Wapda Chairman Shakeel Durrani had written a letter through his Personal Staff Officer Brigadier Mukhtar Ahmad (Retd) to the Minister for Water and Power, a copy of which had also been dispatched to the Prime Minister, asking for an inquiry to ascertain how the contract was awarded to an influential party without following the laid down criteria.
The sources said that a one-man committee has investigated the allegations against Pepco MD levelled by the Wapda chief but failed to find any discrepancy into the matter, however, insiders in the ministry speak openly against the report saying the allegation were correct.
Giving the background, the sources said that Wapda had been directed by the prime minister in 2006 to explore the possibility of acquiring more rental power projects and on July 7, 2007 bids were received for 100 MW Rental Power Facility to be erected at the existing premises of Guddu thermal power station. The bids were received and opened on August 20, 2007 in the presence of representatives of the participating bidders/firms.
FOLLOWING FIRMS SUBMITTED THEIR BID PROPOSALS: M/s Progas Pakistan Limited, Karachi (PPL), M/s Pakistan Power Resources, Lahore (PPR); and M/s Orient Engineering & Services Consultants, Karachi. The sources said, M/s Orient Engineering failed to submit bid security along with their proposal that''s why their bid was declared non-responsive.
The evaluation of other two bids was carried out by the office of General Manager (Thermal), Wapda. During evaluation, it was observed that certain information/data were either missing or not clearly mentioned.
The evaluation committee also noted that the plant offered by M/s PPL was the same as was being installed at Bhikki Grid Station by M/s PPR and presumed that heat rate should have been the same. Both the firms/bidders were invited to clarify and supply the data/information required for evaluation of the bids.
Discussions were held by Wapda with both the bidders ie M/s PPL and M/s PPR on the same day ie 8.9.2007 for clarification regarding tariff, heat rate, terms of payment, completion period and penalties for less generation below 92 percent availability.
According to the inquiry committee it was confirmed by M/s PPL that heat rate of the offered rental power plant at Guddu is the same as that of Bhikki rental power plant.
They also informed that they would consider matching the rates/tariff of the offered plant with that of Bhikki plant. On September 19, 2007, M/s PPL confirmed that they shall match the rent/tariff and all other terms and conditions as mentioned in the rental agreement for the Bhikki project. Consequently, the tariff and the amount of monthly rent was reduced.
The sources said that discussions were also held with M/s PPR on September 8, 2007 and clarifications were sought regarding tariff, terms of payment, completion period and penalties for less generation below 92 percent availability. On this, M/s PPR not only submitted the data but also changed the technology and capacity specification of the plant and kept the heat rate and tariff the same because of which amount of monthly rent was increased.
Consequently, the case was considered by Wapda authorities which in its meeting held on September 27, 2007, unanimously decided to award the contract for 100 MW power plant at Guddu on rental basis to M/s PPL subject to ratification of tariff by Nepra.
The sources said that just one day after the authority''s approval, a note was received from Pepco in which certain observations were made. In response to these observations, a committee was constituted to carry out a comprehensive re-evaluation/review of bids submitted by M/s PPR and M/s Progas Pakistan Limited.
THE COMMITTEE, AFTER THOROUGH RE-EVALUATION/REVIEW OF ORIGINAL BIDS CONCLUDED THAT:
a. The offer of M/s PPL was the lowest at the time of opening of bids on August 20, 2007.
b. The offer of M/s PPL after clarification/discussion and thereafter evaluation was still lowest as compared with the offer of M/s PPR, both in terms of tariff as well as heat rate.
The tariff offered by M/s PPR was same at the time of opening of bids as well as after discussion and clarification sought by General Manger (Thermal).
c. The evaluation of the bids has been found to be satisfactory.
d. The committee based upon its conclusion recommended that since certain doubts have been created regarding transparency, therefore, the committee recommends that to eliminate doubts from the minds of every one, both the bidders be re-invited to submit their final and the best offer complete in all respect in a sealed envelope which shall be opened publicly on a fixed date and time, preferably after one week.
The report of the committee was considered by Wapda authorities in its meeting held on October 9, 2007. Taking into account the factual position, Wapda did not agree to the recommendations of the committee to re-invite bids from both the bidders.
The authority decided to uphold its earlier decision of September 27, 2007 in the matter ie to award the contract to M/s Progas Limited (PPL). Member (Power), Wapda, instead, referred the case to the Prime Minister''s Secretariat for involvement of PPRA and kept the case pending, the sources continued. The sources said that upon Pepco''s re-functioning the case was forwarded to Pepco for further action.
Pepco re-tendered the project on November 8, 2007 and furnished following details regarding the processing of the second tender: The bid was opened on December 10, 2007 by a especially constituted tender opening committee in the presence of the representatives of Progas Pakistan (Pvt) Limited, Karachi, Pak Oman Investment Company, Karachi and Pakistan Power Resources (PPR), Lahore.
The sources said that bidders were required to submit only one proposal, but M/s Progas Pakistan (Pvt) Limited submitted two proposals. The other bidders submitted one bid as per the requirement of the tender documents. Progas Pakistan''s decision to submit two bids instead of one bid, contrary to the tender requirement, was mala fide with ill intention to sabotage the process, if they failed to win the project.
However, to take the process forward, the evaluation committee comprising six members decided not to disqualify M/s Progas and processed the bid for further evaluation. Pak Oman International Ltd failed to offer the required switchgear for the rental plant. Hence, the bidder - Pak Oman failed to qualify for final evaluation.
The offer of PPR with a net site capacity of 110 MW, guaranteed heat rate and availability of 9600 BTU/kWh and 92 percent respectively and rental tariff of 2.717 cents/kWh for three years rental period is a better offer than options I and II of Programs Pakistan Limited.
The offer of PPR was, therefore, recommended for further consideration by the scrutiny committee. The scrutiny committee comprising Member (Power), Wapda and other senior Pepco officials further reviewed the evaluation in detail and recommended to Pepco MD for approval for award of the contract of M/s PPR being the lowest bidder.
Pepco chairman who is also Secretary Water and Power discussed the evaluation in detail in a meeting on February 3, 2008 with the scrutiny committee and finally approved the recommendation of the evaluation/scrutiny committee for award of contract to M/s PPR. Wapda''s top official still believes that awarding of contract to PPR was unfair and requires thorough investigations, the sources concluded.