Ministry seeks supplementary funding for GPL smart meter project

Jun 19, 2017 News

The Ministry of Public Infrastructure will be approaching the National Assembly to approve supplementary financing towards the Guyana Power and Light’s (GPL) Power Utility Upgrade Programme (PUUP).
This request was placed on the Financial Paper No.1 of 2017 and was to be voted on during the last sitting of the National Assembly on Friday. However, the sitting ended without the Financial Paper being addressed.
According to information provided in the document, the Ministry is seeking a supplementary provision of $1,997,131,364 towards the project. The previous provision that was voted on was $1.2B. That amount was approved during the consideration of the estimates of revenue and expenditure for the 2017 Budget in the National Assembly.
According to the Financial Paper, the supplementary amount being sought is for the provision of additional inflows under the Inter-American Development Bank (IDB) grant and loan operations for the PUUP to facilitate payment of mobilisation advance and other areas under the programme, including supervision for civil works, management strengthening, and Lot B works under the rehabilitation of the low voltage distribution network component.
Lot A of the project was awarded to China National Machinery Import and Export Corporation (CMC) at a cost of $4.6B. As it relates to advance payments being made to CMC, the Bidding Document for Lot A states that the contracting agency, GPL, shall provide an Advance Payment on the contract price as stipulated in the General Conditions of Contract (GCC). This advance payment is to be guaranteed by a security and is to be 30 per cent of the contract price.
The Financial Paper went on to say that the mobilisation advance for Lot A of the project was projected to be paid in 2016. However, the payment could not have been made in 2016, since it was delayed due to a bid protest against the award of the contract to CMC by another bidder.
The contract was signed in December 2016 between GPL and (CMC) which is partnering with China Sinogy Electric Engineering Company Limited.
That evaluation process for the award of the contract, which is valued $1B over the engineer’s estimate, was challenged by Fix-it Depot, a bidder that had partnered with a Colombian company to compete for the project.
However, the project was allowed to continue, with CMC remaining as the company with the winning bid. GPL and the Public Infrastructure Ministry have argued that the project is important to Guyana and should not be delayed, since its success will lead to a reduction of both technical and commercial losses.
It is expected that the constant blackouts across Guyana will be reduced significantly. As the project is rolled out, new power transmission lines complete with line hardware will be installed, coupled with smart meters.
According to the Bidding Document, the completion date for Lot A of the work is 540 days from the date when the notification of commencement is given. Information provided to Kaieteur News indicates that the project was scheduled to begin in May of this year.
Based on information received, works have begun, as utility poles are being planted.
As of today, this exercise has been completed in the East Berbice area. Both Lot A and Lot B of the PUUP are parts of the larger US$64M PUUP aimed at improving management capabilities, operational efficiency and infrastructure investments for loss reduction in the GPL system.
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.
More than this, CMC was criticised in a report done by Caribbean Engineering and Management Consultants (CEMCO) for works done on a GPL Engineering, Procurement and Construction contract at a cost of US$33.9M.
That report had said that CMC is not a construction company but rather a trading company for the export of Chinese engineering products. It was noted that CMC had engaged other Chinese firms to perform all aspects of that project, except for purchasing goods needed for the contract. However, there were shortages for the supply of these items, and those that were supplied did not satisfy the standards required by GPL.

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