The China Civil Engineering and Construction Corporation (CCECC) withdrew a legal suit filed against government of Uganda so as not to jeopardize future prospects for construction projects in Uganda, page it has emerged.
This was revealed by Mr. Zhao Jinhua, case the Senior Assistant President of China Railway Construction Corporation Limited (CRCC) in a meeting with the Parliamentary Select Committee on the Standard Gauge Railway, which is led by the Chairperson and Nakifuma County MP Hon. Kafeero Ssekitoleko.
The meeting took place at the CRCC headquarters in Beijing, China on Tuesday, 27 January 2015.
CCECC lost the multi-billion dollar railway contract to CHEC (China Harbor Engineering Company), which was reportedly favoured by president Museveni after committing itself to develop capacity of UPDF Engineers in the construction and maintenance of Lake Victoria Port Infrastructure System and the Railway Infrastructure System and also developing an Inland Port and a ship building facility at Bukasa not to mention a railway station.
Other related railway facilities would also be set up right from Kampala to Malaba and Bukasa Port and from Tororo to Pakwach before extending from Gulu to Nimule and the company would further train UPDF Engineers and Technicians and remodel Tororo Barracks into a polytechnic centre thus cutting the cost of buying uniform and other attire from abroad.
The court case would have delayed the railway project which government expects to boost cross-border trade, ease the cost of doing business, enhance labour mobility, attract foreign investments to create employment opportunities for locals thus widening the domestic revenue base.
The China Civil and Engineering and Construction Corporation is a subsidiary company of China Railway Construction Corporation Limited.
How case came about
Mr. Jinhua explained that the Branch Manager of CCECC did not report back on the Memorandum of Understanding that had been signed for the Eastern and Northern routes, hence and the subsequent court case.
He added that after receiving a letter from the Ugandan Minister for Works about the suit, they asked their representatives to withdraw the case.
“The legal suit was occasioned after the Memorandum of Understanding was cancelled but since we wanted to cooperate with the government on future proposals, we decided to withdraw the case,” he said.
The Chairperson of the Committee Hon. Ssekitoleko wondered why the CRCC, as a parent company, did not take interest in the Ugandan Standard Gauge Railway and sought to know the status of CRCC’s ownership of CCECC.
“Why didn’t CRCC pick interest in the projects in Uganda amid all the controversy and leave it to CCECC?” Ssekitoleko pondered.
Mr. Zhao Jinhua clarified that CCECC is mainly for their overseas business and is wholly owned by the CRCC.
Later in the day, the Committee held a separate meeting with the management of China Civil Engineering Construction Corporation (CCECC) whose President Mr. Zhou Tianxiang said that they attach a lot of importance to the market in Uganda and would like to be part of the infrastructural development.
“We would like to participate as a company that is involved in railway construction, and get to involved in the development of Uganda,” he said.
He added that they are ready to do preliminary infrastructural designs and have already set up a team to study railway planning in Africa.
“There is need to connect all railways into a network to achieve tangible results,” he added.
Tianxiang also reaffirmed the need to use local resources, provide training of local staff and carry out cooperation with local companies.
The Chairman, Hon. Ssekitoleko, said that the Committee was now certain of the status of CCECC and its capacity to carry out infrastructural development as evidenced by the works carried out in several parts of the world.
“We now know your legal and commercial status, your networks within China and elsewhere and the fact that you consider local peoples’ needs. There is no doubt that you are the kind of people we would like to work with,” Hon. Ssekitoleko stated.
The Committee will on Wednesday 28th January 2015 travel to Guangzhou to conduct site visits of the railway works being carried out by the companies, before returning to Uganda on 31st January 2015.