More bidders cry foul over tender process for second Kerawalapitiya LNG power plant

Bidders involved in the tender process for the second 300 MW LNG Plant in Kerawalapitiya are crying foul over the procurement process followed, with changes to the Request for proposal during the tender period, and withholding of the proper specifications required to submit a comprehensive bid.

The tender conditions were imposed haphazardly and only when it suited some bidders, alleges Windforce & RenewGen, the local partner of Chinese-owned Golden Concord Holdings (GCL), the company recommended by the Procurement Appeals Board (PAB) to be awarded the contract.

The Consortium, with 60% owned by GCL and Windforce and RenewGen holding 40%, appealed against the decision given by the Cabinet Appointed Procurement Committee (CAPC) to award the contract to Lakdhanavi Ltd, affiliated to Ceylon Electricity Board through its 63% shareholding of LTL Holdings which owns 82% of the bidding company shares, outlining a number of issues, including conflict of interests with CEB members sitting in the Technical Evaluation Committee.

“When one bidder was late by two minutes, that bidder was disqualified because they were two minutes late. Then another was disqualified when the pen drive in which they had saved the bid was not opening in the computer which was used by the committee. But when another bidder disregarded a condition, which specifically states they cannot take in any concessions that were not named in the RFP, they were still considered,” a representative for Windforce and RenewGen told Daily FT. 

The appeal the Company put to the PAB also highlighted this issue, and both the Finance Ministry and Power and Renewable Energy Ministry have highlighted the same. Further, the letter given by the Finance Minister recording his opinion on the matter specifically states that no concessions are available for the bidder in question. 

Further, the TEC and CAPC took over a one-year period for the evaluation, during which time the CAPC Chairman was changed and the recommendations made by TEC were revised on several occasions, as outlined in the 9 page letter by Power and Renewable Energy Ministry Secretary Dr. B. M. S. Batagoda. 

The bidders also highlight a conflict of interest in having several members from the CEB, which holds shares in the bidder Lakdhanavi through its shareholding in LTL, on the TEC.

“There is a clear conflict of interest here, giving one bidder undue advantage,” says a Windforce and RenewGen representative. 

Further, bidders allege requirements outlined in the RFP were revised twice during the tender period to fit the qualifications of one tenderer, who would not have been able to bid under the original RFP requirements. 

In addition, there were shortcomings in the bidding document, with incomplete information given to bidders which left them unable to provide a comprehensive bid. The bid document did not include a Technical Specification Sheet of LNG, leading to deviations in the bid. This prompted the TEC to accept five bidders with minor deviations. 

“We have requested for the specifications of LNG from the TEC repeatedly, but we were not given the same; if the TEC doesn’t know who is to know. We had to make assumptions here, and that’s why some bidders didn’t include a booster pump in the bid, instead costing for a reducer as per the international experience. There was one bidder who had included the cost of the booster pump in the bid, leading to disparities,” one bidder told Daily FT, pointing out shortcomings in the tender document.