Jun 18, 2017

PM intervenes to prevent Central Expressway Phase III tender bender

Prime Minister .Ranil Wickremesinghe has intervened and instructed the Road Development Authority (RDA) to investigate as to how the "Highest" bidder of the recently concluded Central Expressway Phase III tender was accepted as technically competent whilst there were accusations of the facts being otherwise.

Industry experts claim that the tender which was held only between 04 companies nominated by the Japanese government in fact became a "one horse race" with a very strange condition the tender contained for technical qualification - The successful bidder having to have successfully concluded a contract which is over USD 650Mn in Value.

It is common practice in the world that the large projects are divided among many companies. Hence there are not so many large value road projects in the world. However the bidder who quoted the highest price "claimed" to have completed such a project in Algeria.

However, supporting documents and information emerging in local and overseas media recently, challenges this claim thus making the bidder technically disqualified.

Prime Minister's intervention not only corrects the process and instills the spirit of good governance but also will save the country more than 12 Billion Rupees since the bidder to whom the RDA was proposing to award the contract had a price difference of over Rs.12 Billion than his competitor.

(1) Published articles (attached) imply that the Japanese Consortium Contract was terminated due to massive construction delays (6 years beyond the 2010 agreed date and still not completed), poor quality construction (collapsing tunnel) and unreasonable escalation demands. Raises concerns and need to investigate. CEP3 cannot afford such inferred issues to be repeated.

2) Taisei did not submit their completion certificate for the project as part of their Nov 23rd bid submission which is a major deviation and should result in an immediate non responsive bid as per clause 6.4 Instruction to Bidders.

3) Taisei was issued a letter on January 18th to furnish the certificate and details to support their claim of experience. The certificate that was provided was dated 29th January 2017 which raises major questions as such certificates would be dated upon satisfactory completion of the project and therefore should have had a date prior to the date of submission of tender.

4) The certificate is actually more like a letter that is in a non standard form. It confirms the contract was terminated and only states the work done upto that point as an estimated value which is highly unusual. This letter is addressed to the name of the consortium COJAAL. So to confirm its authenticity, ALL members of the consortium should have stamped and sign this letter prior to submission to RDA.

5) The fact that this contract was cancelled whether amicably or not, means that the project can neither be considered completed or substantially completed as per 2.4.1 Contracts of Similar Size and nature.

6) This letter from client was clearly obtained beyond the date of submission of the tender of November 23rd 2016 and only because the RDA requested. It was not issued by client voluntarily as per standard process of any project completion which raises questions as to the accuracy of it's content.

7) This project started in 2006 and was due to finish in 2010 and cancellation occurred in 2016. It is not clear how long the dispute was going on and on which date the work had stopped. The requirement was work completed in last 5 years so there is no evidence to confirm the construction work that took place between 2011-2016 and the subsequent % and $ value associated with Taisei met this requirement. In any case it has already been demonstrated that the project was neither completed as per contract or substantially completed so the requirement has already not been met.

8) These points highlight that Taisei's response to the letter dated 18/1/17 raises significant questions and is incomplete and inconclusive. Taisei has not proved beyond reasonable doubt that they meet the requirement at per 2.4.1. It is clearly stated in the RDA letter that if the contractor fails to provide the required information prior to the deadline of February 1 2017, the bid maybe rejected in accordance with ITB Sub Clause 27.2.