Herald Reporter
The State Procurement Board has reversed its decision to cancel the tender for the expansion of Kariba South power station after the sole bidder SinoHydro Corporation Limited protested against it.
The SPB had cancelled the tender following a recommendation

by the Zimbabwe Power Company that the firm had failed to meet the tender requirements.

SinoHydro, however, argued that it met all the tender requirements adding the firm had long signed a Memorandum of Understanding with Treasury for the project.

SinoHydro said in the first place the project was not supposed to be open to tender because it signed the MoU with the Ministry of Finance in 2010 for the US$700 million project.

In a letter to SinoHydro last week, SPB principal officer Mr Cledwyn Nyanhete said his board was reversing its decision to cancel the tender without giving reasons.

“Your technical and funding proposals with respect to the above tender (ZPC/KPS 0212: Kariba South Power Station Extension Project) is accepted to proceed to the financial evaluation stage,” said Mr Nyanhete.

On September 18, 2012, Mr Nyanhete had informed SinoHydro that its bid had failed because the company failed to provide bid validity, spare parts list and site visit certificate.
“Tender No. ZPC/KPS 02/2012 for Kariba South Power Station Extension Project, be and is hereby cancelled due to the failure by the sole bidder to meet tender requirements.

“SinoHydro Limited should collect their financial proposal envelope unopened,” said Mr Nyanhete.
However, SinoHydro Ltd on September 27 contended that the reasons for the cancellation of the tender were weak. The company’s representative, Mr Wu Yifeng, said his company already had a deal with the Government for the project.

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“We would like to remind the State Procurement Board that SinoHydro signed an MoU with the Ministry of Finance in 2010, which is still officially in force and effective. However, this was subsequently ignored by the Government of Zimbabwe when an international tender was floated to which SinoHydro responded after deciding not to raise the issue of the legality of calling a tender for a project already covered by an MoU,” Mr Wu said.

He said in their bid letter they stated that their tender would remain valid for acceptance by the SPB at any time within the period of 180 days from the date fixed by the SPB. “SinoHydro completed their offer in accordance with the RFP and in envelope three (financial offer) we clearly state the bid validity is 180 days as required. In addition, our bid bond is valid until December the 3rd, 2012 and thereafter for a further 35 days for action by ZPC.

“Therefore we would question why the absence of a specific date has been raised as a justification for disqualification,” said Mr Wu.
On spare parts, they stated that in consideration of the limited shelf period of some spare parts proposed for the project, the spare parts would be provided in batches and lots according to the wearing conditions of the plants and equipment to ensure the regular operation.

Mr Wu said in their offer, they clearly provided for a comprehensive spare parts list to be provided at detailed design stages. “The provision of a spare parts list in advance of the final design being agreed by ZPC is counter to normal tender specifications and we believe, would be prejudicial to the best interests of ZPC,” he said. He said SinoHydro also attended three obligatory site visits stipulated by ZPC.

Changes on the deadline of the tender, Mr Wu said, could have resulted in his organisation enclosing the wrong certificate.
He said their attendance was verifiable with the ZPC and its advisors. “For us now to be disqualified on the basis of the above reasons, none of which have a material effect on the tender offer would be grossly unfair.

“Please be assured that we fully respect the tender regulations as laid down by the Government and governed by the State Procurement Board, but we strongly believe that there are mitigatory grounds for reconsidering the decision of PBR1670,” said Mr Wu. It is understood that when the MoU was signed, SinoHydro Ltd would secure funding for the project from Export-Import Bank of China.

Sources close to the developments said during adjudication, SinoHydro took a delegation of officials from Treasury, ZPC and ZPC technical and funding consultancy to Exim Bank.

“When the SPB opened the funding and the technical proposals, they said it was valid and submitted it to the ZPC for evaluation.
“In early September, ZPC wrote a letter to the SPB saying they were happy with the funding and technical proposals by SinoHydro but now all of a sudden they

have changed saying it failed to meet the tender requirements.

“It is clear that there is a hidden hand behind this because people at ZPC do not want to own up to the recommendation they made that the tender was supposed to be cancelled,” said a source. SPB chairman, Mr Charles Kuwaza, a fortnight ago said his board was yet to consider the complaints raised by SinoHydro Ltd.

It is, however, understood that the SPB is not allowed by the Procurement Act to overturn its decisions. It is only the courts that can adjudicate over appeals.
No comment could be obtained from ZPC managing director Mr Noah Gwariro.