CHOGM News 15 May 2010
- Details
- Written by Admin HDT
JM MUSISI ADVOCATES & LEGAL CONSULTANTS
P.O. Box 3288 Kampala, Africa house, 42 Kampala Road
PRESS RELEASE
We have read the CHOGM report published in The Monitor newspaper of Saturday 15 May 2010 and have observed the anomalies therein regarding our client, Omega Construction Ltd (OMEGA). Here below is the clarification from OMEGA on the issues concerning the company as contained in the report that appeared in the newspaper. Points that were raised in the earlier PAC sessions have also been taken into consideration.
CLARIFICATION ON THE CONTRACT FOR BEAUTIFICATION WORKS ALONG CLOCKTOWER NSAMBYA GABA MUNYONYO ROAD (CHOGM PERIOD)
OMEGA is concerned about the negative stories which appeared in The Monitor emanating from the CHOGM report produced by PAC. We are inclined to think that the findings are malicious and intended to spoil our good name despite the fact that PAC promised to invite us for a hearing after we submitted all the relevant contract documentation including completion certificates to them. The invitation never came!
Since OMEGA was not represented in PAC it has no choice but to clear its name in the public domain through this release with the key facts below:
a) OMEGA submitted its tender for the above contract on invitation by the Ministry of Local Government on 17 July 2007 at the same time as three other contractors including SPENCON and NICONTRA. ZZIMWE was not among the bidders. The tenders were opened publicly on the same date.
b) OMEGA received a Notification of Award for the Contract for Beautification of Clock Tower Nsambya Gaba Munyonyo Rd (12KM) on 16 August 2007 after evaluation by the Ministry for a contract sum of UGX 428M. This was arrived at after negotiations initiated by the Permanent Secretary (PS) since the tendered amount was Ugx 565M. Performance and Advance Payment Guarantees were submitted on 23 August 2007 after which the Contract was signed on 26 September 2007. Works commenced on 01 October 2007.
c) A Variation Order (for an additional section) covering the KIBUYE SALAAMA Road (8KM) initial clearing works was initiated by the Ministry and issued by the PS for UGX 64M on 10 October 2007. This according to him was after inspecting and being satisfied with the progress of works. He wrote “Our inspections have established that work on the site is progressing well. We have decided to offer you another tender to beautify Kibuye-Salaama Munyonyo Road”. The Addendum to the main contract for the KIBUYE SALAAMA section (8KM) was signed on 11 April 2008 for UGX 280,080,330 which included the value of the Variation Order. This was also done after inspections by the PS and ascertaining that the progress of work was satisfactory.
d) Substantial completion Certificates for the NSAMBYA GABA MUNYONYO (12KM) and KIBUYE SALAAMA (8KM) sections were issued on 11 June 2008 and 16 July 2008 with completion dates of 28 May 2008 and 30 June 2008 respectively. This was after joint inspections by the Contractor, Project Manager and Employer on or about 10 June 2008 and 23 June 2008. Watering and maintenance by OMEGA continued in this period and by the time these were issued all the necessary grass cover had been achieved.
e) The Defects Liability Certificate (DLC) which discharged OMEGA of all contractual obligations was issued on 07 January 2009 after the completion of the Maintenance Period on 31 December 2008.
f) OMEGA applied for Interim Payment Certificate (IPC) No 1 on 29 October 2007. This was not certified until 22 April 2008 for UGX 419M. The delay was occasioned by the lack of an addendum to the Contract yet work had been executed. It will be noted that the addendum was finalized on 11 April 2008. Payment of this IPC (Invoice) was made on 6 January 2009 after 8 months from issuance of the certificate and more than a year from the application. Penultimate Payment Certificate PPC No 2 (The second last invoice) was applied for on 26 June 2008 after the joint inspection for issuance of the substantial completion certificate. Certification was made on 06 January 2009 for UGX 237M after joint measurements were carried out between August and December 2008. Part payment of this was made on 26 February 2009. The Application for Final Payment Certificate FPC No 3 (Last Invoice) was submitted on 04 February 2009 after receipt of the DLC (The Certificate discharging all obligations of a contractor under the contract) by OMEGA and the Final Account was approved on 18 May 2009. Earlier an Advance Payment of 85M was paid on commencement. There is a balance outstanding on PPC No 2(Invoice No 2) and FPC No 3 (Invoice No 3) and accrued interest due to further delays in effecting payment
The above facts clearly show that:
• OMEGA tendered and competed for the works and only executed works in the region of UGX 700M not UGX6B. In addition, the cost of our contract per KM is UGX35M. It is on record that the cost of other contracts including Kibuye Entebbe Rd executed by other contractors at the same time is UGX70M per KM. We were even persuaded by the PS to lower our tendered sum from 565M to 428M to save government funds.
• All Contractual Obligation Certificates were issued and are available and therefore OMEGA does not have any performance obligation on the contract at all.
• The “delays” on the Contract were occasioned by the Employer who had to seek the necessary approvals (including PPDA and Solicitor General) before issuance of necessary instructions. This is evident in the dates of the Addendum to the Contract. The dates on the addendum to the running contract coupled with the dates of the substantial completion certificates will show that there was no delay occasioned by OMEGA on this contract.
• The Choice by the PS, Mr Sekkono, not to pay for certified work in time is not backed by the contract between the Employer and OMEGA. It could have been for other personal reasons.
• The interest chargeable is provided for under the contract and arose because of delays in payment.
MAINTENANCE OF WORKS AFTER 31 DECEMBER 2008 REVERTED TO THE EMPLOYER (THE RELEVANT LOCAL GOVERNMENT DEPARTMENT). OMEGA CANNOT THEREFORE BE LIABLE FOR THE STATUS OF WORKS AT PRESENT.
We are further inclined to believe that the presentation of false, uncross-checked alarming information is deliberate and aimed at weakening the local/indigenous construction industry.
This is so because the MD OMEGA is the SECRETARY GENERAL of UNABCEC, the Contractors Association and has been at the forefront of advocating the use of local contractors for the majority of projects. False accusations against the company clearly work against this goal even if it is in the short term.
We believe that our MPs should be looking at ways of uplifting the fragile local construction industry rather than intentionally bringing down (with no justifiable cause) the few local contractors who have chosen to work with the government through thick and thin without receiving payments, for more than a year at times, over the last two decades.
