The contract for the controversial US$2billion Kafue Gorge Lower Hydro Power Station construction project awarded to the highest bidder Sino Hydro Corporation Limited was signed yesterday.
Sino Hydro was the highest bidder and will cost almost US$400million more than the lowest bidder.
Zesco acting managing director Victor Mundende, who did not name the other bidders told the signing ceremony that Sino Hydro Corporation was the best evaluated company compared to the other four bidders that were not named.
However documentation seen by the Daily Nation disclosed that the project attracted bids from a number of serious Chinese companies international construction records. Among them was China State Construction Company with had a turnover of US$120 billion in 2014. This company was the main contractor of the biggest hydro project of Three Gorges project in China.
Others was Dongfang whose bidding price was US$1.36 billion and the lowest bidder China Gezhouba Group Company Limited International (CGGC) whose bidding price was US$1.08billion.
Apparently all the five companies met the pre-qualification process but two of them China International Water and Electric Corporation (CWE) of China and Salini Impregilo SPA under TATA Project limited of Italy pulled out because the new post-qualification conditions were unattainable.
He explained that 11 companies had expressed interest in the project but only five companies were shortlisted to participate in the 750Mega Watts Kafue Gorge Lower Power Station construction project.
“ZESCO through Kafue Gorge Lower initiated the International Competitive Bidding procurement process through pre-qualification of contractors in August 2013. Five companies were shortlisted out of 11 participants. In 2014 KGL carried out due diligence visits to confirm suitability of the five shortlisted companies to carry out the project,” explained Mr. Mundende.
He said in October 2014 SMEC, a consultant from Australia was engaged to review and update the tender documents originally prepared by Zesco, adding that the tender documents were issued to all the five pre-qualified companies on 24th April this year in a tender which closed on 24th July this year.
Mr. Mundende said the evaluation of the tenders in which Sinohydro emerged the best evaluated bidder took only ten days before completion.
“The tender evaluation, in which Sinohydro Corporation limited emerged as the best evaluated bidder, commenced on 27th July 2015 and was completed on 6th August 2015. You may wish to know that ZESCO procurement committee (ZPC) approved the tender evaluation report on 24th August, 2015 and the final notice of award was issued on 7th September 2015, subsequent to the end of the preliminary notice period,” he said.
Mr. Mundende also said the pre-contract discussion and finalization meetings between Kafue Gorge Lower and Sino Hydro took place from 14th to 19th September, 2015 before the Zambia Public Procurement Authority authorized Zesco to proceed with the award process for the project on 30th September, 2015.
“The contract documents were finalized and submitted for perusal to the office of the Attorney General on 8th October, 2015 and the contract was approved on 14th October, 2015.