Alleged fraud taints Gabral-Kalam Hydropower Project award

PESHAWAR: The Khyber Pakhtunkhwa (KP) government has sought a report from the Pakhtunkhwa Energy Development Organisation (PEDO) about the alleged manipulation and fraud in the bidding process for the Rs40 billion Gabral Kalam 88MW hydropower project.

A letter from the KP Energy Department has ordered a thorough investigation into the allegations surrounding the bidding process. The letter emphasises that the inquiry should follow established procedures, meticulously verify documents, and maintain transparency. It underscores the importance of conducting the investigation diligently, impartially and within the specified timeframe.

Official data indicates that the Pakhtunkhwa Energy Development Organisation had solicited bids for the Gabral Kalam 88MW hydropower project. The project is set to be awarded to the M/s Gabral Kalam Hydro-Power (GKHP) Consortium, a partnership between Guangdong Yuantian Engineering Co. Ltd. of China and RMS (PVT) Limited of Pakistan. However, the KP government has received multiple complaints about the bidding process.

The complaint sent by the provincial government questioned the consortium’s eligibility, experience and unusually low bid. There are also allegations that the consortium had submitted a fake bank guarantee for a project in Sindh.

The complainant said that the consortium had submitted a remarkably low bid despite rising prices of materials essential for hydropower projects. Concerns were raised about the consortium’s failure to meet the specified eligibility criteria, particularly regarding construction experience. The reported cost for civil works on a similar project was $64 million, significantly lower than the required $120 million. Suspicions of foul play emerged when the figure was altered from $64 million to $124 million during translation from Chinese to English.

The complaint asserts that the project highlighted by the consortium as relevant experience does not align with the criteria for a hydropower project. Additionally, both companies in the consortium have been involved in fraudulent activities in Pakistan and internationally.

The Public Accounts Committee had found RMS guilty of providing a fake guarantee and the Sindh High Court ruled their actions fraudulent.

However, a spokesman for the RMS (PVT) Limited has rejected the allegations, saying that the opponent’s bid was exorbitantly high and that the bidder wanted to play dirty games to secure the project. He dismissed the complaints as baseless and aimed at casting doubt on the bidding process. He defended the consortium’s bid of Rs39 billion as responsible and economical, contrasting it with the opponent’s bid of Rs65 billion, which he deemed excessive. The spokesperson raised concerns about the opponent’s intentions and the credibility of their complaints, suggesting a motive to gain undue benefits.

“This stark difference of Rs26 billion raises serious questions about the opponent bidder’s greedy intentions and the credibility of their complaints, which we believe are driven by a desire to obtain undue benefits from the public exchequer,” he said.

He rejected the fake guarantee allegation, citing the Sindh High Court constitutional petition no. D-4529 of 2023, order dated October 6, 2023 (paras. 7 and 27), which declared that there had been no default by the petitioner to date and the inquiry was quashed in the matter of allegedly forged bank guarantee.

He affirmed that the consortium partners meet technical and financial requirements, with all necessary documentation diligently submitted and certified by relevant authorities.

“All necessary documentation, including original documents and their notarised Chinese and English translations, has been diligently submitted,” he said.

The spokesperson denied claims of document alteration during translation, saying that the documents had undergone thorough scrutiny, certified by the Department of Consular Affairs of the Ministry of Foreign Affairs, Beijing, and the China Council for the Promotion of International Trade (CCPIT).