Turkish shipyard facing blacklisting: PQA acquires new $2.2 million vessel with 'refurbished' engine

Having long been prone to chartering crafts, the management of Port Qasim Authority (PQA) took about four long years to acquire a new Turkish-made pilot boat of which two caterpillar main engines, the port operator suspects, are refurbished. While its technical team stays out of any accountability for its failure to detect a "defective make" of PB Lahoot's main engine during the year-long acquisition process, the PQA is contemplating to "blacklist" M/s Sanmar Denizcilik, and possibly its local agents from M/s Salateen Syndicate, for the supply of a faulty vessel.
Supplied to PQA in May 2013, the pilot boat is presently lying out of order for more than last two months, since March 19, when the C-18 model main engine of the vessel had suffered a major breakdown. The brand-new pilot boat, which the Authority had acquired at a cost of $2.2 million through a dubious tendering process that had started in September 2011, developed what PQA officials believe an 'unusual' fault only after 5129 running hours.
The sources, however, put the number for total running hours at less than 4000 hours, which warrants a major overhauling of the engine. "Within 25 months of its acquisition the boat is out of order," they wondered. The port operator too is scratching its head. "This is very unusual in marine practice and indicates that the engine may have been refurbished or otherwise of defective make," reads a letter the PQA wrote to the Turkish builder of PB Lahoot on the 5th of this month.
Notified of the engine failure on March 26 and April 1, neither M/s Sanmar nor its local representatives from M/s Salateen responded to PQA's repeated reminders. "No representative as to date has visited PB Lahoot to analyse the damage or share technical support for repair/renewal of the engine," laments the letter undersigned by Secretary PQA Muhammad Saqib. The repair of the vessel, the sources said, would cost the PQA about Rs 140 million. The sum, they claimed, stands exclusive of installation and transportation expenses the Authority would be incurring.
Regretting the Turkish shipbuilder's "careless business approach', the PQA claims to have discovered during technical inspection of the vessel that its engine broke down because of an inherent design or make default on the part of M/s Sanmar Shipyard. The Port Authority, therefore, is planning to claim damages or blacklist the Turkish firm in Pakistan. "PQA reserves the right to claim damages and/or blacklist M/s Sanmar Shipyard from any future dealings with PQA or other Pakistani government departments," it warned.
As is evident from the hard-worded content of the letter in question, the port operator tends to deal with the foreign shipbuilders under Rule 19 Listing of Suppliers and Contractors of Pakistan Public Procurement Rules 204. If sources are to be believed the failure of PB Lahoot's engine is not the only skeleton in the closet of PQA.
"Sanmar also had tricked PQA in the tendering process," they claimed recalling that PQA had advertised in September 2011 a tender for the procurement of an ASD tug of 65 tons bollard pull (TBP) and a pilot boat. The Turkish shipyard was declared financially qualified along with M/s Mustang Wales of UK for the pilot boat. On financial bids opening in January 2012, M/s Sanmar appeared as a lowest bidder having demanded $1.89 million for the pilot boat compared to M/s Mustang's $3.898 million.
When scrutinised later, the PQA found that the company's actual bid stood at $2.2 million and not $1.89 million. "They said their offer did not include mobilisation charges," the sources said. The fact, however, remains that even its revised $2.2 million offer made M/s Sanmar the lowest bidder. Moreover, the sources said, the Turkish shipbuilder had also failed to meet PQA's tender demand of providing the port operator with the spare parts required for maintenance of PB Lahoot.
"PQA had to float a separate tender (on January 16) for the procurement of spares for the pilot boat," they said. The deal is expected to cost the port operator more than Rs 5.5 million. Having submitted its contract agreement without a stamp duty, M/s Sanmar is also accused of having manipulated issues relating to the payment of performance bond and retention money "in connivance with PQA officials."
The PQA, allegedly, had returned to M/s Sanmar the money it had deposited on account of performance bond and retention as soon as the company brought the pilot boat to Port Qasim in May 2013. The amount, however, was later resubmitted when a newspaper blew whistle on the irregularity.