Court halts $4.6B GPL contract to Chinese firm

Feb 14, 2017 News

The High Court has ordered the Guyana Power and Light Inc. (GPL) and Government to explain

Minister David Patterson

how a Chinese company ended up with a multi-billion-dollar contract to install more than 25,000 smart meters and install miles of news transmission lines.
Yesterday, Chief Justice (ag), Yonette Cummings-Edwards, based on an application from Fix-It Depot, a bidder that was rejected, granted an order directing the Guyana Power and Light Inc. (GPL); Minister of Public Infrastructure, David Patterson; the Ministry and its Permanent Secretary, and the National Procurement and Tender Administration Board (NPTAB) and their representatives, to show cause why a writ of Certiorari should not be issued quashing the award.
In the order by the Judge, it was explained that the respondents rejected Fix-It Depot tender for the rehabilitation of the medium and low voltage distribution network for GPL.
Instead, it was awarded more than $1B over the engineer’s estimate to China National Machinery Import and Export Corporation and China Sinogy Electric Engineering Co. Limited Consortium.
Fix-It and its principal, Paul James, are arguing that the rejection and award and the process of making the decision of the said rejection and award, for $4.6B, were made in violation of the provisions of the Procurement Act 2003 and in violation of the terms of the IFB.
Fix-It had teamed up with Colombian-owned Enrique Lourido for the project.
Fix-It also insisted that the decisions were issued arbitrarily, “unreasonably, irrationally, unlawfully, illegally, erroneously, in bad faith and in breach of the rules of natural justice” and were procedurally improper, unfair, and unreasonable

GPL Chairman, Robert Badal

without the requisite transparency by failing sufficiently to disclose contract award criteria and weightings in advance and by failing to properly apply those criteria which were disclosed.
The company said the decision and award were null and void and of no legal effect. The matter comes up for hearing on March 6 before the judge.
The respondents were reportedly all served with copies of the court documents yesterday.
The contract had engaged the attention of the media and even dragged in the Inter-American Development Bank (IDB), which part-funded the project.
It is part of a bigger one to improve the efficiency of GPL and has been generating attention locally not only because of the billions of dollars involved, but with questions raised over the procedures to evaluate the bidders.
The tenders of the rehabilitation project had been opened since February last year, and were only reportedly granted Cabinet’s no-objection late last year– more than nine months later.
Five companies tendered for the project- China National Machinery Import and Export/Sino Hydro Corporation (China)- $7.1B; Multi Electrical System N.V. (Suriname)- $6.4B; China National Machinery Import and Export (CMC)/China Sinogy Electric Engineering Co. Limited – $4.6B; Cummings Electrical Limited- $3.67B and Enrique Lourido/Fixit Depot- $3.5B.
The award to the Chinese company had raised eyebrows since the company was involved in

Permanent Secretary, Balraj Balram

the construction of seven sub-stations, running new high powered transmissions along the coastland and the laying of two submarine cables across the Demerara and Berbice Rivers.
The cable which was laid across the Demerara River was damaged in July under unknown circumstances. This left the East Demerara and Berbice areas without additional power being supplied by the new Vreed-en-Hoop power station for a number of months. It was only fixed, recently.
A key report by CEMCO, the local engineering company that supervised that project, had criticized the quality of work of CMC, including the laying of the submarine cable in the Demerara River.
The utility programme includes targeting loss reduction, rehabilitation and upgrading of distribution networks, upgrade/relocation of distribution transformers, implementation of systems management software and institutional strengthening.
GPL officials this past week confirmed that the power company has started moves to conduct an assessment of the CMC- built sub-stations to determine GPL officials themselves have been highly nervous about the project and tight-lipped.