Head of the Presidential Secretariat Dr Roger Luncheon yesterday said that the controversial recent award of the East Coast Demerara highway contract to China Railway makes the case for Cabinet to retain its power to offer or withhold no-objection to contracts.
He reiterated that government was looking to save taxpayers over $2 billion when it withheld its no-objection and recommendation was made for a re-evaluation of the US$57 million East Coast highway contract, subsequently given China Railway First Group.
“When Cabinet withholds its no objection and sends it back, we are not notionally withholding, there are reasons for us withholding; here these considerations we think should be addressed…. You don’t believe if the award was made for US$8 million more the average Guyanese would ask why?” Luncheon asked at a press conference yesterday.
On Tuesday, Stabroek News reported that government had sidelined a recommendation from the National Procurement and Tender Administration Board (NPTAB) that the contract be awarded to China Harbour Engineer-ing Co Ltd (CHEC), which is the contractor for the Timehri airport project, since its bid met all of the requirements even though it was US$2 million over the engineer’s estimate. Stabroek News was further told that a former senior government member intently lobbied the government for the award to go to China Railway and this is what eventually happened.
The next day government put a different spin on the issue and asserted that its intervention was made with the intention of saving the country $2.8 billion.
In a statement, government said that at all times it followed an “open and transparent process.” The statement said that since the East Coast Demerara (ECD) highway widening and improvement project was a candidate for financing by China Eximbank, government invited expressions of interest from interested Chinese companies in October, 2013. The government said eight companies tendered expressions of interest.
After what it said was a “rigorous pre-qualification process” undertaken by technical officials, six companies were pre-qualified. The statement said that on February 12, the six pre-qualified companies were invited to submit bids. Tenders closed on May 13 and at this point, four bids were received.
The statement said the bids were opened in the customary public manner and the tendered prices were reported extensively in the media. The statement noted that of the four bids received, China Railway First Group was the lowest at US$46,994 million.
The statement then said it would be recalled that China Railway had already “established a track record of road building in Guyana,” being currently engaged in building the road to the Amaila Falls Hydropower Project. Criticism of the road has been rife among stakeholders.
The statement said “A technical evaluation panel evaluated the bids received and recommended that the tender be awarded, not to the lowest or even to the second lowest bidder, but to the third lowest (or second highest) bidder, China Harbour Engineering Co Ltd, [which] tendered US$60.418 million…
“The justification given by the evaluation panel for not awarding the contract to the lowest bidder was that the panel had reservations about the bidder’s ability to complete the works at the tendered price.”
Stabroek News had been told that during the evaluation of the bids, three of the companies were found to have submitted incomplete bids and there were also errors in these. Initially, sources said, the NPTAB’s evaluation committee was of the view that the bid should be retendered. However, because of a number of factors, the NPTAB made a recommendation of CHEC to the Ministry of Public Works. It was also the view of the panel that the CHEC figure could be negotiated downwards.
However, sources told Stabroek News that it was at this juncture that the former senior government official intervened and the contract was steered in the direction of China Railway.
Asked if what he explained about cabinet sending the tender back with recommendations was not interfering with the work of the NPTAB, Luncheon pointed out it was within the ambit of giving a no objection. “Cabinet has, should always have, the right to offer its no objection to awards.
“The specifics of this case… Cabinet understood clearly that they were all deemed technically fit because they were cleared by the evaluation committee to discharge this contract,” he said.
Insiders have told Stabroek News that the government’s intervention in the award of the huge US$57 million contract was meant to retain China Railway’s interest in the stalled Amaila Falls Hydropower Project.
Luncheon dismissed these claims. “They have road projects that are unfinished… if the argument was sound you can say …if you want to keep them you have to ensure that this new project begins just when that one is completed,” he said.
He pointed out that China Railway has experience in the building of roads in Guyana and its bid could have been far below the estimate as it already has the necessary resources to execute the project in Guyana, as compared to other bidders. Luncheon said that only recently was the contract for the building of a portion of the Amaila Falls access road awarded to China Railway.
