GolenGol Hydropower project contract: TI Pakistan accuses Wapda of violating PPRA rules

Wapda has violated Public Procurement Rules 2004 in the award of Rs 1.9 billion contract of GolenGol Hydropower project- Lot-2 & Lot-3.1, civil works and powerhouse in connivance with Al-Fajr, according to Transparency International Pakistan. Transparency International Pakistan Adviser Syed Adil Gilani in a letter sent on September 18 to the Principal Secretary to the Prime Minister has listed following allegations made by the complainant.
---- That at the time of prequalification for - Lot-2 & Lot-3.1, civil works & powerhouse Sambu-Sarco JV (Korean Firm) were pre-qualified, and Al-Fajr were not involved with them as JV partner, neither as sub-contractor nor as local representative.
---- That the tender condition clause 15.3 clearly states that "any bid not accompanied by an acceptable bid security shall be rejected by the employer as non-responsive".
---- That on April 15, 2010, two bids were received and opened, one was KhyberGrace-Technicon- Axor (JV), and the other was Sambu-Sarco JV. Al-Fajr was not part of any of the two JVs and the bid of Sambu-Sarco JV was not accompanied with any bid security.
---- That the acceptable bid security stated in the tender is bank guarantee in exact form. Any variation in the wording of the bid security is not acceptable.
---- That according to PEC standard procedure for evaluation of bids for procurement of works, clause 3.4, a bid is to be rejected on any of the following five grounds: (i) It is submitted by a bidder who has participated in more than one bid. (ii) It is received after the time and date fixed for its receipt. (iii) It is submitted through fax, telex, telegram or e-mail. (iv) It is not accompanied with bid security, and (v) It is unsigned.
1. That KhyberGrace-Technicon- Axor (JV), vide their letter dated April 15, 2010 complained to member (water) Wapda, that tender of SAMBU-SARCO JV was not accompanied with any bid security, and this deficiency was noted by Member Water and all Evaluation Committee members and recorded.
2. That Wapda did not deny KhyberGrace-Technicon- Axor (JV) letter dated April 15, 2010.
3. That according to ITB-23, following requirements are mandatory on Wapda; -23.3- The bidder's name, total bid price and price of any alternate proposal(s), any discounts, bid modifications, substitution and withdrawals, the presence or absence of bid security, and such other details as the employer may consider appropriate, will be announced by the Employer at the opening of bids. -23.4- Employer shall prepare minutes of the bid opening, including the information disclosed to those present in accordance with the sub-clause 23.3.
4. That KhyberGrace-Technicon- Axor (JV) repeatedly wrote letters to Wapda on May 4, 2010, May 25, 2010 and October 8, 2010, but Wapda did not respond.
---- That on the website of Al-Fajr following statement is available: Al-Fajr International, being a local representative, facilitated Sambu-Construction Co S Korea by awarding them the contract for the construction of 106 MW GolenGol Hydropower Project of Wapda (Civil Works) valuing Rs 1.9 billion in August, 2010. The project is under way.
---- That after six months of dealing between Wapda, Al-Fajr and Sambu Construction, Wapda replied to KhyberGrace-Technicon- Axor (JV) on October 20, 2010 about the fake reason for validity of bid responsiveness of Sambu-Sarco JV, which was again contested by KhyberGrace-Technicon- Axor (JV), vide their letter dated November 8, 2010.
Another proof of the non-responsiveness of the bid of Sambu-Sarco JV is that mandatory requirement of preparation of the minutes of bid opening, which shall include all details about the bids declared at the time of bid opening and copies must be signed by all present including bidders, and copies sent to all bidders as per requirement of ITB-23 quoted above.
The above facts presented by complainant proves that nexus between Wapda, and its member Water and AL-Fajr, as the non responsive bid of Sambu-Sarco JV was made responsive only after AL-Fajr became the local representatives of Sambu-Sarco JV. And in November 2010, after six months of bid opening, Wapda declared as legally non responsive bid as responsive.
Transparency International Pakistan requested the Prime Minister to also examine these serious allegations of Wapda - Al-Fajr nexus and the alleged irregularities committed in whole project by Wapda only to induct Al-Fajr as partners, members of JV or representative of contractors/JV. " Transparency International Pakistan is striving for across the board application of Rule of Law, which is the only way to stop corruption," Adil Gilani said.
Copies of the letter have been forwarded for information with the request to take action under the rules and regulations to Chairman, Public Accounts Committee, Islamabad; Minister, Ministry of Water & Power, Islamabad; Chairman, NAB, Islamabad; Registrar, Supreme Court of Pakistan, Islamabad; Secretary Ministry of Water & Power, Islamabad - with a request for holding inquiry, Managing Director, PPRA, Islamabad- with a request to take an action under section 5(2)(a) "monitor application of the laws, rules, regulations, policies and procedures in respect of, or relating to, procurement" and under section (5)(2)(i) of PPRA Ordinance 2002, Kuwait Development Fund, Kuwait, and Chairman, Wapda, Lahore.