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July 22, 2018
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Mangla hydropower station rehabilitation project: Transparency International smells ‘corruption’ in contract bidding process

Business

July 22, 2018

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LAHORE: Transparency International Pakistan has leveled corruption charges on the state-owned Water and Power Development Authority (Wapda) for a contract bidding process related to rehabilitation of 980 megawatts Mangla hydroelectric power station, The News learnt on Saturday.

Transparency International Pakistan (TIP), in a letter to Wapda Chairman in May, said a bidder given green signal by the authority in its evaluation is not supplying current limiter and medium voltage switchgear from the qualified manufacturers, and thus “the bid shall be declared non-responsive”.

Justice (retired) Zia Perwez, a trustee of TIP and former judge of Supreme Court and Sindh High Court, observed that if the bid of any bidder is not complying with the specifications the bid could not be made responsive by allowing the bidder to change the supplier.

Sources said Wapda management is tight- lipped on the issue and has yet to respond to TIP’s letter. No other corrective measure has been taken by Wapda in response to charges leveled against the authority, they added.

The bidding process is part of rehabilitation of Mangla hydroelectric power station, with the financing of $237 million to be contributed by Agence Francaise Development, the United States Agency for International Development (USAID) and Wapda.

Sources said Wapda is currently in the process of awarding the contract for Mangla rehabilitation package 6 and 8 to a Chinese company that has offered non-qualified equipment including current limiter and medium voltage switchgear by illegally giving a chance to replace it with qualified ones.

The sources said such components are key parts and have to be offered from the qualified manufactures that must have to meet the technical and commercial requirements of the tender.

The sources said a bidder termed lowest and qualified bidder by

Wapda quoted the current limiter from a Chinese’s manufacturer that could not meet the tender specifications.

There is no manufacturer in China that manufactures the current limiter according to the required tender specifications, the sources added.

Another bidder quoted the current limiter manufactured by the qualified manufacturer that could meet the tender specifications but Wapda did not accept the bid in its assessment.

Medium voltage switchgear, which is one of the most critical components of the project and also called the heart of any power plant, must also be from a qualified manufacturer.

The second lowest bidder quoted the component that meets the required tender

requirements and which can

be fitted in Mangla power station in the same allocated spaces.

The gear is manufactured by ABB and only offered by MHDC China, the second lowest bidder, said the sources.

The bidder, termed successful by Wapda in its evaluation, expressed its intent to supply the required switchgear that is single level.

This entails that the offered medium voltage switchgears are with only one circuit breaker and not two in the same panel as required and hence could not be fitted in the same allocated space in Mangla power station and thus not acceptable according to the tender conditions.

Sources said such changes in the bidding process are against the Wapda’s earlier stance.

Last year, General Manager Hydro Development of Wapda issued a post bid clarification before tender opening, specifically for medium voltage switchgear type, stating that it is not acceptable because it is single level and thus will not fit in the allocated space of Mangla power station.

The sources said the current limiter and medium voltage switchgears quoted by the bidder could not meet the tender conditions, but even then the

bidder is being accommodated for the award of contract by changing equipment.

A tender clause (23.3 (i) (ii)) said the bid of Chinese bidder termed qualified by Wapda contains material deviations as the offered components do not meet the technical requirements of the tender, and is a major deviation, which cannot

be corrected by changing the manufacturers to the qualified ones and should be rejected, the sources said.

Originally, the Mangla hydroelectric power station had a power generation

capacity of 1,000 megawatts from 10 generating units.

The plant’s capacity was reduced to 980MW as a

result of degraded equipment.

The Mangla dam rehabilitation project will add 90MW to the plant’s generation capacity after refurbishing and upgrading of units 5 and 6 of the plant, along with related plant facility enhancements.

Consequently, Mangla’s revenue from electricity sales is expected to increase to approximately $60 million per year.

New, modern equipment will ensure the availability of spare parts for preventive maintenance, and will improve the reliability and availability of the power plant for the next 25-30 years.

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