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NTDC’s wrong assessment to escalate cost, delay power project

The National Transmission and Dispatch Company (NTDC) incorrectly evaluates bids for around $80 million power transmission project, giving undue favour to its blue-eyed party, besides depriving local industry of millions of dollars worth economic activity, sources said on Saturday.

The wrong bid evaluation could ultimately result in cost escalation of the project and delaying its execution, sources said.

The NTDC management in its ‘secret’ evaluation of tender for the construction of power transmission line from 747MW Guddu Power Plant (GTS-01-Package-1) incorrectly termed TBEA’s bid as lowest. Top bosses in the NTDC are hiding this decision from other bidders, sources said.

The tender was opened on October 8, 2012, about five months back and the contract awarding process is grossly delayed and yet to be completed. As per the rules, the NTDC should have completed tender awarding process within 60 days.

Sources claimed that the announcement of contract awarding was delayed due to clandestine maneuvering of blue-eyed party and some of the NTDC officials for declaring other parties non responsive.

They alleged that Zulfiqar, a retired deputy director of NTDC Design Wing in connivance with the top officials of NTDC are all set to get the decision in favour of their chosen bidder. The former deputy director is the front man of one of the bidders.

The same company got a similar tender of 500kV substation project in Rahim Yar Khan, which is scheduled to be completed in 2012. The project already got delayed. Sources said NTDC instead of taking punitive action against a nonperformer, is going to award another important project to them.

When contacted, Khalid Hussain Rai, managing director of NTDC, did not respond on the issue, while Abdur Razzaq Cheema, chief engineer (design), who is directly responsible, also refused to comment on the allegations leveled against the officials of the company.

Cheema said that all matters regarding the award of contract is confidential and, thus, cannot be discussed. The NTDC Design Wing has already lost financing facility by the Asian Development Bank (ADB) for a similar project due to similar negligence.

Sources said that six bidders participated in the tender for the construction of power transmission line and allied infrastructure in order to connect Guddu Power Plant with the national grid. As per the evaluation, sources said, three bidders, including TBEA, Chint and China Gezhouba Group Company Limited (CGGC) emerged as top runners.

Since the financing of this tender is on the buyers credit basis to be proposed by the bidder, the evaluation of the tender will be done by combining the bid price and proposed financing terms to calculate the present worth factor on the evaluated bid price according to the tender conditions.

The bidder with the lowest present worth factor will be the lowest evaluated bidder.

In order to give benefit to a certain party, the evaluation of the tender is not being done in a fair and transparent manner and according to the tender conditions, sources alleged.

They claimed that the quoted CIF Price of TBEA has not been increased by adding the 20 percent customs duty, 16 percent sales tax and around 2.5 percent other import charges on machinery.

According to calculations, around USD 9,307,859.92 has not been added in the quoted bid price of TBEA and around USD 11,170,845.28 in the quoted bid price of Chint on account of various levies.

This gross blunder on the part of the officials concerned would ultimately result in cost escalation of the project and delay in its execution, sources said, adding that nearly $10 million worth of tax liability is being ignored, which is criminal negligence.

Moreover, the basis of comparison will be on the evaluated bid price. But the present calculations of the subject tender has been done on the corrected bid price instead of evaluated bid price without addition of financial impact of taxes.

After the evaluation on the present worth factor according to the tender conditions, CGGC emerged as the lowest successful bidder.

Sources said that NTDC has done wrongful calculation of loan period of the buyer credit. CGGC have proposed the loan for the subject project on 24-year basis but the evaluation has been done on the basis of 15 years to favour TBEA as it helps lower the bid amount of the favourite party.

There is no provision of this kind of evaluation in the tender, they claimed.

Sources also alleged that the foreign hardware manufacturers quoted by TBEA also did not fulfill the qualification criteria of manufacturers. Their hardware is untested and untried with reference to NTDC’s specifications and requirements and may, therefore, pose multiple risks to the transmission line networks.

It is alleged that the favourite bidder of National Transmission and Dispatch Company quoted wrong information in the bidding process about manufacturing capabilities.

Meanwhile, local industry would get huge benefit if the NTDC management award tender as per the rules.

According to an estimate, the local industry would get a benefit of millions of dollar if their manufactured equipment is purchased for this project, generating enormous and the much-needed stimulus for the economy, sources said.

Several letters by the local industry, as well as the bidders who smelled the NTDC’s intentions were sent to the NTDC managing director, Water and Power Development Authority (Wapda) chairman

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