GPL/IDB US$18M contract: no official word from Government

Dear Editor,
I’m writing in response to a Kaieteur news article “USM smart meters, new transmission lines project… Cabinet approves troubled Chinese contractor for .1B over engineer’s estimate”, dated December 7, 2016. Editor, this project has been on the radar for a few years now, since funding was approved in early 2014. It has been 10 months since the close of the tender, with no official announcement of a winner. In this article, Kaieteur News, from whatever source, announced China Machinery Import and Export [CMC] as the winner, since cabinet gave its no objection. It was also mentioned that the contractor, CMC, came in over the engineering estimates, who was the third highest bidder behind Fix It Hardware/Enrique Lourido and Cummings Electrical limited.
What the tabloid article did fail to mention was how could CMC, a Chinese state-owned mega contractor with billions in projects all over the world, possibly win this tender over two local bidders, one being a domestic electrical company and the other a hardware and tools store. Part of the criteria to qualify, the bidder must have completed US million in works over the last three calendar years. Based on the tender document, the two lowest bidders didn’t qualify for financial and work related experience in Guyana. I, being privy to read this tender document, could tell you that the engineering estimates was poorly compiled, and would seem to grossly underestimate the quantities of materials and labour. This project is a turn-key one, in which the chosen contractor has to supply and build according to design and deliver a finished product in eighteen months, with severe penalties for any time over the contract duration. 10 per cent of all gross invoices submitted will be withheld until after the defects and liability period is over, to rectify any defects or any other liability that might incur by the contractors during the project. There is no way the chosen contractor can deliver a substandard job and get away with it.
Editor, this contract was in the making for several years now with one of the bidders even setting up a factory to produce high-voltage cables in the Tiger Bay area, which is a bit dormant at the moment. I suspect this is the contractor Kaieteur News mentions in their article that will be launching a protest to the Government and the IDB. With the PPC in place, now we can get a speedy award and a judgment based on the protest that’s to come soon. The 2017 Budget pegs GPL at over billion in losses, with the swift implementation of this project, we can see billions in saving on loss reduction, which is currently close to 30 per cent based on 2013 estimates.

Yours truly,
Michael Persaud