Chinese firm to construct Lubowa Hospital USD $25m less than ROKO

Chinese firm to construct Lubowa Hospital USD $25M less than ROKO
Artistic impression of Lubowa International Specialized Hospital

Kampala, Uganda | URN | Finasi International FZC, a company in the construction of the Lubowa Hospital reportedly contracted Power China over ROKO Construction due to difference in project pricing.

Finasi, the main shareholder in the Special Purpose Vehicle (SPV) Finasi/ROKO with up to 95% approached ROKO seeking a partnership to construct the International Specialised Hospital Uganda (ISHU).

Government early this year approved a loan Guarantee of 379 million US Dollars to Finasi/ROKO for the Specialised Hospital.

However, the project has been marred with controversies with ROKO who have invested in the site since the initiation of the project saying it was being unfairly kicked out in favour of a new company, Power China Guizhou Engineering Co, Ltd.

According to ROKO Director Mark Koehler, the SPV indicates that no other companies other than FINASI, ROKO or FINASI/ROKO and its affiliates can be subcontracted work in the hospital of more than 15% according to the contract.

ROKO has since then run to court seeking to cancel the move by FINASI International FZC chaired by Enrica Pinnet.

Power China is already at the sight constructing despite the battle.

This publication has learnt that Finasi, chaired by Italian Investor Enrica Pinneti got a better deal from China Power, thus kicking out ROKO.

Although FINASI’s main reason for kicking out ROKO is that they had bad books of accounts and were struggling financially, and also that they were not competent, highly placed sources told this publication that the Chinese have offered the same capacity for a cheaper price.

The source says that whereas ROKO was to work with FINASI to construct Lubowa Hospital at 80 million dollars, the Chinese have agreed to work with 55 million dollars to do the same work but with even better financing. This amount is 25 million dollars less than what ROKO is charging.

The source further told this publication that although ROKO would rely on loans to do its works, the Chinese company would reportedly get money from a China facility to do the work.

“I was told the Chinese asked for 25 million dollars less to do the work. They kept on saying that ROKO was expensive and that their budget was between 50-55 million dollars to construct the hospital,” the source told our reporter on condition of anonymity.

This publication learnt that the Finasi chairperson Enrica Pinneti kept on asking ROKO to reduce on the budget in vain.

It is reported that this is when after three years at the site, Enrica Pinneti Evicted ROKO from the site in Lubowa.

Whereas FINASI says ROKO is heavily indebted and incapable of doing the work, it says the new company China Power has the experience and resources needed to do the work.

In a letter introducing Power China dated 6th June to the Ministry of Health, the Finasi Chief Operations Officer Simone Palmieri says for the benefit of the project and to assure to the Ministry of Health the timely completion of the Work, decided to award Power China Guizhou Engineering co. limited as civil works contractor for the project.

He says Power China is ranked highly in the Global contractors ranking and they have an annual turnover of approximately 2.8 billion dollars in the financial year 2018.

Read Also: Lubowa hospital funds reported missing

“They will mobilize on the site all the required resources and equipment as well as thousands of Ugandan workers, under the direction of their international and highly-skilled engineering and construction and our project management team,” Palmieri says. However, According to ROKO, they do not want to be held liable for a project due to the subcontracting of a company they do not know.

He says there reputation as ROKO is at stake since Government awarded FINASI/ROKO the contract, and not FINASI and China Power.

Irene Ochwo, the Finasi/ROKO spokesperson told our reporter on phone that the company was not willing to give out further information in regards to the matter since it was before court.

Finasi Lawyer Moses Matovu told this publication to speak to the Ministry of Health, saying he was not the right person to answer on the Lubowa Hospital contract pricing and changes if any.

Attempts to Speak to the Permanent Secretary Ministry of Health Diana Atwine and Health Minister Jane Ruth Aceng was futile as their phones went answered in vain.