IESCO knocks out Swiss firm from $180m metering infrastructure project

Power utility denies extending time for bidder to submit documents in line with rules

ISLAMABAD: The management of Islamabad Electric Supply Company (IESCO) has technically knocked out the Swiss firm in awarding $180 million Advanced Metering Infrastructure project to a favourite firm which may land PTI government into controversy.

According to documents available with The Express Tribune, IESCO reportedly involved in the dubious bidding process of awarding a multimillion-dollar metering infrastructure project.

Two firms, a Chinese and Swiss multinational had qualified for technical bid. However, IESCO amended the bidding process after several months and denied the Swiss firm extending the time to submit documents in line with PPRA.

As per in PPRA Rule 36 of procedures of open competitive bidding of sub-clause C -two-stage bidding procedure the procuring agency may revise, delete, modify or add any aspect of the technical requirements or evaluation criteria, or it may add new requirements or criteria not inconsistent with these rules.

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However, PPRA says that such allowance of time shall not be less than 15 days in the case of national competitive bidding and 30 days in the case of international competitive bidding. However, IESCO gave one week's time to Swiss firm in violation of this clause and technically knocked it out in technical evaluation giving advantage to another firm to qualify for financial bid.

Moreover, if PPRA rule 30 is read in conjunction with PPRA rule 36 (b) (vi), it does not allow post-bid interjection of modified evaluation criteria in single-stage bidding process, thereby making the whole process null and void, in flagrant contravention of the PPRA rules.

Officials familiar with the development said that it would indebt the nation with a loan by dumping substandard technology solutions and discouraging world-leading multinationals not to participate in future tenders, severely compromising productive utilization of the loan, a perennial issue in Pakistan plagued by poor decision making.

Insiders say that IESCO AMI Spanish consultant Mercados AF appointed by IESCO is also said to give favour to the bidders, KT Kaifa consortium that has a Spanish software partner Indra as well. In a letter on July 24 to AMI Swiss company, Landis+Gyr, IESCO asked for ACG (affiliate company guarantee) within one week against 30 minimum days allowed by PPRA. The Swiss company informed that ACG would require BOD approval from its parent company and allow reasonable time until September 6 to submit ACG. Landis+Gyr submitted ACG to IESCO after board approval on September 6, which was rejected by IESCO.

Consequently, IESCO declared it as disqualified due to non-submission of ACG by the deadline, despite PPRA allowed 30 days minimum time.

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It is also interesting that ACG was not part of initial tender document and initiated to part of tender just before the financial opening after six months of bid submission which shows that ill intension of IESCO and ADB consultant to keep major competition out from the bidding process by limiting the submission deadline in a very short timeframe without realizing such complex legal document need reasonable time for any company to get internal approval. As mentioned above PPRA rules 30/36 (b) (vi) do not allow modified criteria in single-stage bidding after submission of bids for the same.

IESCO had discouraged and kept the major competition out by not allowing the others bidders to use the qualifications of other firms such as the Bidder’s subsidiaries, parent entities, affiliates, subcontractors and later on (after 6month of bid submission) - just before the financial opening considered as part of bidding documents, which is technically and legally not allowable as per PPRA rules to considered as part of tender documents after bid submission.

IESCO and the ADB consultant had announced to open price bid of KT-Kaifa bid on Septtember 23, 2019 as single qualified bidder without taking consideration of serious violation of PPRA rules and decided to proceed further.

During pre-bid and bidders Q&As ADB and IESCO had declined to use the qualifications of other firms such as the bidder’s subsidiaries, parent entities, affiliates, subcontractors. However, IESCO took U-turn on July 24 and allowed to use the qualification through subsidiaries, parent entities, and affiliates as this was not allowed at the time of bid submission. Many companies did not participate the tender because IESCO’s ADB clarifications to all potential bidders had declined to use such provision and later on considered as part of bid document which is serious violation of PPRA rules and to encourage competition.

When contacted contacted project director he did not respond.

Published in The Express Tribune, September 19^th, 2019.