Transparency in contract awards


US$2billion is a lot of money which should only be spent if all questions regarding the expenditure are clarified to the satisfaction of all concerned parties.

This is not the case with the engineering procurement construction and financing agreement between Kafue Gorge Lower Power Development Corporation Ltd, (KGL) and Sino-Hydro Corporation that was signed yesterday.

The fact that we are experiencing energy supply difficulties does not invalidate the need for caution, prudence and circumspection in the manner contracts are entered into because ultimately the consumer, the Zambian, must repay the money used.

It is our hope that the new Minister of Energy and Water Development, Ms. Dora Siliya and her permanent secretary Brigadier-General Emelda Chola, who were not represented at the signing ceremony, will make this matter their first priority in order to investigate the contract and settle any anxieties by competitors and media alike.

There may indeed be nothing to worry about, but the truth must be told first.

Far too many questions remain unanswered, the most important of which is why Zesco chose to give the contract to the most expensive company where Government will pay more than $300 more than the lowest bid from equally competent and qualified contractor.

Even as the contract was being signed yesterday there was controversy and drama among losing contenders some of whom have alleged harassment with threats of deportation by immigration for contesting the award. 

Even the Zambia Public Procurement Authority was drawn into the controversy but appears to have failed to resolve issues in contention.

Our concern is that the US$2 billion project will be financed by the Zambian people and every effort must have been made by those assigned the responsibility to ensure that the best value for money arrangement was entered into, considering that Sino-Hydro was the highest bidder while other equally qualified companies, one with a huge turnover of US$200bn per year, offered to build the project at a lower cost.

Justification must be given why the lower cost, a whopping difference of more than US$300 million, were rejected.

The main issue of contention is that in 2012 the Government decided that Zesco should develop the 750 Kafue Gorge Lower hydro power project using international competitive procurement procedures and through pre-qualification 5 companies out of 11 were shortlisted.  In 2014 KGL carried out due diligence visits to confirm suitability of the 5 shortlisted companies. 

Somehow in April this year fresh tender documents were issued to the 5 companies and KGL claims that Sino-Hydro Corporation emerged as the best evaluated bidder.

Other bidders are contesting this process in which parameters were changed midstream in order to suit the winning company.

So far we have made enquiries and none were responded to and yet it must be clear that this is not a matter that can be laid to rest without finalization.

Often times the award of these contracts may be by the rules and yet perception will sully and jaundice the award.  That is why transparency is important.  All parties must be in the know and nothing, no goal posts should be changed midstream otherwise competitors will cry foul and however legitimate issues will be raised as the case is now.

Categorized | Editorial

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