Latest update April 19th, 2024 12:59 AM
Jun 18, 2017 News
The Inter-American Development Bank (IDB) has responded to questions posed by this newspaper concerning the Guyana Power and Light (GPL) and the answers have done little or no justice to the queries made.
The questions were specifically about the GPL Power Utility Upgrade Project (PUUP) to rehabilitate the medium and low voltage distribution network. Kaieteur News had asked the IDB via an email whether any payments were made to the China National Machinery Import and Export Corporation (CMC), the company that was awarded the contract for Lot A of the project.
The cost of the project is $4.6B (US$23M). On this issue, the Bank said that the contract for the project was signed in December 2016, and that rehabilitation works are being executed in accordance with the contract and payments have been made accordingly. Further, the Bank said that the execution of the contract includes continuous monitoring and oversight by all parties involved.
The Bank was also asked about the status of the items that were to be delivered, since the contract was signed in December last year. The IDB said, “The contract was indeed signed in December 2016 and as per agreement between GPL and the contractor, the mobilisation period commenced in February 2017. Rehabilitation works subsequently began in May 2017 and are ongoing, as per the contractual agreements.”
With this response from the Bank, it is unclear whether these items have arrived. For the initial leg of the project to be completed there are certain items which need to be sourced and imported into Guyana. These include the requisite line hardware, smart meters and enclosure boxes for the meters among others.
Based on information received, utility poles are being planted as is required by the contract. This had started in the East Berbice/Corentyne area. However, some of the items which were to be affixed to the poles have not been installed. Kaieteur News understands that this delay is due to the power company still having to make certain decisions on the materials to be used on the distribution line.
As of May 29, last, the Guyana National Bureau of Standards (GNBS) had said that it is yet to encounter the smart meters. This entity, according to GPL has to perform accuracy tests on the smart meters before they can be used. The deadline for the arrival of the meters was set at May 15, 2017.
The IDB was told that this publication had received information that CMC is experiencing difficulties sourcing and supplying the materials that meet the requirements set out in the bid documents.
The Bank was asked if this was true and whether it was a matter of concern for the financial institution. To this, the IDB said, “As far as the Bank is aware, all materials will be sourced as per the contractual agreements, and there are systems in place for continuous monitoring by all stakeholders.”
The attention given to the execution of this project is based on the previous performance by CMC on GPL projects, for example the Infrastructure Development Project (IDP) for the development and expansion of GPL’s high voltage 69 kilovolt (kV) transmission lines and associated 69/13.8 kV substations.
Included in the project were the interconnection of the Berbice Interconnected System (BIS) and the Demerara Interconnected System (DIS) and the installation of a Supervisory Control and Data Acquisition (SCADA) system.
According to a report on the project conducted by Caribbean Engineering and Management Consultants (CEMCO), CMC was awarded an Engineering, Procurement and Construction contract for the execution of the contract at a cost of US$33.9M.
The report concluded that the firm selected for this substantial contract is not a construction company being mainly a trading company for the export of Chinese engineering products. It was stated that CMC engaged other Chinese firms to perform all aspects of the contract save for purchasing of goods for the contract and even this aspect was not adequately performed.
This was evidenced by shortages of materials and factory defects, the report said. As it relates to the quality of equipment and materials used for the project, the report said that the items supplied did not confirm to the standards stated in GPL’s requirements.
There were other issues which were highlighted in the damning report which questions why GPL agreed to pursue Lot A of the PUUP with CMC given the company’s previous performance.
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