Energy Group (REG) faces Rwf34.2 billion loss after losing a long-standing legal battle with Indian firm Kalpataru Power Transmission Ltd over breach of contract.
Details of the dispute, which dates back to 2013, indicate that Kalpataru Power Transmission Ltd (KPTL) was contracted by REG for works on the 220kV Karongi-Rubavu-Kigali-Goma power transmission line, the African Development Bank funded project.
Efforts to get a comment from the Rwanda Energy Group Management proved futile by by press time.
However, parties disagreed on the price adjustment clause in the contract, prompting KPTL to file a lawsuit at the international arbitration tribunal, claiming additional $24.01 million and Rwf35.07 million from the initial contract price of $26.3 million and Rwf5.2 million.
REG lost the case in 2019 when the international arbitration adjudicators ruled in favour of the KPTL.
REG management challenged the ruling without success. Details of the auditor general report released in May, which reviewed the contract’s price adjustment clause and the decision of the adjudication tribunal, show the payment in the case is more than 90 per cent of the initial contract.
The utility firm was also subjected to settling late payment fees and interests.
Besides, the auditor general indicated that REG incurred a huge legal bill in the case as it owes $1.3 million to the London-based law firm, in addition to Rwf410.9 million already incurred as legal fees concerning the dispute.