Transparency raises more issues about Golen Gol

Published on 8 Sept. 2012

Islamabad:  Transparency International, while appreciating prime minister’s action taken over alleged foul play in Golen Gol Hydropower Project by the Water and Power Development Authority (Wapda), has raised more serious allegations in the contracts already awarded in the project.

In a letter written to the PM through his Principal Secretary, TI-Pakistan has said that it appreciates quick action taken by the prime minister over alleged violation of law of the land by Wapda had directed the Wapda authorities to submit a detailed report within 10 days.


“However, after Wapda’s denial published on September 5, 2012, that the Authority has clarified that the bids for the said lot have been evaluated in accordance with the qualification criterion, mentioned in the bidding documents and that no violation of the rules has been committed in evaluating the bids, TIP received another complaint and allegations levied by the complainant against Wapda and Al Fjar relationship in this tender Lot 3.2 E&M Works, and also in other two tenders,” says the letter.

The allegations mentioned in the TI-P’s letter are:

1. That Al-Fajr International was not member of the approved JV of the Consortium of M/s Rainpower/ Alstom Grid, Pakistan, for Lot 3.2 E&M Works. The name of M/s Al-Fajr was included in the JV after Wapda had issued the list of approved bidders/JVs, which is against Article 29.1 of the prequalification documents.

2. That according to the conditions of the submitted tender by JV, M/s Al-Fajr has to be paid directly Rs910 million for transportation of plants from Karachi Port to Chitral Town in Khyber Pakhtunkhwa, which is 500km from Islamabad, whereas market rates of such transportation is not more than Rs100 million for 200MW power plants.

3. That Al-Fajr International was also not part of the approved contractors/JV, nor sub-contractor for the same project, Lot for Civil Works, in 2010 at the time of tendering by Wapda.

4. That the tender for civil works submitted by M/s Sambu-Construction Co, S/Korea, was non-responsive as the time of tender opening found that by M/s. Sambu-Construction Co did not submit the bid guarantee.

5. That after the tender opening, Al Fajr became local representative of the JV. It has been reported on the website “Al-Fajr International, being a local representative, facilitated M/s Sambu-Construction Co S/Korea by awarding them the contract for the construction of 106MW Golen Gol Hydropower Project of Wapda (Civil Works) valuing Rs1.9 Billion in August, 2010”.

6. That after Al Fajr was appointed as their local representative by M/s Sambu-Construction Co, S/Korea and SARCO, Wapda waived the non responsiveness status of M/s Sambu-Construction Co, S/Korea, and awarded the contract to M/s Sambu-Construction Co, S/Korea, by illegally accepting the bid guarantee submitted after many days of tender opening. On the website it is stated “Al-Fajr International, being a local representative, facilitated M/s Sambu-Construction Co, S/Korea, by awarding them the contract for the construction of 106MW Golen Gol Hydropower Project of Wapda (Civil Works) valuing Rs1.9 Billion in August, 2010.

7. That another contract of Rs7.52 billion for Golen Gol project for lot-2 was awarded by Wapda in 2010 to M/s Sambu-Construction Co, S/Korea, and SARCO.

8. That according to PPRA Regulations 2008, mandatory use of SBD of PEC Standard Form of Bidding Documents (Electrical & Mechanical), IB.15 bid security, Section 15.4 is that any bid not accompanied by an acceptable bid security shall be rejected by the employer as non-responsive, pursuant to Clause IB.24.

9. That Al-Fajr International is also local representative, facilitator of M/s. Sinohydro Corporation Ltd, China, for executing an engineering, procurement and construction contract of Rs7.85 Billion Darwat Dam awarded in Feb 2010. This project was initiated by Wapda.

10. That Wapda has declared on its website on 6/6/2012, that the tenders for Lot-3.2 (E&M Works) were opened on 30.06.2011 and contract awarded to M/s Rainpower-Alstom Grid-Indar—Al Fajr, whereas, Kuwait Development Fund is waiting for the secretary EAD conformations so that they may approve the award of contract.

11. That cost of works has been agreed to be funded by the donors, Saudi Development Fund for Civil Works ($40 Million), Kuwait Development Fund for E&M Works ($37 Million), OPEC for Transmission Lines ($30 Million).

“TI-Pakistan requests the prime minister to examine this serious complaint of allegations on Wapda-Al Fajr nexus. And on how Wapda awarded the contract of civil works to a non responsive bidder, after M/s Al Fajr was made the local representative and also the dubious role of Al Fajr as local representatives of M/s Sinohydro Corporation Ltd, China, and the extent of facilities Al Fajr is providing or provided them in Darawat Dam contract.

Wapda actions of alleged irregularities committed in whole project due to allowing Al Fajr late entries as partners, members of JV or representative of Contractors/JV may jeopardize the relations of Pakistan with foreign donors, specially Saudi Development Fund, Kuwait Development Fund, and OPEC.”