AHMAD FRAZ KHAN in Dawn, Sept 25
LAHORE, Sept 24: The National Transmission and Dispatch Company (NTDC) has awarded contract for Neelum-Jhelum transmission line to a contractor at a cost 89 per cent higher than the competing bidder and 60 per cent above the PC-I price which was approved only two weeks ago.
Officials say the decision has been taken under “political and administrative pressure.”
It is also in gross violation of rules and regulations set by the Public Procurement Regulatory Authority (PPRA) and the Pakistan Engineering Council (PEC) for such contracts.
Privately, the NTDC officials express “helplessness because of pressure on them”, but officially they maintain “nothing has been done wrong.”
With the induction of new government and its priorities for power crisis solution, pressure on the NTDC grew to quickly move on transmission line for Neelum-Jhelum Hydro-Project which is scheduled to complete in 2016. The government approved PC-I (for around Rs13 billion) on Aug 27 last.
The NTDC, which had floated tenders in August 2012 that stood almost time-barred, dusted off the bid, renegotiated its structural provisions, sought fresh documents and accommodated the contractor at a phenomenally higher cost of Rs22 billion against the PC-I of Rs13 billion and competitive bidder’s offer of Rs11 billion.
On top of that, an engineering consultant was called after the bid opening – a novelty in itself – to prepare fresh cost estimates and justify the new price. The consultant included huge sums in the price such as cost of consultant, administration, contingencies and duties to justify the new cost. They have never been part of bidder’s cost especially after the bid.
According to the critics, which include the Central Contract Cell of Wapda that is considered an authority on such subjects, the violations are so gross that they invalidate the entire process. To begin with, the PC-I had set the ratio of foreign loan at 60 per cent, with the NTDC contributing 40 per cent. The bid was called at the ratio of 85-15 per cent, changing financial terms of the project and driving many eligible contractors out of the bid.
After the opening of the bid, a long process of accommodation started. The contractor was allowed to improve its bid by withdrawing insurance claims, first extending and finally replacing the bank guarantee, changing the price by offering post-bid discounts and finally changing project completion period.
“This change of substance that the PPRA and the PEC rules, which have constitutional sanctity, do not allow,” says an official of the Cell. “If they have to be relaxed or changed, one has to go to parliament which makes them as hard to change as the Constitution of Pakistan does. For this alone, no individual or institution is allowed to tinker with them. In this case, however, these changes are so gross that they render the entire process illegal. The NTDC people know what they are doing but they are helpless,” he said.
The Water and Power Development Authority, which has nothing to do with transmission lines contract, also joined the fray when its secretary wrote a letter (Wapda(sect)/2013-14-B/5387-90) to the ministry eulogising the contractor and the offers it made. When asked, the Wapda spokesman justified the intervention by saying: “The authority had interest in early completion of the line and was just trying to quicken the process.”
Commenting on the situation, the spokesman for the NTDC denied any wrongdoing, saying: “The PC-I of the project was prepared in 2011 and approved in August 2013. Therefore, it doesn’t depict present-day prices. The engineers estimate prepared by Nespak however was comparable.”
Despite repeated efforts, Abid Sher Ali, minister of state for water and power, could not be contacted. http://dawn.com/news/1045262/ntdc-awards-contract-at-exorbitant-cost
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