Badru D. Mulumba
The Monitor (Kampala)
December 18, 2003
A Canadian firm accused of inflating costs of Karuma dam is under increased suspicion.
Mr Peter Bosshard, Policy director of the U.S based non-governmental organisation, International Rivers Network, cast doubt on the honesty of Acres International while writing an apparently misleading report about actual costs of energy projects in Uganda.
Acres International’s still confidential report to the World Bank, Economic Review of the Bujagali hydropower project, published in 2001, priced Karuma at $585 million – $200 million above costs projected by Norpak, a coalition of Norwegian firms, pushing for Karuma.
“In 1991, Acres first proposed Bujagali as a site for a dam project, and the Ugandan government signed a memorandum of understanding with the AES corporation based on this advice,” Bosshard said in an e-mail to The Monitor.
“Acres had a vested interest in the economic analysis, in that its earlier advice would have been invalidated if the economic analysis did not confirm Bujagali as the least-cost option for Uganda. In contradiction of its disclosure policy, the World Bank never made the economic analysis of the Bujagali project available to the public.”
In 1994, government invited the U.S based AES Corporation to develop Bujagali. However, development of the dam dragged on after Norpak put the competing Karuma project on the table.
Acres was again required to do a general study analysing the likely costs of developing potential power projects in Uganda.
A Norwegian journal, Development Today, first broke the anomaly in the confidential World Bank report in its current issue.
It says that Acre’s report was a major determining factor for the World Bank to line up Bujagali for funding ahead of Karuma.