LAHORE, Feb 9: On the pressure from the Islamic Development Bank, the Wapda authorities have agreed to divert a Rs360 million contract for 500 KV transmission towers to a Saudi firm Alhidada from the Pakistan Engineering Company (Peco), Dawn learnt here on Saturday.

As per details, the Water and Power Development Authority (Wapda) floated tender in July 2000 for towers for 500 KV line to supply electricity to Lahore from the Ghazi Brotha Hydel-power Project.

The transmission line was to be constructed in two stages — from village Ghazi to Rawat and Rawat to Lahore. The IDB agreed to finance the first phase at a cost of Rs360 million and second phase costing Rs370 million was to be funded by the Kuwait Fund for Development.

The Pakistan Engineering Company (Peco) and the Alhidada bid for the first phase, says a source privy to the situation. But Alhidada’s bid was found incomplete; it missed out on the price of one of the components of towers. Bidding companies sometimes deliberately don’t mention price of certain items; it gives them a space for manoeuvring during any subsequent bargaining. In order to curb such undesirable practice, the highest price mentioned by the other bidders for the same component is taken as the price when final calculations are made for that particular bidder. This is internationally accepted practice. The Peco was found to be the lowest bidder when final price was calculated according to this formula, he said.

But the IDB objected to the calculation and asked Wapda to re-calculate price by taking average or lowest price mentioned by other bidders. On Wapda’s refusal to do so, it kept the final approval, which had to come from it being the financier, pending for more than a year, says a source in Wapda.

Meanwhile, Wapda came under tremendous pressure to complete the transmission line as soon as possible because the deadline for the Ghazi Brotha project coming online was drawing closer. But it also wanted the project going to the Peco for moral and nationalistic reasons.

But the IDB stuck to its guns and wanted final price recalculated by taking average or lowest price mentioned by the other bidders instead of the highest. Because if calculated on the basis of lowest price, the Alhidada would become the lowest bidder and entitled to the project. The row consumed much of the last year as both sides stuck to their respective positions, he said.

The National Engineering Services Pakistan (Nespak), consultant of the project, also came under increasing pressure from the Saudi firm because of its heavy presence in Saudi Arabia. The Alhidada threatened to “affect its projects in the kingdom.”

But the Wapda authorities had a limit to standing up to that kind of pressure and had to yield ultimately. During the November 2001, it informed the Peco management that it could no longer take the pressure and was diverting the deal to Alhidada.