Additional GPL purchase from Wartsila does not run afoul of Procurement Act – source

Provisions in the Procurement Act would have permitted the Guyana Power and Light Company (GPL) to procure US$18 million in additional generation from Wartsila without going to tender, a source within the national tender board has said.

Recently, Chief Executive Officer of the Guyana Power and Light Company (GPL) Bharrat Dindyal said that the contract inked last month between the power company and Wartsila for the provision of a further 15.68 megawatts in generation capacity was an extension of a proposal Warstila made last year when it provided the 20.7 megawatt plant. He said that by agreeing to this proposal, “a locked in price” was guaranteed. He said too that the Wartsila engines currently being used by GPL have performed well and are durable.

When questioned about the legality of this, the source pointed to Section 28 (d) of the Procurement Act 2003. According to this section, which deals with single-source procurement, “the procuring entity, having procured goods, services, equipment or technology from a supplier or contractor, determines that additional supplies must be procured from that supplier or contractor for reasons of standardization or because of the need for compatibility with existing goods, services, equipment or technology, taking into account the effectiveness of the original procurement in meeting the needs of the procuring entity, the limited size of the proposed procurement in relation to the original procurement, the reasonableness of the price and the unsuitability of alternatives to the goods in question…”

The source said that in such cases, the company would have to approach the National Procurement and Tender Administration Board (NPTAB) for approval. According to the source, once the contract is above $15 million the contract would have to go to Cabinet for it to offer “no objection to.” Efforts to ascertain whether this particular procedure was followed regarding the recent procurement of generation engines were fruitless, but an official told this newspaper that GPL generally had a good record when it came to procurement.

Meanwhile, when contacted, chartered accountant Christopher Ram pointed to Section 24 of the Procurement Act, which allows for public corporations, with the approval of the NPTAB to conduct procurement according to their own rules and regulations provided that these rules do not conflict with the Procurement Act or Regulations.  He said it could be possible that the GPL may have needed to go through the regular process but that it would depend on GPL’s own rules and regulations.

The relationship between GPL and the Finland-headquartered Wartsila, dates back to 1992 with the first such plant at Garden of Eden, East Bank Demerara. To date the company has installed 68.7 megawatts of Wartsila capacity, which continues to perform extremely well, a Government Information Agency (GINA) press release had stated. The newly acquired engines are expected to be operational by August 31, next year.

The contract between GPL and the Finland-headquartered company was signed less than a month after President Bharrat Jagdeo incidentally announced at the Guyana Labour Union’s (GLU) delegates’ conference that US$20 million more would have to be spent on additional generating capacity.

Last year, when the 20.7 megawatt plant was established at Kingston there was no indication that an additional investment would have been required.

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