Sinohydro, blacklisted by the World Bank, is being awarded Rs15b hydropower project. PHOTO: FILE
The Water and Power Development Authority (Wapda) is in the process of awarding a Rs15 billion hydropower project to a debarred company Sinohydro Corporation, sources and documents available with The Express Tribune reveal.
The project is being constructed by Wapda on a tributary of the Indus River in the Kohistan district of Khyber Pakhtunkhwa.
With an estimated cost of 240 million euros, the project is being jointly funded by the European Investment Bank, the German Development Bank (KfW) and the Government of Pakistan. The European Investment Bank and the KfW are providing 100 million euros and 97 million euros, respectively, for the project’s construction.
Wapda officials claimed that the project is scheduled to be completed in four years and will provide 426 million units of low-cost hydel electricity per annum to the national grid.
According to documents available with The Express Tribune, Sinohydro Corporation Limited was temporally debarred by the World Bank in December 2013. Any firm debarred by the World Bank is also blacklisted by the Public Procurement Regulatory Authority (PPRA) and it can neither participate in any bidding process nor execute any project.
As per the minutes of a Wapda meeting, a copy of which is available with The Express Tribune, the initial bid received by Wapda from Sinohydro (Rs15, 654 million) was also 24.9% higher than the engineer’s estimate.
Wapda is of the view that it awarded the contract to Sinohydro Group, while WB debarred Sinohydro Corporation, which is a different entity.
According to a Central Contract Cell official, since the Sinohydro Corporation was facing investigation and impending suspension for alleged wrongdoings in an African contract, it applied under a new name, Sinohydro Group. Sinohydro Corporation was debarred by the WB initially in December 2013 on temporary basis and later on permanent basis.
Published in The Express Tribune, May 12th, 2014.
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Obviously, there would be special advantages in awarding the contract to a debarred company: such a company will be willing to cough up a much higher amount in commission.
In this case, the commission could be 24.9 percent of the project cost, the percentage by which the initial bid value exceeded the engineer's estimate of the total cost, plus 'normal' commission.
I suppose it would be pointless being in authority if a contract of this size did not provide enough kickback to buy a prestigious property overseas in addition to increasing the foreign bank balance by a big margin.
This is a general observation based on facts and figures as given in the news report.
Karachi