Documents reveal Sinotec submitted false claims regarding project expertise. PHOTO: FILE
The Pakhtunkhwa Hydel Development Organization (PHYDO) is all set to award the engineering, procurement and construction (EPC) contract of two of its biggest hydropower projects to a company whose credentials and profile are inaccurate.
Documents available with The Express Tribune reveal that after advertising for the 84 megawatts (MW) Gorkin-Matiltan Hydropower Project in Swat, PHYDO received four bids: Sinotec consortium bid Rs16.2 billion, HRL consortium Rs17.8 billion, MCC-Ruba consortium Rs18.5 billion and Limak-ZKB consortium Rs21.3 billion.
Three bids have also been received for the 69MW Lawi Hydropower Project in Chitral. The Sinotec consortium bid Rs17.86 billion, CLIC consortium Rs21.94 billion and Limak-ZKB consortium Rs21.05 billion.
As per the eligibility clause of the instruction to bidders (IB.13) which pertains to establishing the bidder’s eligibility and qualifications, the contractor must have completed at least two EPC contracts as a contractor, sub-contractor or management contractor during the last ten years prior to submitting the application.
Documents further revealed that PHYDO had qualified Sinotec for both the projects, although they had no experience of undertaking such massive projects. Being the lead contractor chosen for the two hydropower projects, Sinotec should have completed at least two EPC contracts as a contractor. Listing their experience in the application form of the project, the company claimed to have carried out the Muzaffargarh-Gatti 500 kilovolts transmission line as a management contractor and the Taunsa Barrage emergency rehabilitation and modernization project.
Sinotec claimed in the application that it was the management, design and construction contractor of the project, whereas the fact remains that the project was completed by China National Electric Wire and Cable Import Export Corporation (CCC) and Central China Power Group International and Trade Company Limited (CCPG), a Chinese consortium for which consulting company Barqaab was the engineer/consultant.
Sinotec had also claimed to be the management contractor of the Taunsa Barrage project but this too, according to documents, was carried out by CCC and there was no provision of a management contractor or consultant in the contract.
Furthermore, the partners of Sinotec in the consortium, Chongqing Water Turbine Works Company Limited, also lack EPC experience as the company is just an electromechanical manufacturer. Moreover, the consortium’s local partner Ghulam Rasool and Company does not have the requisite experience for the hydropower projects, yet Sinotec claims they have the necessary expertise to carry out the project.
However, Sinotec’s biggest fraud are the balance sheets it has submitted for the Matiltan and Lawi projects as they vastly differ from bids submitted for the Jinnah Barrage project wherein they had claimed an annual turnover of $35 million in 2011 and for the New Khanki Barrage project wherein they showed a turnover of $55 million. The bids for the Matiltan and Law projects claim the company’s turnover to be $100 million, reveal the documents.
As per a clause of the bidding contract, the bidder should have an average annual turnover of more than $100 million in the last five years. Additionally, the consortium’s leading partner must meet this requirement in full while other partners in the joint venture must meet 25% or above, the documents state.
Project Director of the Matiltan project, Qazi Inayat told The Express Tribune PHYDO has received related complaints and the matter is already under consideration. When the project consultant at Barqaab was contacted, he too confirmed that PHYDO has asked them to look into the alleged fake documents submitted by Sinotec.
The officials of PHYDO further stated that the Lawi project has also been under investigation after serious allegations surfaced against Sinotec.
Barqaab Chief Engineer Khalid Latif Shaikh, who evaluated the bid documents provided by Sinotec to PHYDO, said after completing the evaluation process, Barqaab has returned the 22,000-page dossier along with observations to PHYDO. He added if allegations regarding fake documents are proved to be correct, then the authorities would have a right to blacklist Sinotec and the consultancy firm that provided a fake guarantee certificate to Sinotec.
Published in The Express Tribune, April 9th, 2014.
COMMENTS (3)
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@MAD: Maybe they have gone mad.
I dont know what to say. but y they r doing corruption in KPK for awarding tender??? If there is corruption plz send the case in Nab or other companies should challenge the decision of tender awarding or take the case to ombudsman
OK first the articles states that contract is being awarded and then same article states that irregularities are under investigation and company may be blacklisted.