$42.7M ECD road extension project…China Railway awarded contract despite incomplete bid

Jul 04, 2014 News

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 “Well I suppose it depends on what the nature of the incompleteness is. Because there may be fatal and non-fatal incompleteness,”- Finance Minister Dr. Ashni Singh

By Kiana Wilburg

It appears that China Railway First Group has been awarded a contract to upgrade and widen the East Coast Demerara Public Road by Cabinet, despite the fact it was found by the National Procurement and Tender Administration Board to have submitted to a defective bid.

When asked why the company was awarded the project even though it was found that its bid was incomplete and that Tender Board recommended for it to be retendered, Finance Minister Dr. Ashni Singh said, “Well I suppose it depends on what the nature of the incompleteness is, because there may be fatal and non-fatal incompleteness. The bottom line is that all of the bidders came from a pool of six that were prequalified and found to be capable, and of four bidders we awarded to the lowest…Had we gone with the highest bidder, a different level of accusation would have been made.”

The Minister was at the time responding to questions posed to him yesterday during a press conference held at the National Communications Network.

Four Chinese construction companies had tendered for the Ministry of Public Works project to widen the East Coast Demerara (ECD) public road. But it was awarded to China Railway First Group Company Limited which had the lowest bid. This company is also the contractor for the Amaila Falls Hydro-Electric Project. And as part of a continued deal with government, it was gifted two plots of land to continue its work on a critical section of the access road at a reduced price. China Harbour Engineering Co. Ltd, the contractor in the US$150M expansion of the Cheddi Jagan International Airport, submitted a bid for US$60.4M ($12B).
Meanwhile, China National Machinery Import/Export Company Limited, which was involved in the construction of the problematic US$200M Skeldon expansion project, submitted a proposal for US$55.6M ($11B).
The highest bid came from China State Construction Engineering Corporation for US$71.4M.

The Engineer’s estimate for the project was US$57.6M.

Cabinet gave its no objection to the award of US $42.7 M contract for the road widening and upgrading of the ECD road from Better Hope to Belfield in Region Four.
But the Chinese company actually put in a bid for US$46.9M, a $4.2M difference.

Chief Works Officer (CWO) of the Ministry of Public Works, Jeffrey Vaughn had concluded that the reason for the difference could possibly have been because “there was a change in the cost because they have to do cross checks and they realized that there were errors in the bill…”

However, it was later discovered that three of the companies, including the China Railway First Group which had tendered for the project produced incomplete bids, and as such Tender Board had recommended that it be retendered.

But in defence of this, the Finance Minister referred to a release by government which was sent out on Wednesday. Dr. Singh was told that the release didn’t adequately address the issue, but the Minister insisted that it did, and went into cite some sections of it.

He said that a technical evaluation panel evaluated the bids received and recommended that the tender be awarded, not to the lowest or even to the second lowest bidder, but to the third lowest (or second highest) bidder, China Harbour Engineering Co. Ltd., who tendered US$60.418 million.

“It would be recalled that the latter company is engaged on the airport expansion project. The justification given by the evaluation panel for not awarding the contract to the lowest bidder was that the panel had reservations about the bidder’s ability to complete the works at the tendered price,” the Finance Minister said.

He added, “The National Procurement and Tender Administration Board (NPTAB) transmitted the recommendation of the evaluation committee to the Cabinet for its no objection, whereupon the Cabinet withheld its no objection. The Cabinet’s reservations were based on the fact that all of the invited bidders were pre-qualified and therefore judged to have both the financial and technical capacity to execute the works…”

“The matter was therefore returned to NPTAB in view of the withholding of Cabinet’s no-objection, for reconsideration. The same evaluation panel then reconsidered the matter, and revised its recommendation in favour of the lowest bidder, and that revised recommendation was resubmitted to the Cabinet and received its no objection. The contract was therefore awarded to the lowest pre-qualified bidder, China Railway First Group.”

He said that the incident also drives home clearly, the importance of retaining the Cabinet no-objection to contract awards above a certain level.

“Had this Cabinet right of no-objection been denied, as is the Opposition’s wont, the nation would have been $2.8 billion poorer for the absence of Cabinet oversight.”

The Minister was then reminded of the fact that the Chinese Company, regardless of it being the lowest bidder, had incomplete documentation.

As it relates to comments that there was political interference in selecting China Railway despite the discovery, the Minister said, “If that were the case, we would not have opened bids. My favourite newspaper, Kaieteur News, even carried the tendered prices…”

 

 

 

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