GPL’s US$42M transmission lines, sub-stations…Delays cost Guyana US$9M, engineers question equipment

May 27, 2016 News

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In late 2010, the Guyana Power and Light Inc. (GPL) launched an ambitious project to replace its aging transmissions lines along the coast.

It also built seven sub-stations to better manage the energy it produces.

The Infrastructure Development Project was awarded to China National Machinery Import and Export Corporation (CMC). It was touted as a major project to improve quality of service, provide greater operational flexibility, reduce technical losses, and prepare for interconnection with the Amaila Falls Hydro Power, if and when it comes on board.
However, documents coming to light now indicate that the project was fraught with problems. Questions were raised over the quality of equipment supplied by CMC.
Also flagged were delays in the entire project.
It went over budget by more than US$9M ($1.8B). It was commissioned in December 2014, almost two years over the deadline.
Reportedly, a number of those sub-stations are now troubling GPL, with customers reporting an increase in power outages, especially along the coastland in recent times.
GPL is believed to have withheld monies from CMC because of the faults.
The Chinese contractor, CMC, is now one of five companies vying for a project of over $3.6B to supply and install over 28,000 smart meters, transformers and build new low and medium voltage systems, to help reduce GPL losses.
Under that 2010 contract, CMC was supposed to run 96 km of overhead 69 kV transmission lines, including 1.8 km of submarine cable across the Demerara River.

That US$33M project in 2010 was to also connect the Demerara and Berbice grids.
In addition to seven sub-stations, the contractor was to build a Supervisory Control and Data Acquisition (SCADA) system, with a fibre optic link connecting all sub-stations.
According to GPL documents, initially CMC collected US$6.7M of the Chinese Concessional Loan from the Export/Import Bank of China as an advance.
However, as early as June 2012, there were questions over CMC’s handling of the project.
Management consultants Caribbean Engineering and Management Consultants Inc. (CEMCO), which was teaming up with Stebnicki+Partners (S+P) Consulting Electrical Engineers, wrote David Huang, Project Manager of CMC, separate letters raising concerns over delays as well as to question the quality of equipment.

EQUIPMENT QUALITY
The supervising consultants reminded Huang that the issue of the quality of plant/equipment/materials purchased for the project had actively engaged the attention of the CMC, GPL and the engineers.
It was noted that the contract was specific about the various standards that the project must conform to.
The letter cited meetings held between CMC, GPL and the supervisors in October/November 2010, where confirmation was sought on whether the plant/equipment/materials supplied would be manufactured to the standards contained in the contract.
The letter to CMC indicated that the Chinese contractor had confirmed that not all of the equipment would be manufactured to the standards stated in the contract, but rather to Chinese standards, “which CMC claimed are equivalent to international standards”.
The contractor was asked to provide the necessary documentation from its proposed suppliers and manufacturers for review and possible approval.
The contractor submitted information relating to the standards of the equipment in April and May, 2011.
However, the supervising consultants said that they were again unable to approve the manufacturers as meeting the standards in the contract.
It was agreed that the contractor would source products from reputable firms that supply similar equipment to overseas markets.
The consultants ordered that all the performance requirement of equipment, including all major equipment, would have to be verified by factory tests.
“These test results are to be submitted to the engineer at least one week prior to shipment. CMC will perform thorough checks on the equipment on site prior to installation to verify that there was no damage during shipment.”
The leaked letter of the consultants disclosed that towards the end of 2011, CMC had assembled the major part of the equipment to ship to Guyana, and even though the requirement to submit shop drawings prior to shipping was not met, the contractor sought and received GPL’s permission to ship the equipment anyway.

WARNINGS
The consultants warned CMC that the GPL approval did not relieve them and their suppliers from the responsibilities under the contract.
On February 8, 2012, the consultants reminded CMC about their obligations to ensure the quality of equipment supplied met the contract requirements.
“With respect to testing prior to installation, during S+P’s (consultant) site visit in March we reviewed this with CMC and noted the following: CMC did not appear to have all the personnel and equipment to carry out this exercise.”
The equipment was at that time stored in CMC’s storage facility in Sophia and was not readily accessible for testing.
Among other things, the consultants demanded a list of personnel that would be carrying out the tests; a work programme indicating when and where the checks and testing would be undertaken; and a list of the overseas clients from the equipment manufacturers to establish that they meet the requirements.
The consultant made it clear that it would compare the tests from the factory to results of their independent tests.

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