LAHORE, July 10: Wapda is believed to be getting ready to award the contract for supply of 13 20/26MVA transformers to an Iranian company, ignoring a lower Heavy Electrical Complex (HEC) bid.

Wapda officials, who did not want to be identified, told Dawn that the notification had already been prepared and would be issued in a day or two. The contract is being awarded to the Iran Transformers Company.

According to documents that were made available to this reporter by the officials, the HEC bid was being ignored on the recommendation of Wapda’s Central Contract Cell (CCC), on grounds that the HEC had not completed the supply to a previous order (PO-485 dated Feb 20, 2003).

HEC officials say they have already supplied three out of 10 units to Wapda under PO-485 and will deliver the rest within the agreed period, which expires on Sept 20.

Wapda had floated an international tender (No 541) against a Kuwaiti loan for the supply of 26 20/26MVA and five 10/13 MVA transformers in three lots. It was opened on Feb 22.

As per tender, Siemens and the HEC put in the lowest bids for Lot I and Lot II, each of which would include 13 20/26MVA transformers. The HEC bid was also the lowest for Lot III — five 10/13MVA units.

After evaluating the bids technically and commercially, the tender-issuing authority and the design department recommended award of contracts to Siemens for Lot I and HEC for Lots II and III.

But the CCC, according to the documents, changed the recommendation and proposed that the contract for Lot II be awarded to the Iranian company in disregard of price competitiveness and government directives requiring public sector agencies to procure goods from within the country and omit such items from the list of barter, credit and loans. The purpose of these objectives is to promote local engineering industry and enhance its capacity utilization.

The sources said Wapda had called both Siemens and HEC for “further price reduction even after the opening of bids”.

The sources claimed that both Siemens and the HEC, a public sector company, had set up their facilities on the “request” of Wapda. The two facilities claim to be operating at 50 per cent of their capacity.

It is also contended that the Iranian company has never produced these transformers before.

According to the documents, the Iranian firm’s bid for Lot I was evaluated to be 1.42 per cent higher than Siemens’ and rejected as a result. Its bid for Lot II was evaluated to be 3.87 per cent higher than HEC’s.

Siemens has been awarded the contract for Lot I at its quoted price of Rs159.561 million (ex works). Similarly, Wapda had told the HEC to reduce its quoted price of Rs160.054 million (ex works) for Lot II and bring it on a par with the Siemens’ bid for Lot I, before the CCC voted in favour of the Iranian producer.

The CCC has recommended that the Iranian firm may be awarded the contract for Lot II at its quoted bid price of Rs137.702 million (CIF) for Lot I. It had quoted a rate of Rs141.717 million (CIF) in its bid for Lot II, which was evaluated by Wapda to be 3.87 per cent higher than that quoted by the HEC.

The CIF price quoted by the Iranian company does not take into account the 25 per cent import duty (Rs34.425 million) and 2.5 per cent port charges (Rs4.303 million), the sources said. “The Lot II will thus cost Rs176.431 million after being landed at the Karachi Port.”

Sources say that Wapda will thus be paying something like Rs16.87 million more than the lowest bid of Siemens for Lot I if the contract for Lot II goes to the Iranian company.— Nasir Jamal