NEW FUEL ‘SCANDAL’
$7m Tender To PurchaSe fuel oil for TeKencİK PoWer STaTion iS cancelled
THE head of a company that bid for a $6.8 million tender to supply 200,000 tonnes of fuel oil to the Cyprus Turkish Electricity Authority (Kıb-Tek) for the Teknecik power station has described as “scandalous” a decision by government officials to cancel the procurement process.
On Thursday the Central Tender Commission (MİK) announced the cancellation of the tender, launched on August 11, following a 14-day “evaluation” period.
The tender had been launched after ministers repealed previous controversial decrees allowing fuel oil to be bought without a tender, which had led to accusations of fuel oil being purchased at inflated prices, with the extra costs being passed on to consumers in the form of higher electricity bills.
Sources closely following the issue said the MİK’s decision to cancel the tender, to which six companies had submitted bids, was due to its “inability to resist” political pressures.
MİK head Halis Üresin, making a statement to broadcaster BRT on the subject, said that the tender was cancelled due to the “public interest” and by “taking into account all the sensitivities and technical and administrative specifications of the public procurement law”.
‘BarGaininG-STYle’
He added that a fresh tender will be launched “within 10 working days” but that this time it will be a “bargaining-style” tender, rather than sealed bids, “in order to enable the participant companies to re-prepare and avoid grievances by making the competitive conditions better”.
Mr Üresin said that the most important aspect of this method is that each company will be able to see the other companies’ initial bids and then submit second bids, and that all proceedings will be “broadcast live”.
“Therefore, Kıb-Tek and our state will benefit financially,” Mr Üresin said.
Ulus Göker, the director of Sidereal Lines Ltd, one of seven firms that offered to supply the fuel oil and which the Kıb-Tek management initially tried to block from applying, said: “This scene has been played out for more than a year. Our people are paying millions of dollars for the cost of going directly to suppliers because the tender could not be concluded in accordance with the rules.
“The cancellation is actually scandalous. Let Mr Üresin put his hand on his heart and explain what happened before and after August 11. . . Everyone knows that the MİK was pressured at every stage of this process.
“I participated in this tender with the belief that it would be a fair tender . . . If the TRNC is a state of law, I call on all institutions that have a supervisory role to do their duty.
“The people should get prepared to pay millions of dollars on this path through Kıb-Tek.”
Mr Göker recalled that ministers had promised earlier in the year that “cheaper fuel oil” would be acquired by using direct purchases rather than issuing tenders, but that “the exact opposite” had happened.
He said that he had participated in the now cancelled tender in “good faith” but that “we were deceived”.
“However, we have no intention of giving up,” he added.
Before the tender, which had an estimated cost of $6.8 million, was cancelled Mr Üresin announced that the bids received ranged in price from $32.80 per tonne to $99 per tonne. The bid from Sidereal Lines was priced at $58.28 per tonne.
At the time Mr Üresin said that one of the seven bids was deemed invalid, while the two cheapest offers were “25 per cent below the market price” of $61.25, leaving Mr Üresin to “question their motives”.
On Kıb-Tek’s previous request to have Sidereal Lines barred from the tender due to an ongoing court case between the two, Mr Üresin said that he could not accept such a request because there has been no final ruling in the case.
Main opposition Republican Turkish Party MP Salahi Şahiner said the cancellation of the fuel oil tender would cause public finance “losses” and that the cancellation was made due to “political pressure”.
He claimed that the MİK has “no authority” to hold a “bargainingstyle” procurement process and that there is “no legal ground” for such a move.
Meanwhile it was announced yesterday that the Council of Ministers has authorised Kıb-Tek to borrow 25 million TL from Near East Bank, repayable over 24 monthly instalments.
Ministers have also given the go-ahead for Kıb-Tek to borrow $3 million from Creditwest Bank, $3 million from Capitalbank, and $1 million from Asbank, all with a one-month term and “under the guarantee” of the state.
According to the decision, published in the Official Gazette, the money will be used by Kıb-Tek to purchase fuel oil.