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GETTING TO THE FOUNDATION OF THIS LATEST DEAL

Jan 05, 2011 Features / Columnists, Peeping Tom

One can only hope that the Economic Services Commission of the National Assembly is following closely the development as regards the procurement by the Guyana Power and Light of additional electricity, and would summon the parties involved to a hearing to explain the signing of a contract said to be worth some US$18M.
This being necessary, so that a full and satisfactory explanation can be forthcoming about this deal and the subsequent tender to construct a foundation for the proposed generator.
It was in October, following a spate of nation-wide blackouts, that the President announced that Guyana would be spending some US$20M to acquire additional generating capacity. This was followed on November 16, 2010 by the signing of an agreement between GPL and Wartsila for an additional 15.68 megawatts. Only the Government Information Agency (GINA) was invited to this signing and it reported that the agreement marked the conclusion of “negotiations” between the two sides.
When the Stabroek News queried when the bid for this contract was advertised, there was a reply contradicting the GINA story. Instead of the contract for the additional generating capacity being as a result of negotiations, it was revealed that there was no tender for this additional generating capacity, but instead, it formed part of a contract signed last year in which the GPL bought some 20.7 megawatts.
This came as a surprise, since following the purchase of this generating capacity of 20. 7 megawatts, it was explained that there would be no need for additional capacity.
As it turns out, we are now being told that provision was made in that original contract for the supply, at a locked-in price, of an additional 15.68 megawatts.
It did not end there. This additional generator has to be mounted on a foundation and for that tenders had to be invited. When the tenders were opened, some amazing facts unfolded. Firstly, one bid was more than the sum of the other three bids, and the lowest of those bids was half of the engineer’s estimate.
When asked for an explanation as to how the engineer’s estimate was twice the lowest bid, it was suggested that the engineer’s estimate was based on factors which were no longer applicable.
The logical question is therefore, if what was suggested was true, that is if the engineer’s estimate did not reflect present day realties, by what manner of incompetence was it allowed to be part of the bidding process? How could the authorities have allowed the engineer’s estimate to be used when by their own admission, it was based on factors which were no longer relevant?
How do the authorities explain that an outdated engineer’s estimate was being used as benchmark in the bidding process? How do they explain what happens now? How are the bids going to be evaluated? Is a new engineer’s estimate going to be prepared? And given the fact that the bids have already been opened would this not amount to a compromising of the process, thereby nullifying the entire bidding exercise?
Further, it was reported in this newspaper that the actual specifications are still outstanding and have to be prepared by Wartsila in Finland. So what specifications are we speaking about? Is it the specifications for the foundation, the very foundation for which bids were invited and opened? Is it possible that bids were invited for a job for which the specifications have not yet been prepared? If so, on what basis were the tenders arrived at, and how are these bids going to be evaluated given the problems admitted about the engineer’s estimate and now the supposedly absence of specifications.
This is why the Economic Services Commission needs to get to the bottom of this issue so that greater clarity can be forthcoming to a public who are growing wary about controversial contracts under the present administration.

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