Railways signal gear contracts reviewed: US officials reservations not grounded in reality

The Ministry of Railways has reviewed the decision on the basis of reservations expressed by the Economic Counsellor in the US Embassy on awarding of tenders for replacement of old and obsolete signal gear from Lodhran-Khanewal-Shahdara Bagh main line section of Pakistan Railways, but decided that those reservations were not grounded in reality, sources told Business Recorder.
The project was initially approved on February 6, 2008 at a cost of Rs 10.721 billion, with foreign exchange component of Rs 7.989 billion. The CDWP committee had recommended that the Tender Committee of Pakistan Railways, while finalising the process of award of contracts to firms will consider:
a) Marubeni/GE for Lodharan-Khanewal Section at the lowest bid price of $37.393 million.
b) Bombardier for Khanewal-Shahdara Bagh at the lowest bid price of $88.972 million; and;
c) for ATP equipment, Marubeni/GE at the lowest bid price of $6.210 million. The tender committee of Pakistan Railways finalised the tenders on the basis of recommendations of the committee constituted by the CDWP to look into the rationality of rates and scope of work.
On November, 6, 2008, the Executive Committee of the National Economic Council (Ecnec) was informed that the US Economic Councill3or had expressed reservations on the transparency of the tender awarding process. He pointed out that technical irregularities were committed in the case and the real issue was that the tenders for two contracts were invited and both contracts were amalgamated and awarded to one bidder later on. The Ecnec observed that the contract was controversial, and required re-bidding.
The tender committee of Pakistan Railways, while finalising the tenders considered these recommendations, as per directives of the Ecnec but, in view of technical problems, decided to award contracts as under:
a) Lowest bidder Bombardier for Lodharan-Khanewal section at a cost of $30,877,989, instead of $37.393 million of Marubeni (excluding ATP on-board and duplicate/excess items) as follows:
b) Lowest bidder Bombardier for Khanewal-Shahdhara Bagh section including ATP on-board equipment and excluding duplicate/excess items, at a total cost of $98,618,793. In pursuance of the Ecnec decision a meeting was chaired by the Minister for Railways on January 1, 2009, which thoroughly discussed the tenders awarding procedure.
The Minister for Railways in conjunction with Chief Transport and Communication, Planning Commission reviewed the whole case in detail on the basis of facts and figures and agreed that the decision taken by the tender committee of the Railways was based on merit and was in the best interests of Railways, being lowest in cost, without any technical/compatibility issues, besides being fully compliant to technical specifications and tender conditions.
Sources said the issue would be placed before the Ecnec in its meeting to be held on March 26 under the chairmanship of the Advisor to Prime Minister on Finance, Shaukat Tarin.