‘NTDC be stopped from scrapping tender’: Chinese firm seeks support of ADB and minister

ISLAMABAD: A Chinese firm has sought support of the Asian Development Bank (ADB) and Minister for Power, Khurram Dastgir Khan to bar NTDC from scrapping a tender of 220kV double circuit transmission line for looping in/out in Sindh being funded by the ADB.

According to M/s China Energy Engineering Group Hunan Electric Power Design Institute Co, Ltd (CEEC HEPDI, as per information in the business circle, it has been recommended for contract award whereas bid evaluation report has also been shared with ADB.

However, some formations have recommended scrapping the tender and proposed re-tendering citing that there is a conflict of interest as both the bidders have “China Energy Engineering Group” in their name.

The company, in its letter to Minister for Power, Khurram Dastgir Khan and Managing Director NTDC, submitted that “conflict of interest” is discussed in sub-clause 4.3 of section-1 (ITB) of the bidding document which states “all bidders found to have a conflict of interest shall be disqualified… a bidder may be considered to be in a conflict of interest with one or more parties in this bidding process if (a) they have controlling shareholders in common; or (b) they receive or have received any direct or indirect subsidy from any of them; or (c) they have the same legal representative for purposes of the bid; or (d) they have a relationship with each other, directly or indirectly or through common third parties, that puts them in a position to have access to material information about or improperly influence the bid of another bidder or influence the decisions of the employer regarding this bidding process.

The company argued that it is established based on the detailed information on beneficial owner, Management & Board of Directors (BoD) of M/s CEECNEPC-II that the bidders do not have any controlling shareholders in common. Hence, this status in not applicable in this case.

The company maintains that it also established from the detailed financial statements and associated notes that none of the bidders have received any direct or indirect subsidy from each other. Hence, this statue is not applicable in this case.

It is also established from the power of Attorney attached with both of the bids that the bidders do not have same legal representative for the purpose of this bid. Hence, this statue is not applicable in this case.

The company maintains that it is established from the complete working flow, the management of M/s CEEC CEPC-II is purely independent of external influence. The Executive Director is appointed by BoD of the company and both the Executive Director and the BoD members of both bidders are different & independent of each other and thus in no way can have access to any material information or influence any decision. Hence, this statue is not applicable in this case.

“This clearly establishes that both the participants - M/s CEEC NEPC-II and M/s CEEC HEPDI are completely independent of each other and do not have any financial or management relation with each other as the company comply with all the conditions laid down in the bidding documents and it does not come under the ambit of any conflict of interest,” so maintained the company.

Some formations have suggested to scrap the bidding process and to go into retendering process citing following reasons, which are completely baseless: (i) only one response bidder; (ii) price is 20 per cent higher than engineer’s estimate; and (iii) both bidders have conflict of interest.

The company further stated that two bids were received so competition was open and participation was appropriate. Also, the bid price of the selected bidder is higher than the engineer’s’ estimate due to current inflation and currency depreciation and this difference is very well justified and reasonable, adding that it is quite definite that in case of re-tendering, new prices will be much higher than this.

During the last two years, whenever NTDC has scrapped any tender and entered into rebidding process, the new bids received are always at least 20 %-30 % higher than the previous bidding stages’ lowest bid which ultimately brought not only substantial monetary loss to NTDC but also delayed project completion timelines.

The company maintains that as per the provisions of the bidding documents, the bidders do not have any conflict of interest and there is no bar on them per the bidding documents which leads them to disqualification based on a common prefix of the name.

The company has requested the ADB to look into the matter and direct NTDC to review their recommendations of scrapping the tender on the basis of “conflict of interest” and advise them to proceed further towards concluding the bidding process and to award the contract to M/s CEEC NEPC-II having the most advantageous bid of the bidding process.

The project envisages one circuit of Mirpur Khas - T.M Khan Road T/Line at Hala Road 220kV grid station (approximately 20 kms).

Copyright Business Recorder, 2023