The Cabinet Appointed Negotiation Committee (CANC) has recommended that the tender for the New Galle Transmission Development Project of the Ceylon Electricity Board (CEB) be awarded to Lanka Transformers Ltd. (LTL) despite it being in violation of the project’s tender clauses.
The US $30 million project which involves the construction of a grid substation in Galle and the construction of transmission lines was awarded to the CEB subsidiary company LTL last month.
According to the project’s tender document clause b.1 and b.2 of Section 8, a bidder who is affiliated or associated (inclusive of a parent firm) with a “firm or organization which has been engaged to provide consulting services for the preparation related to procurement for or implementation of the project” cannot be eligible to submit a bid.
However, despite the CEB currently hold 63% of LTL’s shares and the CEB chairman and General Manager both having been on the LTL board of Directors, the tender was awarded to LTL. Nonetheless the CEB has not provided a parent company guarantee while other eligible bidders claim that this is a clear conflict of interest.
The tender document also states that the bidder should preferably be from a Nordic/Baltic country or else source at least 50% of its supplies from a Nordic/Baltic country. This, along with other clauses, has been added as part of an agreement with the Nordic Investment Bank which is providing funds for the project.
Power and Energy Ministry Secretary and acting CEB Chairman M.M.C. Ferdinando told The Sunday Times that a letter had been sent to the all other bidders explaining that the CANC had recommended to the Cabinet of Ministers that LTL was the most suitable bidder.
He said that all appeals against the recommendation have already been sent to the Procurement Appeal Board (PAB) while the matter will thus be taken up by the PAB.
“The other bidders have made their representations to the Procurement Appeal Board, against the recommendation. This Board will look into the matter and come to a conclusion on whether any violations have been made,” he said.
When The Sunday Times referred to the tender criteria and LTL’s ineligibility as a bidder the Ministry Secretary refused to comment any further stating that any necessary action will be taken by the PAB.
The Galle Grid Substation project is set to begin between January and February next year while it is estimated to take two years for completion.
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