TIP alleges WAPDA violated rules in awarding hydropower project to blacklisted contractor

Transparency International Pakistan (TIP) has alleged that the Water and Power Development Authority (WAPDA) violated public procurement rules by awarding contract for the Golen Gol Hydropower Project to an unqualified consortium, which includes a firm blacklisted by the World Bank.
A letter written by TIP Adviser Adil Gilani has drawn the attention of WAPDA Chairman Shakil Durrani towards a compliant of the violation of Public Procurement Rules 2004 in awarding contract for Golen Gol Hydropower Project-Lot-3.2 E&M Works to an unqualified consortium, and warned that the national exchequer could suffer a loss of Rs 910 million if the contract was not withdrawn.
“This particular procurement is stated to be financed by Kuwait Development Fund for E&M Works (US$ 37 million). The process shall be in accordance with Public Procurement Rules 2004, as Kuwait Development Fund (KDF) has not prescribed in the loan agreement its own procurement Standard Bidding Documents (SBDs),” the letter said, a copy of which is available with Pakistan Today.
The TIP said the prequalification requests were received on March 31, 2011, and M/s Rainpower had also applied for prequalification. But 51 days after the last date of submission, WAPDA allowed change in the JV of M/s Rainpower/ARVEA T&D Pakistan (Pvt) Ltd, to new JV of M/s Rainpower/ALSTOM Grid Pakistan, as per letter dated May 5, 2011, just a few days before the opening of tenders, June 30, 2011, the TIP said. “The Consortium of M/s Rainpower/ALSTOM Grid Pakistan has added two more companies, M/s INDAR and M/s Al-Fajr, without any approval of WAPDA, in violation of Article 29.1 of the Prequalification documents, promptly after the notification of the results of the prequalification, the employer shall invite bids from all the applicants that have been pre-qualified,” the letter stated. The TIP said the bid submitted by JV of M/s Rainpower/ALSTOM Grid Pakistan, M/s INDAR and M/s Al-Fajr was therefore not a pre-qualified joint venture, and illegal.
Another point raised in the letter was that the principles of M/s ALSTOM Grid Pakistan, M/s Alstom Hydro France and M/s Alstom Network Schweiz AG (Switzerland) had been debarred by the World Bank on February 22, 2012.
“The tenders were opened on 30th of June 2011, after pre-qualification process, as per the bid opening results ANDRITZ price was lowest at around US$48.0 million while price of M/s Rainpower, was more than US$ 58.0 million but after manipulations WAPDA was trying to award the contract to unknown company i.e. Rainpower in comparison to the top company in the world for hydropower ie ANDRITZ Hydro, despite the fact the international consultant Fitchner had also recommended ANDRITZ,” said the TIP.
The letter said WAPDA had violated rules by ignoring the financial aspect and the lowest evaluated responsive bidder, against the recommendations of WAPDA’s consultant. The TIP added that if the allegations of the complainant were correct, then under Rule7, integrity pact, 10 times fine (Rs 9.10 billion) may also be required to recover from the contactor, along with action under the NAO 1999. “TIP also requests the Chairman (WAPDA) to kindly provide copies of the evaluation report and contract agreement under Rule 47 and examine the complaint and if found correct, under Rule No 50, this procurement is deemed to be declared as mis-procurement,” concluded Adil Gilani.