Wapda in talks with ‘disputed’ bidder over Mohmand dam

Updated February 12, 2019

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Wapda official says contract for Mohmand dam has not been awarded yet. — File photo
Wapda official says contract for Mohmand dam has not been awarded yet. — File photo

ISLAMABAD: Amid the ongoing Mohmand dam controversy over its bidding process and conflict of interest, the Water and Power Development Authority (Wadpa) is negotiating the Rs309bn bid offered by a consortium led by Descon Engineering, a firm founded by adviser to the prime minister on commerce Abdul Razak Dawood, for a price cut.

Wapda chairman retired Lt Gen Muzammil Hussain told the Senate Standing Committee on Water Resources on Monday that Wapda had been engaged with the consortium — comprising Descon, China Gezhouba and Voith Hydro — for the past one-and-a-half months and the contract had not been formally awarded so far.

Senator Ahmad Khan told the committee that proper negotiations between the client and the contractor could result in a 15-20pc discount because the dam construction mainly required steel, cement and earthwork. “You can bring down bid price by Rs50 billion when you go item by item,” he said.

Official says contract for Mohmand dam not awarded yet; evaluation of proposals by March 7

He said there were a lot of deficiencies in the bidding mechanism of Wapda and other public sector organisations, even though they claimed to strictly follow procurement rules in a transparent way. Giving an example, he said a contractor won the lowest bid of Rs27bn for Naulong Dam in Balochistan that became controversial. Wapda went for a rebid and his (Senator Khan’s) company made Rs18bn bid yet the previous successful bidder won the project again with its revised bid of Rs17bn for exactly the same job a year later. “This is a big question mark,” he remarked.

A Wapda official attending the meeting confirmed the Naulong bidding results as reported by Senator Khan but said the final bid was perhaps Rs19bn and not Rs17bn. The Senate committee, headed by Senator Shamim Afridi, then decided to hold a special meeting on the Naulong dam and asked Senator Khan and Wapda chairman to come up with complete record.

‘Trapped’ by Chinese firms

Responding to queries raised by senators at the meeting, the Wapda chairman said Pakistan had been trapped by a couple of Chinese companies, as reputed international firms including those from Europe, had long exited while the country’s local capacity could not be developed over the years to take up mega projects.

Lt Gen Hussain said Descon, despite being the country’s biggest engineering company, was not capable of handling such a large project alone and had to pool in China Gezhouba. “Let me add with a pinch of salt that two to three Chinese companies are playing games with us. You are trapped,” he said, adding that China Gezhouba offered $114 million for a project for which Europeans offered $235m to $250m.

The signature of European companies in Pakistan had come to an end long ago and Ghazi Barotha was the last project comple­ted in 2002 in which an Italian firm participated. He said Wapda was trying to engage 2,000-3,000 Pakistani engineers in the construction of Diamer-Bhasha and Mohmand dams, while the monthly remuneration of Pakistani engineers had already increased from Rs45,000 to Rs200,000-Rs300,000.

Overall around 6,000 Pakistanis would work for Mohmand dam and about 15,000 in Diamer-Bhasha. Ultimately this would improve local capacity, he said, adding China Gezhouba through the same process had trained its 20,000 engineers who were then able to develop 20,000 dams with local enterprises.

The Wapda chairman said the Mohmand dam would be completed within five years with the induction of modern technology instead of original plans of about six years. One of his aides told the Senate committee that evaluation of proposals would be completed by March 7 and the contract would be formally awarded by March 30. The mobilization of consultants would also begin in March, the committee was informed.

Lt Gen Hussain lamented that work on the project had not been started for the past 50 years though all the nine cases against the government on the issue of Mohmand dam had been settled positively.

About the project, he said the dam would have a gross storage capacity of 1.9 million acre feet (MAF), live capacity 0.67 MAF with power generation potential of 800MW and irrigation capacity of about 17,000 acres.

Deploring a campaign against Wapda and the bidding process, he contested that it was not a single-bid contract. However, he confirmed that one of the two bidders – FWO, China Power and Andritz Hydro – was not pre-qualified and financial bids not opened.

He said the bidding process was completed over a period of eight months – from November 23, 2017 to June 26, 2018 – for which 23 firms purchased bidding documents, 15 attended the pre-bid meeting, 10 visited the dam site and only two joint ventures submitted bids for the project.

The senators, however, reminded him that media should not be blamed for controversies when projects took decades to move from files to ground and benchmarks kept changing. “There is always some truth in controversies when projects are not handled transparently,” Senator Dr Jehanzeb Jamaldini remarked.

Published in Dawn, February 12th, 2019