Source: ZPC tenders not reversible: Mbiriri | The Herald May 13, 2016
Golden Sibanda : Senior Business Reporter
GOVERNMENT is proceeding with tenders for Zimbabwe Power Company’s power projects, as awarded by Statement Procurement Board to avoid delays in resolving the national power crisis and the legal consequences of cancelling them. Secretary for Energy and Power Development Partson Mbiriri said in an interview with The Herald Business, that Government risked being overtaken by economic developments if it made the decision to cancel the tenders.This affirms an earlier statement by his ministry that the projects were beyond reproach, as they were duly awarded in accordance with tender procedures.
The remarks relate to the fact that Zimbabwe faces a serious power deficit, with generation capacity at 1 050 megawatts against demand for power, which at peak periods is about 2 200MW.
He also said that there were serious potential legal consequences associated with irrational or unjustifiable cancellation of the tenders for the power projects.
The SPB has awarded several multi-million dollar tenders for ZPC projects meant to resolve a debilitating power crisis in Zimbabwe. The tenders include Munyati solar (ZTE Corporation), Insukamini in Bulawayo (17 Metallurgical China), Gwanda (Intratrek Zimbabwe), Mutare peaking power (Helcraw) and Dema diesel power plant (Sakunda Energy).
The SPB also awarded tenders for 300MW Kariba South extension, 600MW Hwange 7 and 8 extension(Sino Hydro), 30MW Gairezi hydro (Intratrek, BHL India, Angelique) and repowering of Bulawayo (17 Metallurgical), Munyati (Intratrek, Jaguar Overseas Limited) and Harare stations (Jaguar), which should make Zimbabwe self sufficient by 2019.
The awarding of the contracts to all qualifying bidders, by the single highest authority on tender processes, SPB, was based on compliance with all specifications, technical and financial, which also required the winner to quote the lowest price.
It was also not about the record of directors or capacity of the local partner, as no local firm could execute such projects on their own, but about the demonstrable financial as well as technical capabilities of the foreign partner.
Mr Mbiriri pointed out that there are clearly laid down provisions for those with “locus standi” in the tenders to seek recourse, within the stipulated 21 days after awarding of the tenders, in terms of contesting the awarding of any tender.
After that period has lapsed, the SPB Act does not provide for retrospective review of the tender details or process and in the case of the ZPC projects, there was no objection after a multi-stage adjudication, review and award process.
He said the whimpering over the capacity and alleged irregularities in the manner in which the projects were awarded is typical of any multimillion dollar tender, where people will always “unearth all sorts of skeletons in the cupboards”.
“Tenders are always like that, controversy about, this controversy about. Those that have lost go into all sorts of cupboards and unearth all sorts of things, raise all sorts of issues because these are big tenders and people take each other to court. We have had one or two instances which have gone all the way to the Supreme Court and a decision was made and we cannot reverse a judicial decision,” he said.
In one of the instances where participants in the tenders have raised grievances, local firm Hel-craw Electrical won its case before the Supreme Court to set up a 120 megawatts Mutare peaking plant, which Pito Investments had challenged citing SPB irregularities in awarding the tender.
There has recently been clandestine push by some Zesa and ZPC board members to have the tenders reviewed or cancelled over alleged irregularities despite declaration by Energy and Power Development Minister Samuel Undenge that the tenders were above board.
“The discussions you are referring to are suggesting that we start the process afresh; if we were to start afresh and we are overtaken by economic developments, everyone will turn around and say ‘you are the ones who delayed these (power) projects because you started the process afresh, and so on.
“We are proceeding with those projects as awarded, the law provides for appeal if a decision has been made by the State Procurement Board and those that have ‘locus standi’ in the matter are aggrieved the law provides for them to appeal to the Administrative Court and if not satisfied with the decision by the Administrative Court they can go to the Supreme Court and we have never interfered with that process, but to expect us to work outside that legal process is in my view unfortunate.
“If we were to do so, the chances are that we would be blamed for not following the rule of law,” the secretary for energy and power development said.
Mr Mbiriri’s remarks, in this instance, referred to reservations over tenders awarded to local firm, Intratrek Zimbabwe, which has partnered globally reputable energy firms from India and China for its Gwanda, Gairezi and Munyati projects, as awarded by the State Procurement Board.
For Gwanda, the firm is working with Shanghai Stock Exchange-listed CHiNT Electric Co., a $30 billion balance sheet firm among the four largest non-state owned firms in China.
According to the respected US published Photon Photovoltaic Energy Magazine, CHiNT is a vertically integrated one-stop-shop manufacturers, producing all necessary components and ancillary products for turnkey photovoltaic projects and they are listed at number 2 on Photon Consulting’s 2015 Solar Manufacturer Sustainability Ranking.
On Gairezi, Intratrek partnered Bharat Heavy Electrical, a $4 billion balance sheet company owned by Government of India, which recently commissioned a 30MW hydro project at Nyaborongo Dam, which was officiated by President Paul Kagame.
Engineering procurement and construction contractor, Angelique recently completed the ZIMFUND Emergency Power Infrastructure Rehabilitation Project and was awarded a certificate of excellence by ZESA Holdings unit, ZETDC after completing the project timorously and to specification.
ZPC’S solar tenders were floated in January and closed in September 2013, after being postponed on a few occasions for various reasons, including overwhelming response from over 40 bidders.
After a protracted adjudication process for the three solar projects, which have recently courted controversy, especially those awarded to Intratrek, the SPB resolved to make three awards in recognition of Zimbabwe’s power crisis.
Earlier, the tenders experienced blips and were cancelled with six of the qualifying bidders asked to resubmit bids following administrative bungling on prices by the procurer, ZPC. The six firms allowed to resubmit their bids were Intratrek, 17 Metallurgical, ZTE, Lanlake, China Jiangxi and Afriven
The tenders for the six bidders were cancelled for a second time following inconsistencies in the composition of the request for proposal, where some of the bidders had included prices in the technical submissions contrary to requirement. Eventually, the tenders were awarded to China’s ZTE Corporation, 17 Metallurgical and Intratrek Zimbabwe.
But in all cases the ZPC projects were awarded to the technically compliant lowest bidders and in all instances, after a juxtaposition process to compare various scenarios of awards.
Mr Mbiriri said tenders are independently awarded by SPB in terms of the Procurement Act and in line with section 32(1)(m) of the legislation that tenders be awarded to compliant bidders who are technically compliant offer lowest price.
Munyati rehabilitation project, in which Intratrek is Jaguar Overseas local partner, awaits signature after receiving the green light from SPB following initial objections procurer, dismissed as ‘irrational and illegal as the accounting officer had already adjudged that the funding bid for Munyati was sound and unrelated to other projects Jaguar was involved in.
Procurement experts say under international best practice, major public EPC tenders be adjudicated by competent and impartial technical committees that go through multiple stages where bids are scored. Those that fail to attain a certain technical threshold are eliminated before being examined.
Consequently, the adjudication process focuses on the competence and capacity of the technical partner and the potential synergy resulting from the less significant local partner.