$4.6B award to Chinese company…Court holds emergency sitting after Govt. argues billion$ will be lost

Feb 17, 2017 News

A major battle is heating up in the High Court over a multibillion-dollar contract to run new power

Attorney-at-law, Devindra Kissoon

transmission lines and over 25,000 smart meters on the coastland.
The contract was green-lighted to be awarded to a Chinese contractor for over $1B above the engineer’s estimate, sparking a local bidder, Fix-It Depot, who was partnering with a Colombian company, to challenge the evaluation process.
Yesterday, in a rare and surprising move, the court brought forward the hearing date of March 6th, after Government applied for the matter to be dealt with urgently.
During an open court session, it was Attorney General, Basil Williams, himself, who appeared to make his case before Chief Justice (Ag) Yonette Cummings-Edwards for the temporary order granted Monday to be overturned. He was accompanied by a battery of lawyers.
Named as respondents in the case brought by Fix-It Depot were the Guyana Power and Light Inc. (GPL); Minister of Public Infrastructure, David Patterson; the Ministry and its Permanent Secretary, Balraj Balram, and the National Procurement and Tender Administration Board (NPTAB).
According to the Attorney General yesterday, the project is an important one for Guyana’s power sector with the contractor, China National Machinery Import (CMC) and its partner Export Corporation and China Sinogy Electric Engineering Co. Limited Consortium, about to receive their advance to start work. However, the court order has virtually halted the process.
After hearing the arguments of both the Attorney General and lawyer for Fix-It, Devindra

Chief Justice (Ag), Yonette Cummings-Edwards

Kissoon of the London House Chambers, the Judge allowed the respondents until 4pm yesterday to prepare and submit an affidavit in response to charges made by the local bidder.
Kissoon was told, in turn, to make his submissions by 10am today after which another court session will be held at 4pm.
According to the Attorney General, Minister of Finance Winston Jordan was booked to fly to Washington next week. He stated that the project was urgent because if implemented it would reduce the blackouts in the country. He argued that the Procurement Act does not apply, but that the Inter-American Development Bank (IDB) rules apply instead for the project. IDB and the European Union are funding the part-grant/part loan project to the tune of $4.6B.
The Attorney General insisted that Paul James, the principal of Fix-It, failed to exhaust his administrative remedies and that Guyana stands to lose billions of dollars if the Court does not discharge the Order Nisi. He also stated that Mr. James would suffer no harm if the temporary order was discharged.

DUTY BOUND
However, Kissoon, in his replies, made it clear that no urgency could trump illegality, and

Permanent Secretary, Balraj Balram

accordingly the court was duty bound to review the merits of the matter. He noted that the tender evaluation process took more than nine months to be completed, after bids were opened by the NPTAB since February last year, and accordingly, there could not be a real and sudden urgency.
He also quoted a critical supervising engineer’s report of CMC’s past work in Guyana and with GPL which criticized the Chinese company’s performance on a US$40M sub-station, transmission lines and submarine cable project. He said this and other reasons would compel the court to quash the award for the benefit of the country.
Kissoon had previously argued that the decision to award the contract to CMC in no way benefits the public since the tendered sum is $lB higher than Fix-It’s tender – potentially resulting in a waste of taxpayers’ funds. The amount that CMC would be getting, he had said, is 25 percent higher than the engineer’s estimate.
Kissoon argued that not only was the proper administrative route not taken but that in any event, the proper evaluation process was not followed. He stated that Mr. James was harmed since not only was there an illegality, but in any event, the Order Nisi seeks to have GPL reconsider its decision to disqualify Fix it.
The Chief Justice declined to discharge the Order Nisi and ordered that the Attorney General serve his affidavit before the afternoon was out and that Kissoon reply by 10am today.

NO SENSE
Meanwhile, according to the affidavit in response to the claims of irregularities made by Fix-It,

Attorney General Basil Williams

the Permanent Secretary (PS) of the Ministry, Balraj Balram in court documents submitted yesterday afternoon noted that the local Procurement Act could not have been breached, as the evaluation process used was according to IDB rules.
The PS argued that it would make no sense if the court went ahead and granted an order to overturn the award to CMC, since this would only result in the contract having to be re-tendered, a process which would last a minimum of six months, and which would result in Guyana losing the money.
Asking that the court discharge the temporary orders, Balram also argued that there is no evidence suggesting any impropriety by some of the respondents, as is the claim.
Fix-It, which partnered with Colombian-owned Enrique Lourido, contended in its court action that the award for the project was made arbitrarily, “unreasonably, irrationally, unlawfully, illegally, erroneously, in bad faith and in breach of the rules of natural justice” and was procedurally improper, unfair, and unreasonable 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 project 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.
Fix-It and its partner came in the lowest, but were disqualified and later told they had not done enough work to the required value.
The award to the Chinese company had raised eyebrows, since the company was involved in 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.
CMC was described in the CEMCO report as a spare parts company.