The Commercial Court in Kampala has dismissed with costs, a multibillion case that the Uganda National Roads Authority (Unra), had instituted against a construction company, Dott Services, and an engineering firm, the Professional Engineering Consultants (PEC).
In his July 1 ruling, Justice Henry Peter Adonyo said he found no fault against Dott Services and PEC as alleged by Unra while carrying out the reconstruction works on Tororo-Mbale and Mbale-Soroti roads over a decade ago.
Instead, the judge found that Dott Services suffered prolongation costs of 509 days.
“This honourable court correctly found Dott Services indeed suffered prolongation costs of 509 days as provided in a contract signed on October 22, 2010. This honorable court declines to issue a declaration that the Dott Services and PEC committed acts of fraud against Unra,” ruled Justice Adonyo.
“This honourable court declines to issue an order that Dott Services refunds Shs29b …,” it added.
The genesis of the legal dispute started in 2010 when Unra signed a contract with Dott Services for the reconstruction of the 49 kilometre Tororo-Mbale road that was to be completed within 18 months at Shs30b.
Further, the contract included reconstruction of Mbale-Soroti road (103 kilometre) at Shs60b.
The same road was expected to be completed within 18 months.
Court records show that following a design review, Unra changed the scope of works, which resulted in increasing the original contract price and period for the works.
Cost of works
This saw the cost of Mbale-Soroti road being increased to Shs108b, to be executed in 40 and-a-half months while the Tororo-Mbale road reconstruction cost was increased to Shs63 and was to be executed within 38 months.
But in due course, Dott Services wrote two letters to Unra, seeking compensation of 509 days that they claim to have been delayed to commence the reconstruction works, which compensation they claimed amounted to more than Shs45b.
Further, court documents show that PEC went on and assessed and evaluated Dott Services claim and recommended to Unra to pay Dott Services Shs33b instead of Shs45b.
“Unra on receipt of PEC recommendations, made after some consultations with its external legal experts, on April 17, 2015, wrote to Dott Services proposing to pay it Shs29b instead of Shs33b as the final payable amount. Dott Services agreed with Unra after getting clearance from both PPDA and Solicitor General, subsequently, paying Dott Services a total of Shs29b,” court documents stated.
However, in July 2016, Unra’s new management instituted an internal audit into payments made to Dott Services.
The internal audits examined documents including the road execution contract, progress reports and site meeting minutes and concluded that Dott Services was never entitled to payments for the delay compensation beyond 169 and 139 days, earlier approved.
To that effect, Unra proceeded and sued Dott Services and PEC, leading to last week’s decision in favour of Dott Services and PEC.
In his analysis, Justice Adonyo also observed that the assessment of the claim No1 was done jointly including Unra officials, hence it wasn’t right to heap the blame on PEC.