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$232m CONTRACT FOR SIS

PM's contractor gets Nipdec nod to build Motor Vehicle Authority

By Asha Javeed asha.javeed@trinidadexpress.com

A top financier of the People's Partnership administration has been awarded a $232.5 million contract by the National Insurance Property Development Company Ltd (Nipdec).

It is not the first contract the Krishna Lalla-owned company, Super Industrial Services (SIS), has received from the People's Partnership Government.

But it is the most lucrative to date.

On November 27 last year, Nipdec's company secretary wrote to SIS manager Einool Hosein, informing the company that Nipdec had agreed to award the $232,501,329.22 contract to SIS and its Barbados-based precasting partner, Preconco, for the design-build-construction of the Motor Vehicle Authority (MVA) in Frederick Settlement, Caroni.

SIS, the contractor linked to the completion of construction of the homes of Prime Minister Kamla Persad-Bissessar and former minority leader of the Tobago House of Assembly (THA) Ashworth Jack, was the contractor behind the $45 million Siparia Market and the $70 million Couva/Preysal Interchange. SIS is to also benefit from Programme for Upgrading Roads Efficiency (PURE) contracts awarded by Nipdec on behalf of the Ministry of Works.

SIS's construction firm, Casa Contractors Ltd, was responsible for extension works at the Philippine residence of Prime Minister Kamla Persad-Bissessar last March.

The firm also worked on Jack's home in Hillsborough, Mt St George, Tobago.

Lalla, the Sunday Express previously reported, had invested in the Tobago Organisation of the People's (TOP) failed campaign bid to claim control of the Tobago House of Assembly (THA) by footing some of the TOP's bills for its electioneering process.

But informed sources told the Sunday Express that SIS's proposal for the MVA bore a significant error.

The Sunday Express learned SIS did not commit to a ten per cent contingency fee in its total cost for the project, which was $232.5 million. That ten per cent, which works out to be $27 million, would have taken the final cost to $259 million, which would have made it the most expensive proposal.

At $232.5 million, SIS's price was higher than other contractors such as Beijing Liujian at $160 million, Moosai Construction that was priced at $193 million, Adams Construction at $207 million and Yorke Structures Ltd at $208 million, but lower than Kee Chanona at $246 million.

The Sunday Express understands Nipdec raised the issue of the contingency fee with SIS but allowed the company to remain in the process and eventually won the contract.

When the tender was first issued in May 2012, it noted that contractors would be evaluated in seven categories—apart from the general background and financial capability of the firm, its performance history, work experience in design-build services, available manpower, present workload and eligibility based on submission of required statutory certificates.

"Prospective proponents should be capable of undertaking design-build of an office building or similar projects to a value of over 80 million dollars per year," the notice read.

The MVA is set to be constructed on five acres of land—20,000 square feet for the building and 4,000 square feet for a warehouse—and the tender also included the cost of furniture and equipment.

Shortly after the proposals were closed on July 12, 2012, Nipdec floated a $339 million, 13-year bond at an annual rate of 5.15 per cent on August 22, 2012 to finance the project.

In its terms of issue, which was published in the daily newspapers, Nipdec stated: "The proceeds of this issue will provide for the implementation of Phase II of the Motor Vehicle Authority of Trinidad and Tobago project," the terms of the bond stated.

"The principal monies and interest represented by the bonds will be charged upon and are payable out of the Consolidated Fund and are secured on the revenues and assets of the Republic of Trinidad and Tobago," the terms stated.

Nipdec chairman Hamlyn Jailal, who was reappointed last week, confirmed the award to SIS in a telephone interview yesterday.

Questioned on the issue of the contingency fee, he declined to give answers but agreed to give the Sunday Express an interview this week to put matters in the public domain.

Jailal, who was campaign manager for Tunapuna MP Winston Dookeran in the May 24, 2010, general election, was first appointed deputy chairman and succeeded Ronald Ramcharan as chairman after he departed the organisation.

Nipdec is a limited liability company owned by the National Insurance Board (NIB).

Questioned on what would happen to the excess $100 million since a contract was awarded for the sum of $232.5 million, Jailal said it would be used to fund access centres around Trinidad and Tobago.

The MVA was first proposed by the former People's National Movement (PNM) administration in a heads of agreement with the government of Nova Scotia in Canada.

At that time, the MVA was priced at $45 million.

The Canadian government had recommended a partnership with the Government and the Barrington Consulting Group (BCG).

Minister of Transport Chandresh Sharma, whose ministry outsourced the procurement exercise to Nipdec, told the Sunday Express yesterday he did not know who the contract was awarded to.

"Nipdec is independent of the ministry. We just need to get the job done," he told the Sunday Express in a telephone interview from Toronto, Canada.

The Sunday Express understands the Couva-based SIS is also in the running for two other major contracts.

Last Wednesday, a recommendation was made to award the first tranche of buses for the Public Transport Service Corporation (PTSC) to SIS by Nipdec's Tenders Committee for $35 million, the Sunday Express was informed.

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. The Sunday Express learned that the final figure for the 100 buses, which will be done in tranches, is $100 million.

Jailal said the evaluation is still ongoing, and a recommendation does not guarantee that a contract has been awarded.

"The buses have attracted a fair amount of attention. But I am proud to say that I have been chairman of a board which has rejected proposals made by the tenders committee. Who is recommended may not be accepted by the board," he told the Sunday Express.

The Nipdec board includes Ravi Ramoutar, Navindra Ramnanan, Melissa Bart-Smith, Dwight Stoute and Krishmanie Misir.

SIS owner Lalla did not respond to calls to his cellphone yesterday.

A number of attempts to reach company officials by phone last week were also unsuccessful.

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