Questions as $3B GPL contract annulled

Jan 11, 2018 News

A $3B tender to install more smart meters and transmission lines for the Guyana Power and Light Inc. (GPL), to improve efficiency and reduce technical losses, has been annulled.

Responding to questions yesterday on the delay in the award of that major project, Finance Minister, Winston Jordan, yesterday disclosed that Government has asked for ‘Lot B’ of the

Power Utility Upgrade Programme (PUUP) to be annulled because of “certain issues”.

Jordan did not immediately explain what the issues were.

Moves will be made now for this phase of the project to be retendered with another part, ‘Lot C’ to also be advertised.

Jordan denied that the project was being held up at the Ministry of Finance.

Rather, the National Procurement and Tender Administration Board (NPTAB) has “concurred” that the tender should be annulled and retendered.

Questioned whether an award had been made before the decision to annul was made, Jordan said that none had been made.

The national procurement laws are clear…the entire process can be annulled before the award of a contract is made, he said.

This would not be the first time that PUUP is running into problems.

One part of the programme which is to run low and medium voltage lines along the coastlands and to install thousands of smart meters ran into trouble last year after one of the bidders took Government to court after an award was made to CMC.

CMC is a Chinese company that was questionably awarded the contract for more than $4.6B. This was about $1B above the engineer’s estimate.

However, the court ruled in favour of Government after GPL and its lawyers argued that the funding from the Inter-American Development Bank and the European Union was under threat because of time constraints…a contract had to be awarded urgently. A retender, they argued, was out of question.

That ‘Lot A’ project is still ongoing.

Yesterday, Minister Jordan acknowledged that the previous contract had “lots of issues”, even ending up in court.

He also noted how the final amount went to almost 19 percent above the engineer’s cost.

This same ‘Lot B’, under intense public scrutiny because of questions over the capacity of the Chinese contractor, had come up last year with the tenders in August granted an extension for changes to the tender documents.

This newspaper was then told that GPL has asked bidders to propose a box to house the meter that is made of metal. Previously, the box was required to be made from polycarbonate material which is a tough plastic.

Further, the body of the distribution box was originally to be made from polycarbonate as well, but is now to be made from metal. It is unclear why GPL would have made the change from polycarbonate to metal.

Polycarbonate is a durable material that withstands harsh conditions. It is impact resistant and is strong against vandalism because of it having unbreakable properties. The material also protects against ultra-violet radiation when compared to metal, especially in hot temperatures.

Approximately 25,000 smart meters are supposed to be installed for Lot A.

Under ‘Lot B’, some 4,700 poles have to be planted, along with 16,000 smart meters and 118 kilometers of new transmission lines.

CMC had built seven sub-stations a number of years ago, a project which also included the running of new high-powered transmission lines along the coastland and the laying of two submarine cables across the Demerara and Berbice Rivers.

CMC was criticised in a report done by Caribbean Engineering and Management Consultants (CEMCO) for works done on the GPL Engineering, Procurement and Construction contract which was valued at 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.

GPL is facing major technical problems with almost 30 percent of the electricity it produces being lost to theft and technical problems.

A reduction of those losses would result in better services and lower cost for customers, GPL had argued.

As of now, GPL remains the company with the largest number of complaints filed with the regulators.

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