Sino power contract boils


SINO Hydro should have been disqualified from participating in the 750 megawatts Kafue Gorge Lower Power Station construction project because of conflict of interest, China State Construction Engineering Corporation Limited (CSCEC) has submitted before the Lusaka High Court.

The company has cited 39 grounds why Zesco Limited should not have awarded Sino Hydro the US$2 billion contract.

CSCEC has revealed that Sino Hydro Corporation Limited was a company Zesco  contracted to do the feasibility study in which position had made conclusive decisions relating to the project.

Papers in court disclosed that   under a joint venture entered into in 2011, Zesco, China Africa Development Fund and Sino Hydro Corporation Limited worked together in a Public Private Partnership arrangement which would have seen the project being constructed at a total cost of US$1.94billion from an initial estimate of US$1.5billion.

The company was also in a joint venture with ZESCO.

In the joint venture, Zesco and the two Chinese companies were partners with China Africa Development holding 35 per cent while Sino Hydro Corporation held 65 per cent.

“Prior to the issuance of the invitation for bids, Zesco on 5th September 2013, had written to CSCEC, Sino Hydro and other bidders notifying each bidder that they had been shortlisted for prequalification to tender for the Project and that they would be invited to submit bids in respect of the tender in due course.

China State Company stated that during the tendering process from the time the invitation for the bids was issued up to 21st August 2015, being the date Zesco issued a notice that Sin Hydro had been selected as the best evaluated bidder under the tender, several anomalies were observed and concerns raised by all bidders.

“Among the anomalies to be observed was that while the bidding documents clearly confirmed Sinohydro’s prior participation in the project by way of having issued the Final Feasibility Report in respect to the project, the same company was shortlisted among the prequalified bidders for the tender.

Other anomalies observed and contested against were the new irregular post qualification requirements imposed by Zesco and the irregular bid evaluation which were indicative of a predetermined outcome of the tender process and the irregular disqualification of otherwise responsive bids.

China State Construction Company contested the decision by Zesco to award Sino Hydro the contract until the issues raised where addressed according to the law but Zesco went ahead to award the 750MegaWatts deal as they (Zesco) rejected to hear the issues raised. China State Construction Company in its remedies sought in the appeal were that Sino Hydro be disqualified  from participating in the tender due to conflict of interest and that the irregular post qualification requirements undertaken by Zesco be reversed in preference for verification of compliance by the bidders of prequalification requirement.

The company demanded that the irregular evaluation of bids undertaken by Zesco be reversed and that the tender be re-evaluated without the participation of Sino Hydro Corporation, but shockingly Zambia Public Procurement Authority dismissed the appeal.

CSCEC stated that all the efforts made were aimed at addressing the substantial public interest the matter had attracted given the monetary value and its strategic importance and that the arbitration proceedings were aimed at safeguarding the interest by protecting the transparency of the procurement process.

“The applicants seek an interim measure of protection from the Court by way of an order of interim injunction restraining the respondents or either of them from taking any or further steps in furtherance of the award of contract to Sino Hydro or any other bidder until the final determination of the arbitral proceedings or until further court order,” it stated.