion of the dam, acute
power outages continue to cripple businesses, slow economic growth and
stymie industrialisation.
�I am excited with the progress. You can all see at least there are
tests and we can see about 5 mw have been added to the national grid,�
says an elated Muloni.

But a source at the dam who was not speaking on official record told
The Observer that the engineers have been tinkering with this process
and �sometimes it works and other times it does not work.�

With heightened power blackouts, government last year said the first
50 mw from Bujagali to the national grid would be connected by
December 2011, a deadline that once again was not met.

�There was an oil leakage after the first turbine had been assembled
so we had to fly in 20 engineers during the festive season to
dismantle and repair this leakage,� said Muloni.
Muloni also said earlier in 2010, that the discovery of a soft rock,
which had to be excavated and filled, caused the first delay.She has
since issued a new deadline of February 7.
�We are asking the contractor to work even harder and meet the

Muloni hopes the second turbine, which will produce another 50 MW will
be ready by March, the third turbine by May, the fourth by June and
lastly the fifth turbine by July.
Muloni also refuted allegations about the capacity of the new dam
saying, �it will produce the 250 MW during the peak demand.�

Former Energy minister Hillary Onek, who is a structural engineer said
the most Bujagali will generate is 220 MW and only for about three
hours, after which the water levels would dictate that generation be
scaled down. Going with the past experience, there is scepticism that
the dam will be complete within the new deadlines recently announced
by the Energy minister.

The cost of the 250 MW Bujagali, which was estimated to cost about
$798.6 million, is expected to hit the $1 billion mark, raising
further questions whether the cost is inflated. Today, Bujagali dam
stands out as one of the costliest dams in the World.

Bujagali timeline:
As far back as 2001, the government of Uganda started to plan for the
construction of a hydroelectric power plant at the location of the
Bujagali Falls. But Museveni said some lawmakers in the Sixth
Parliament attempted to frustrate the construction of the dam, many of
whom had lobbied the World Bank not to fund the project because it
would affect the environment.

On August 13th 2003, energy giant AES Corporation, which initially had
planned to construct the dam announced that it was pulling out of the
project. The Virginia-based firm, the world�s largest independent
energy producer then, was under investigation by the US Justice
Department for alleged bribery, in violation of the US Foreign Corrupt
Practices Act. The company, which owned and operated power generation
and distribution facilities in 28 countries, later pulled the plug on
a number of its operations worldwide and plans to write off the $75
million it invested in the AES Nile Power Bujagali project.

Then Bujagali got new developers, who formed a company called Bujagali
Energy Company Limited in 2006. Construction of the dam and powerhouse
started in June 2007, with loans from the World Bank, the European
Investment Bank and the African Development Bank. Salini, an Italian
construction company was selected to be the lead contractor on the

The consortium that is constructing the power station invested
approximately $190 million of their own money into the project. The
rest of the funds were borrowed from the following International
lenders; The International Finance Corporation (IFC), a member of the
World Bank Group, the African Development Bank (AfDB), the European
Investment Bank (EIB), the German Investment Corporation (DEG), the
German Development Bank (KfW), PROPARCO of France, the French
Development Agency (AFD) and the Netherlands Development Finance
Company (FMO).

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