Indian firm wins against REG, in Paris court, to pocket Rwf32b
Tuesday September 06 2022
Rwanda’s energy utility faces $34 million (Rwf34.2 billion) loss after losing a longstanding legal battle in which Indian firm Kalpataru Power Transmission Ltd sued over breach of contract. PHOTO | CYRIL NDEGEYA
Taxpayers lose billions of francs in disputes arising from violation of contracts and unfair treatment of employees by government agencies.
The latest court case was against Rwanda Energy Group (REG), one of the most sued public institutions, by Kalpataru Power Transmission Ltd (KPTL), an Indian company, over the contractual breach in a Paris Court. The company won an arbitration award of Rwf32 billion against REG.
According to media reports, the dispute was over a contract to install and commission a 220 KV power transmission network connecting the Democratic Republic of the Congo and Rwanda in November 2013. Construction began in October 2014 and ended in 2017.
The joint project by Rwanda and the Democratic Republic of Congo was funded by the African Development Fund along with Kreditanstalt fürWiederaufbau, a German bank.
Cost of project
In 2016, KPTL requested that both parties adjust the cost of the project by $24 million. REG informed KPTL to raise the claim after the completion of the project. After the completion of the project, when KPTL raised the claim in March 2017, REG disputed it despite the previous agreement.
The Indian company referred the is sue to the Disputes Adjudication Board, constituted by three international experts from the United Kingdom and Germany appointed by the President of the International Federation of Consulting Engineers (FIDIC).
The board ruled in favour of KPTL and said it was entitled to a price adjustment claim of $24 million with an interest of $3.6 million REG did not comment on the issue when reached.
This is one among many lawsuits REG and other public instructions were involved in. According to the National Public Service Commission’s latest report, in 2019-2020, 24 public institutions were sued in 121 court cases, won 16 cases, and lost 105.
The most sued institutions are REG, the Water and Sanitation Corporation, Rwanda Revenue Authority, the Central Bank, the former Workforce Development Authority, Rwanda Transport Development Agency, Rwanda Revenue Authority, Rwanda Correctional Services, the Ministry of Trade and Industry, Ministry of Public Service and Labour, the Ministry of Health, and the University of Rwanda.