Luncheon admits some contractors ‘shaft’ the government

Jul 08, 2014 News

…stands by China Railway for road expansion

“I am willing to concede that there are instances when we have indeed gone behind the lowest responsive tender and indeed we get shafted. I won’t pull any punches; we don’t have to hide that. That’s a fact. There are instances when the lowest responsive tender turned out to be a disaster.”
This is according to Head of the Presidential Secretariat (HPS) Dr. Roger Luncheon as he was addressing the issue of Cabinet’s no objection in awarding China Railway First Group Company Limited, the contract to upgrade and widen the East Coast Demerara Public Road even though it was found by the National Procurement and Tender Administration Board (NPTAB) to have submitted to a defective bid.

Head of the Presidential Secretariat Dr. Roger Luncheon

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$42.7M 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 the Tender Board had recommended that it be retendered.
Luncheon said that even though running after the lowest responsive bidder turned out to be a disaster in the past, with China Railway Co. the case was different.
He said that Cabinet understood, clearly, that the tenders were deemed technically fit. They were cleared by the evaluation committee as all being technically equipped to discharge this contract, our laws our practices commit to under those circumstances the one with the lowest tender.”
Additionally, beyond being the lowest bid China Railway was responsive in the application of its technical and other considerations. “So when we say the lowest competent, the lowest responsive, we are covering all angles. First you must be responsive and then when you are the lowest” said Luncheon.
He said that they were not committed to the bid that NPTAB was contending because it was not the lowest and “it was not to the Cabinet’s satisfaction.”
He said that beyond that, the company China Railway “can give us the product that we are looking for”
According to Luncheon, China Railway Co. “is a company that, as indeed of all of the others, has done work on building roads in very difficult circumstances.” He made mention of the company doing Lots 1 to 7 of the Amelia falls road project and other cases “where they went and delivered the goods.”
“If I am here, building roads in the country surely it will be much easier for me to mobilize and my cost starting off will be infinitesimally lower than a man who doesn’t know anything about building roads, he has to start from scratch” said Luncheon.
He said that those were the consideration that “Cabinet felt weren’t dealt with properly and that is why our no objection was withheld.”