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Minister asks WAPDA to submit report on violation of rules

Minister for Water and Power Chaudhry Ahmad Mukhtar has asked Chairman WAPDA Syed Raghib Abbas Shah to submit a report on the alleged violation of rules in evaluating bids for contract of procurement of electrical and mechanical equipment for 106MW Golen Gol Hydropower Project.

Sources in the Ministry of Water and Power said that the minister expressed concern over the alleged violation, which was first pointed out by Transparency International Pakistan, then discussed by the National Assembly Standing Committee on Water and Power. The case is also being scrutinised by the National Accountability Bureau.

According to the details of the case, four international prospective bidders were pre-qualified by WAPDA to take part in the bidding of Golen Gol Hydropower Project (Engineering and Mechanical Works) which included M/s Andritz Hydro Austria and M/s Farab Iran as single parties while the others including M/s Rainpower Norway – M/s Alstom Grid Pakistan and M/s UCM Recita Romania – M/s Litostroj (Slovenia) – M/s Technicon Pakistan were joint ventures.

The Rainpower, a joint venture of four companies, was deficient in two qualifications – a turnover of $25 million for the last five years and experience of similar projects for 10 years. Despite this it was pre-qualified by WAPDA. Furthermore, the World Bank recently banned one the partners of Rainpower Joint Venture on corruption charges.

On receiving the bids, WAPDA opened tenders for the contract of Golen Gol Hydropower Project on June 30 last year. One M/s Andriz Hydro became the lowest bidder with a price of $48 million against more than $58 million by M/s Rainpower.

International consultant M/s Fitchner of Germany, who was the technical consultant for the project, recommended the lowest bidder M/s Andriz Hydro as contractor. According to a report compiled by the Ministry of Water and Power, WAPDA, instead of going along with the consultant’s recommendations, initiated a parallel process of re-evaluation and unilaterally overloaded the price of the lowest bidder through its own valuation for award of the contract to the bidder of its choice.

Moreover, WAPDA did not advertise the project on the web – a pre-requisite under the PPRA rules.

The process later adopted by WAPDA for prequalification of bidders was not approved prior to the bidding process – which is against the spirit of the pre-qualification process.

Golen Gol Hydropower Project is being constructed on the River Golen Gol, a tributary of the River Mastuj in Chitral district of Khyber Pakhtunkhwa, about 380 kilometres from Islamabad. On its completion, this project will generate about 436 million units of electricity (Gwh). It is partially financed by Saudi Fund for Development, Kuwait Fund for Development and OPEC.

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