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A MAZE OF CONFUSION OR AMAZING CONFUSION?

Jan 03, 2011 Features / Columnists, Peeping Tom

Things are so much better in Guyana today that neither the government nor the Guyana Power and Light has to dispose of any national asset in order to pay for additional power generation. When the PPP first came to power in 1992, it was forced to privatise national assets just in order to find the money to build a few generators to help stabilise the electricity situation.
Today there is so much good fortune that the government can actually contemplate a US$18M expansion that would allow additional electricity without having to sell anything or without even having to borrow the money from some international bank.
That good fortune we now enjoy is called Value Added Tax, which allows consumers to bankroll these massive projects without resort to foreign borrowing. The tax coffers are overflowing with so much money these days that the government no longer has to go borrowing from international banks or begging foreign government to finance major infrastructural works. The money is now available for a multi- billion drainage canal, a multibillion road to an interior location and a few billions more for housing development. We have never had things this good.
But at least if we can now afford such huge investments, Guyana should have at least acquired enough experience to have allowed it to avoid a situation of single sourcing. In the present instance, there was no need for competitive bidding since, we are told, that the present three and one half billion dollar expansion forms part of a previous proposal which was made by the company, which is now supplying the plant that will now provide an additional 15.6 MW to the national grid.
The present government has to its credit improved electricity generation and allowed for improvements in the distribution system. While this has not ended the dreaded blackouts, these only now occur due to system problems and are not as a result anymore of a lack of generating capacity.
The new expansion will ensure that generation remains adequate for at least a couple of years despite the rising demand for power. Unfortunately, the price tag for this expansion does not include the construction of a foundation on which the new plant is to be erected. That foundation has to be built by the local power company and this is where things have gotten amusing.
There were four bids for the contract to build the foundation. The first, second and third bids were only a few million dollars apart with the lowest being $60.3M. The fourth bid amazingly was more than three times the lowest bid and some eighty million dollars more than the engineer’s estimate, which turned out to be double the lowest bid.
This makes for a maze of confusion, which has not been helped by an explanation that the engineer’s estimate used factors that were no longer applicable. How can the factors that were used in compiling the estimate be no longer applicable? When was this estimate done and just what were the factors that were considered?
Both the bids and the engineer’s estimate must be based on a standard set of specifications, which in turn is based on the design that was approved. So, can the Guyana Power and Light now indicate when were the specifications for the foundation done and who did it and what were the specifications that arose from that design?
It would help in untangling this maze of confusion, which has arisen as a result of the huge differences between the engineer’s estimate and the bids received. How is it that the engineer’s estimate can be twice the lowest bid? Is the problem with the engineer’s estimate or is it a problem with the bids, or both?
If something like this had happened during the PNC days of blackout, the opposition would have been demanding an inquiry. An inquiry into this matter would untangle this whole episode.
An inquiry would help at this stage to assure all taxpayers whose millions are paying for this foundation that they are getting value for money.

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