Court allows gov’t to proceed with $4.6B GPL network rehab contract

The government can now proceed with the $4.6 billion contract awarded to a Chinese contractor for the rehabilitation of low and medium voltage distribution network for the Guyana Power and Light Inc (GPL) after acting Chief Justice Yonette Cummings-Edwards last Friday discharged an order she had previously made for them to defend the selection.

The order had been granted based on an application by a rejected bidder, Fix-It Depot, which had argued that the contract was awarded to China National Machinery Import and Export/China Sinogy Electric Engineering Co Ltd “in flagrant breach” of the Procurement Act and the bid invitation as it did not meet the tender evaluation criteria.

In arriving at its decision, the court considered the government’s argument that the contract was one aimed at benefiting citizens through the renewal and upgrade of the electricity distribution network, which would include upgrading transformers and meters, which are causing blackouts, line losses, inconvenience and hardship to citizens.

The respondents, listed collectively as the Ministry of Public Infrastructure, Senior Minister David Patterson, Permanent Secretary Balraj Balram, GPL, and the National Procurement and Tender Administration Board (NPTAB) and their representatives, had noted that the government was ready to release the funds to the Chinese group, but for the court proceedings.

The state had contended that the applicant stood to gain nothing from asking the court to quash the award of the contract to the Chinese conglomerate, as this would only result in the contract having to be retendered.

This process, the respondents advanced, would last a minimum of six months, and could have resulted in the country losing access to the InterAmerican Development Bank (IDB) funded multimillion-dollar loan and grant.

The respondents had also defended the award of the $4.6 billion contract, citing, among other things, that Fix-It Depot, failed to meet the requirements of the bid.

In an affidavit in answer, they argued also that the applicants were aware that the contract was not governed by the Procurement Act, but rather, by procurement policies of the IDB. This, they said, was communicated to the applicant by way of a correspondence, dated January 18, 2017. According to the government, the alleged breaches of the Procurement Act, raised by the applicant, “are nonexistent.”

In a Notice of Motion filed by his attorney Devindra Kissoon, Paul James, of Fix-It Depot, was contending that his company’s bid, which was the lowest, was unfairly rejected and that GPL set out vague criteria for the award of the contract and even then did not apply it.

James also cited reports to the ministry that criticised the past performance of the Chinese contractor and he charged that it was clear that it did not satisfy the evaluation criteria set out in the bid invitation, “it not having the experience to satisfy the bid requirements.” As a result, he argued that the decision to award the contract was “irrational, unlawful and a manifest error.”

In response, however, the government had said that the contract was awarded to the applicant who would have met all requirements “and not just the applicant with the lowest bid who may have failed to meet all the identified qualifications.”

The engineer’s estimate for the project was $3.8 billion, while Fix-It-Depot’s bid was $3.5 billion. According to James, based on the criteria in the Procurement Act and in the IDB Procurement Policy, not only did his firm, in a joint venture with Colombian civil engineer Enrique Lourido Caicedo, submit the lowest evaluated tender but it had also submitted the lowest evaluated cost.

“The decision to award the contract to [the Chinese group] in no way benefits the public since the tendered sum is $1,093,737,993 higher than the Applicant’s tender, that amount resulting in a waste of taxpayers’ funds, being approximately 25% higher than the Engineer’s estimate…,” James had said.

Among other things, the respondents had countered the applicant’s contention of the contract being “improperly” done, unfair, and in breach of natural justice, by advancing that there has in fact been no such breaches, as the applicant has no right to be heard prior to the awarding of the contract.

In its affidavit in answer, the state was contending that the applicant had failed to establish that the respondents have “made a decision in relation to the award of the contract” and that there was therefore nothing before the court “in relation to those Respondents to be quashed.”

James himself had noted that up to January 18, 2017, no money had been advanced to the group and no contract was yet in force.

He had resultantly asked the court to prohibit the respondents from concluding, entering into, or bringing into force, any contract with the Chinese group, to order that they reissue the bid invitation with clear criteria or to reconsider his bid on the basis that the award to the Chinese group was unlawful.

For its part, the government had said that the monies were ready to be disbursed to the company awarded the contract, and that the court proceedings were causing a delay in the country’s ability to utilise international donor funding from the IDB and the European Union.

The government was adamant, that the applicant had failed to show, where, in the execution of its duties, it had acted unreasonably, in bad faith or made decisions that were procedurally wrong or bad in law.

It had maintained that there were no averments suggesting any impropriety on its part, as it had, at all times, acted pursuant to its powers provided for in the IDB procurement policies.

To James’ application to the court for the award made by the government to be set aside, and to be called upon to show cause why this should not be done, the respondents had asked the court to discharge those applications.

The rehabilitation of 328 km of GPL’s low and medium voltage network, including the procurement and installation of smart meters throughout the network, is part of the Power Utility Upgrade Programme, which is intended to enhance the company’s operational efficiency.