Sinohydro gets contract
Brushing aside the recommendations of a tender committee and opinion of a legal expert, the cabinet purchase committee yesterday approved awarding the Chinese company Sinohydro Corporation a $0.68 billion contract for the river training works of the Padma bridge project.
While submitting its bid on June 19, Sinohydro had concealed information that it was under temporary suspension by the World Bank for alleged wrongdoing.
When two co-bidders drew the attention of the government to the matter, the company claimed that its suspension would not affect the project.
Although the tender is not being funded by the World Bank, the tender rules stipulated that a bidder would become ineligible to bid for the project if it was facing temporary suspension by the bank.
Sinohydro had a powerful lobby in the tendering process. The Bangladesh Bridge Authority (BBA) and the road transport ministry sought legal opinion on whether Sinohydro's bid should be disqualified as per the bid document which stated that “a firm or an individual may be declared ineligible to be awarded a [World Bank] bank-financed contract upon completion of the bank's sanctions proceedings as per its sanctions procedures, including, inter alia: (i) temporary suspension in connection with ongoing sanction proceedings.”
The legal expert said, “It appears that temporary suspension does not equal 'sanction' under the bank's sanction procedures. Therefore, on the face of it, Sinohydro's declaration at both stages that 'we, including any of our subcontractors or suppliers for any part of the contract, have not been declared ineligible by the bank', appears not to be false.”
“However, for the sake of good order, it would be advisable to obtain a clarification from the World Bank as to whether or not Sinohydro had been declared ineligible by the bank,” it added.
The tender committee, while selecting Sinohydro's bid, reflected the same spirit. It said the BBA should obtain a clarification from the World Bank on the issue.
But the road transport ministry which sent its recommendations to the purchase committee only on Tuesday ignored the recommendations of the legal expert, saying that there was nothing against Sinohydro on the World Bank's website and the allegation raised by the two co-bidders were false.
Finance Minister AMA Muhith echoed the views of the road transport ministry. Asked if the government had cross-checked with the World Bank on this matter, he said, “No, it was not necessary. We've checked the World Bank website and its name was not on the blacklist.”
The Daily Star talked to him after the purchase committee meeting, but quite unusually, no briefing followed the meeting yesterday.
The river training works are the second most costly component of the government-financed $3 billion Padma bridge project. It deals with stopping erosion of the river, maintaining navigability and dredging over 11 km area near Jajira and three km area at Mawa.
FALTERING IN DHK-CTG HIGHWAY JOB
Sinohydro faced strong criticism for its pitiable performance in the Dhaka-Chittagong highway expansion job which it had won in 2010 by making a low price offer.
Soon after the beginning of the expansion works, the company totally stopped work on a 140km part of the highway and started demanding higher payment. Till date, the company has completed less than half of the project that was supposed to be completed by December last year. Its delaying tactics have now doubled the project cost from Tk 1,655 crore.
The firm blamed the delay in the project on bureaucratic bottlenecks.
“Their complaints were genuine because there were mosques and temples [that needed to be removed], but we didn't do anything on time,” said Muhith. The road transport ministry told the purchase committee that the ministry was at fault about stalling the project, he added.
An expert of the tender evaluation committee told this newspaper that their decision of picking Sinohydro was not influenced by the prime minister's comment at a cabinet meeting in early July. When the finance minister drew the PM's attention to press reports on Sinohydro's performance in the Dhaka-Chittagong highway project and its handling of the river training tender, Sheikh Hasina said Sinohydro should get the river training contract, according to cabinet meeting sources.
Sinohydro, Korean Hyundai and Belgian Jan De Nul submitted financial proposals on June 19.
The Chinese company quoted Tk 9,224 crore for the river training job. It later offered a 5.6 percent discount on its offer price, slashing the amount to Tk 8,778 crore.
Hyundai offered Tk 12,122 crore and Jan De Nul Tk 12,324 crore for the same job.
“There is a big price difference between Sinohydro and the other bidders due to qualitative difference in the proposals. Any failure in the river training works can have grave consequences,” said an official of an aggrieved bidder.
One of the aggrieved bidders in a letter to the BBA earlier this month said, “The tender terms specifically mention that if a bidder is under temporary suspension by the World Bank, it is to be disqualified.”
The tender, said the letter, was floated after the suspension of the World Bank loan for the Padma bridge project and no amendment was issued to rescind this criterion, which confirms the tender's intention about applying this criterion to tender evaluation. The consequences of the temporary suspension by the World Bank are an integral part of the tender criteria, it added.