ISLAMABAD, Jan 18: A project for providing ‘clean drinking water to all’ has been marred by delays and complaints of unfair treatment to investors during the post-bidding process.

The Rs16 billion project, announced by President Pervez Musharraf in 2004, is yet to take off in real terms as bidding results for four out of seven segments have been cancelled for re-bidding, primarily because of lower than officially assumed rates.

While the lowest bidder, a Swiss company led by a Canadian lady, has accused the Clean Drinking Water Authority of ‘discrimination and victimisation’ in the bidding process to the benefit of another competitor of higher rates, CDWA project director Brig (retd) Sikandar Jawaid has defended the entire process and termed it ‘transparent’ and in accordance with the laid-down procedures.

Documents available with Dawn, however, suggest that ‘missing documents’ on the basis of which the CDWA declared the lowest offer of Rs7.2 billion as non-responsive had been duly received by the project award committee much in advance.

The Rs15.84 billion project involved installation of 6,035 plants across the country including three-year operation and maintenance responsibility.

Originally the project cost was estimated at Rs7.8 billion but that did not include operation and maintenance and had to be revised on the basis of initial glitches in the setting up of 409 plants. As a result, the project was transferred from the ministry of environment to the ministry of industries.

The revised cost of the modified project was arrived at by the National Engineering Services of Pakistan and approved by the Executive Committee of the National Economic Council on the basis of membrane technology for six packets in four provinces, Azad Kashmir and Northern Areas and a seventh packet of reverse osmosis for saltish water purification throughout the country.

Nespak, the project consultant, pre-qualified 12 out of 90 companies that had applied for the seven different packets. The pre-qualification process was approved by a committee comprising representatives of various ministries. However, only five companies participated in the bidding in July last year because of changed political situation after the judicial crisis. For the first two packets in Sindh and Balochistan (packet 5 & 6) for which the bidding was held on July 7, the lowest bids of M/S Green Power were accepted for being within the engineers’ estimates while packet one (the NWFP, Northern Areas and Federally Administered Tribal Areas) was given to Ideal Hydrotech.

For the remaining four segments – three in Punjab and one spread over the entire country – had been rejected because all of the bidders offered much higher than Nespak’s estimates. In the re-bidding held in August 2007, the lowest bidder turned out to be Global Life which offered prices found to be 6.22 per cent, 4.2 per cent, 20.86 per cent and 57.93 per cent lower than Nespak engineers’ estimates, costing a total of Rs7.2 billion that was about 30 per cent cheaper when seen in the overall context of four packets.

The owner of Global Life Water, Lin Armstrong Sharwood, told Dawn that her firm was pre-qualified on the basis of a Rs30 million guarantee, but she was asked by the authorities after the bidding results were made public to replace it with a new guarantee. General Electric of the US and Trunz Corporation of Switzerland were joint venture partners with Global Life, a registered company in Pakistan. The CDWA even returned the original guarantee for an amended bid security, which legally belonged to the government of Pakistan.

Brig (retd) Sikandar Jawaid agreed that legally the document should not have been returned to the bidder but said it was done in “good faith to facilitate the company” for extension in the expiry date and the change in the name of bidder rather than the manufacturer.

Ms Lin Armstrong claimed her company’s competitor in another packet was not only provided a letter of acknowledgement for being the lowest bidder, but was also facilitated despite a controversial guarantee that was found to be fake and a case had been registered against the firm for fake guarantee at an Islamabad police station. On the contrary, her firm was never issued an acknowledgement letter for being the lowest bidder which showed ‘unfairness, discrimination and victimisation’.

Brig Jawaid said the amended bid security of Global Life too was found to be forged after the bidding. About the allegation of fake guarantee of the other firm that was awarded the contract, he confirmed that a case had been registered against the firm but claimed the ‘hitch was removed’. He declined to go into details.

After a lengthy process, the CDWA project director wrote to the Global Life on December 12 that after evaluation of the documents by the consultants, its bid had been declared as non-responsive because it failed to provide four documents including amended bid security, packet-wise key personnel to handle the project, authorised copies of joint venture agreements and financial statement but it would be allowed to re-bid later.

Minutes of the meeting held four days before the rejection letter, however, reveal that consultant had received and in fact informed the government that three out of four grounds described above had been complied with. For example, the consultant had informed the meeting that the company had submitted packet-wise organogram, joint venture certificates “but failed to provide amended bid security”.

When asked why was the Global Life was not blacklisted when the CDWA accused it of providing fake amended bid document, Brig Jawaid said the company was backed by one of the world’s leading manufacturer, General Electric, and the government did not want to lose its low prices.

He said at no stage the transparency was compromised.

He said the successful bidder was required to provide performance guarantees at every stage in equivalent of the payments to be made by the government of Pakistan to ensure that the contractor could not give up the project and run away even three years after the project implementation. He said the re-bidding results were very encouraging and a lot of companies were buying bid documents. He said that one purification plant each had been installed in Sindh, Balochistan and the NWFP and he would personally examine the performance of the three plants before the remaining plants are installed elsewhere.

He said the entire project, including plants for which the re-bidding was in progress, would be completed by May 2008.