‘Wrong specification transformers’ raise concerns for Rwanda’s power system

By The Inspirer

The Energy Development Corporation Limited (EDCL) offered a tender to a South African investor to supply power transformers with 30 volt capacity, but, the investor supplied those with a capacity of 33 volts which are not compatible with Rwanda’s electric system, it has emerged.

The issue was first exposed by the Auditor General’s Report of State Finances for the financial year ended June 30, 2020.

During the Parliament’s Public Accounts Committee (PAC) hearings held on Thursday, September 9, 2021, MPs grilled officials from EDCL on the problem.

A power transformer is an electrical device that regulates energy – by taking high-voltage electricity with a small current and changing it into low-voltage electricity with a large current, or vice versa – without changing the total electrical power.

Figures from the Auditor General’s report suggest that EDCL had made an advance payment of almost $29,000 (about Rwf29 million based on the current exchange rate) to the supplier. This is equivalent to 10 percent of the total cost of the tender consisting of 99 electricity transformers and medium voltage overhead switchgears.

Later, the supplier provided 28 transformers. But, it turned out that they did not meet the required specifications and could not be used in Rwanda’s power system as they had the capacity of 33 volts, while EDCL needed transformers with a capacity of 30 volts – those that are normally used in Rwanda.

The period of performance guarantee that was given by the supplier expired in 2017. EDCL requested that such a period of performance guarantee be extended, but that was not done as after finding out the issue, the South African supplier disappeared and the search for his whereabouts has been futile thus far.

To try to address the issue, EDCL tried twice to auction the transformers in question, but it lacked buyers.

PAC requested why EDCL did not make sure that the investor get pursued before he disappeared.

“Why did you make an advance payment to the investor before making sure that the products he supplied you met your requirements,” MP Christine Bakundufite asked EDCL officials.

EDCL acting Managing Director, Eric Mihigo said that the supplier committed fraud, indicating that he changed the specifications of the required transformers.

He said that they did their best to pursue the supplier, but he could not be found.

“We worked with the Rwanda Embassy in South Africa, but we could not know his whereabouts. And, we realised that it would be more costly to continue pursuing him including taking a legal action against him than looking for a technical solution including changing them [power transformers],” he said.

Now, EDCL said that it resorted to adjusting the transformers so that they are fitted into the Rwandan power system, adding that one of them was already changed and was functioning well.

Meanwhile, according to the Office of the Auditor-General, it would be difficult to sue the supplier given that the performance guarantee period was over, while the transformers were received by the procurement entity which also started changing them.

Lawmakers expressed concern over the cost that will be incurred on changing the transformers, as well as their safety.

“Who will incur the cost of changing those transformers to fit into the Rwanda electric system,” asked PAC Chair, Valens Muhakwa, indicating that it would imply wasteful expenditure if the cost is covered by the Government.

MP Germaine Mukabalisa asked whether the modification of the transformers is being done after the agreement with the manufacturer in order to address issues including the risks that might come with it.

“Who will be responsible for the risk that might emerge from the transformed products,” she wondered.

EDCL explained that the transformers that the company received are more valuable than the advance payment it had made and that even the cost of changing them could not result in a loss to the Government.