Finance Minister Larry Howai has asked the chairman of the National Insurance Property Development Company Limited (Nipdec) Hamlyn Jailal to provide a report on the company’s decision to award a $36 million contract to Super Industrial Services (SIS).
The five-year contract is to supply 35 buses for the Public Transport Service Corporation (PTSC).
Nipdec had recommended SIS to its client, the Ministry of Transport, for the contract about a month ago.
However, other companies which tendered for the job have raised objections to Nipdec’s decision.
Those companies, which argue that SIS has traditionally been a construction company and bus procurement company, raised the issue in a meeting with Howai last week.
Howai, in an e-mailed response to an Express query on the subject, explained that while the matter fell under the remit of the Ministry of Transport, “I would have the chairman of Nipdec investigate and provide me with a report on the matter.”
On Saturday, Transport Minister Chandresh Sharma defended the decision to award the job to SIS as Nipdec had done a proper procurement with SIS emerging as the favoured bidder for the contract.
He told the Express that SIS was being victimised because it was a company perceived as a friend of the People’s Partnership.
“That is the problem. I am sure if another company had gotten the contract, it would not have been a story. If there was a breach in the procurement then there are avenues such as judicial review for companies to follow,” he said.
Sharma explained that no ministry can grant contracts and that was why Nipdec was retained by the ministry to procure a contract.
“SIS, like other contractors, has been in business for many years. The People’s Partnership now has more contractors coming on board which is good for business,” he said.
Sharma said Nipdec has very strict rules about how it conducts its business.
Nipdec’s decision that SIS be awarded the $36m contract has not only raised concern among other tenderers but from staff at PTSC who told the Express that SIS, which has been awarded only construction contracts under the People’s Partnership administration, does not have a track record in procuring buses.
Jailal told the Sunday Express last week that Nipdec was in negotiations with the preferred bidder, SIS.
A letter of award was sent to SIS dated June 6, 2013.
“Part of tendering involves negotiations and in these negotiations the prices could come down,” Jailal told the Express without divulging any more information.
The Express was told that the PTSC board was informed of Nipdec’s choice last month.
An informed source at the PTSC told the Express that there were reservations about the Chinese manufacturer for SIS’s buses, Sunlong Bus Manufacturers.
“SIS has no track record in procuring buses so it was interesting to see them tendering for the project. If it was up to the PTSC, I am sure they would not be getting a contract to bring down buses,” the source said.
The source also explained that in contracts such as these, money was made in the maintenance.
“If you choose buses which are not of a certain calibre then you’re going to run into problems as they run the risk of having to pay high maintenance fees as well as provide labour. So apart from the dollar figure amount in the contract, you’re talking about monthly payments from PTSC for maintenance and parts,” the source explained.
The Express was told that unlike other evaluations where a technical person was included in the team which visited the country where the buses were being procured, only Jailal and another Nipdec representative visited Thailand a few months ago to view the proposed buses by SIS.
Disgruntled tenderers told the Express that PTSC was attempting to streamline their brands of buses so it was a surprise the evaluation team would select a manufacturer with which the company has no relationship history.
“PTSC has a mixture of brands. What was understood is that the company was trying to reduce their brands, which was putting a strain on their engineering and inventory system. Every brand comes with its own technology and would require different expertise in engineering. Now, a whole new line of inventory would have to be introduced,” said one tenderer.
Another tenderer, who wanted to remain unidentified, told the Express: “I am disappointed in the whole process. The PTSC should look at aligning a relationship with a manufacturer so they can buy buses to suit specific purposes like rural use, road size and fuel. These buses were supposed to be equipped for CNG use but those Chinese buses are not compatible with CNG.”
Last year, Cabinet approved $100 million to supply 100 buses to the PTSC under former Minister of Transport Devant Maharaj.
However, Maharaj subsequently scrapped the tender which was issued by PTSC and directed that Nipdec handle the procurement for the PTSC.
The Sunday Express was told that the lucrative contract was then divided into three parts for the buses to be secured in three tranches — two tranches of 35 buses and one tranche of 40.
The tender closed last June and it has taken Nipdec over a year to recommend a suitable bidder for the contract.
In January, the Sunday Express reported exclusively that a recommendation was made to award the first tranche of buses to SIS by Nipdec’s Evaluation Committee.
According to the Draft Estimates of Development Programme for the financial year 2013, the money allocated for the buses is $20 million. In 2012, $40 million was budgeted for the buses.
SIS, according to the company’s website, is “primarily as a provider of general contracting services to the companies on the Point Lisas Industrial Estate.”
The 35 buses will be the second multi-million dollar contract to be awarded to SIS under the Ministry of Transport and Minister Chandresh Sharma.
Last November, SIS and its Barbados-based partner, Preconco, were awarded a $232.5 million contract by Nipdec to build the Motor Vehicle Authority (MVA) in Frederick Settlement, Caroni.
Last month, the company issued a full page advertisement denying it was the recipient of special favours by any government or its agencies and it had secured less than one per cent of the contracts awarded state companies for which SIS had competitively and transparently tendered. The company claimed that it had only received $310 million in contracts from 2010 to 2012 from the Education Facilities Company Limited (EFCL), National Gas Company (NGC), Nipdec and PURE.
The 12 companies
for the contract:
AM Marketing (US$6.2 million)
D Rampersad (US$5.9 million)
Sterling Service (US$7.5 million)
Higer (US$7.4 million)
BMC Sanayibe Tickrat (US$10.5 million)
Universal Projects (US$4.5 million)
Eagle Transport (US$14.8 million)
Caribbean Power Solution
VMCOTT (US$8.1 million)
Elvis Marketing (US$7 million)
SIS (US$6 million)
Solaris (US$12.6 million)