Cabinet delivers US$57.6M contract to China Railway

- sidelines tender board after lobby by ex-gov’t official

Cabinet has intervened to award a US$57.6 million contract for the East Coast Demerara highway project to China Railway First Group, raising concerns over political interference in the work of the National Procurement and Tender Administration Board (NPTAB).

A source told Stabroek News that government sidelined a proposal made by the NPTAB and gave instructions for an award and subsequent no-objection to the firm, based upon lobbying by a former senior member of government.

The source explained that four companies submitted bids for the project but three of them had incomplete documents, while the other went over the estimate. As a result, the NPTAB made proposals but was told it would be taken care of before learning that China Railway First Group would be awarded.

On May 13, this year, four Chinese construction companies placed bids for the Ministry of Public Works project, which entails work from Better Hope to Belfield Village:

 

Bidder                                                                                                                         Amount    

 

China Harbour Engineering Co Ltd (CHEC)                                             US$60.4M

 

China State Construction Engineering Corporation (CSCEC)           US$71.4M

 

China Railway First Group Co. Ltd                                                              US$46.9M

 

China National Machinery Import, Export Co. Ltd (CNMIE)            US$55.6M

 

Engineer’s Estimate                                                                                        US$57.6M          

 

Three of the firms have been doing business with Guyana. China Harbour Engineering Co Ltd is the contractor of the US$150 million expansion to the Cheddi Jagan International Airport (CJIA); China National Machinery Import/Export Company Limited is the company that was involved in the construction of problematic US$200 million Skeldon expansion project; and China Railway First Group Company Limited was the contractor for the Amaila Falls Hydroelectric Project.

The project will be one of the costliest in recent times in terms of infrastructural works, after the ongoing CJIA expansion and Marriott Hotel construction.

The source explained that during the evaluation of the bids, it was recognised that three companies, CSCEC, CNMIE, and CRFG, had incomplete bids; that is, there were errors in documentation. The other company, CHEC met all the requirements but was US$2 million over the engineer’s estimate.

Given the details of all the bids, the NPTAB’s evaluation committee said that the bid should have been retendered. However because of a number of factors, the board made a recommendation to the Ministry of Public Works.

According to the source NPTAB explained that CRFG’s low bid of US$46.9 million was an unrealistic one and it was recommended that that company’s bid though “the lowest bid in dollar amounts is not the lowest responsive bids although it is what most contractors think anyway, but there are a number of factors taken into consideration that makes the respondent of a bid the lowest responsive bidder.”

The source added “That US$46.9 million would mean that company coming back for money for variations. It’s a trick seen in bidding throughout the world and something that procurement bodies try to prevent.”

The source said recommendations for options that can be explored was that the bid be awarded to the company with all its documentation in order. It was also suggested that although the bid was higher than the estimate, the Ministry of Public Works negotiate with that company for a reduction.

However the source said that at a meeting of Cabinet, the former senior member led a defence for China Railway First group and recommended that company for the project.

The documents giving that company the project were drafted and it is expected that soon Head of the Presidential Secretariat Dr Roger Luncheon would announce the award.

The source does not believe that any of the other Chinese companies would object at the handling of the award. “China stands as a united front they would have their differences and war internally,” the source said.

“I think it is for reasons like this that the opposition is calling hard for a procurement commission… When you have government interference of an autonomous body then what next?” the source questioned.

The opposition parties have for years been campaigning for the establishment of the constitutional Public Procurement Commission. With its establishment under the current laws, Cabinet’s role in the award of contracts would be gradually phased out. The government, however, has been resisting the commission until Cabinet’s role in the process is retained by law.

The government was recently accused of gifting land to CRFG but explained that it was part of a deal for a fixed contract price for the Amaila Falls Hydropower Station and construction of a crucial section of the access road. AFC Khemraj Ramjattan had requested that the government explain the land transfer and why there was no price attached.

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