Tuanze na hi ya Richmond Kwanza..
Tender
PC/10/2006 for Emergency Power Supply from rental Gas Based Generating Plant of 100MW
Summary of issues in the tender
========
Procurement plan was not prepared for the tender tender treated as emergency procurement but advertised internationally
There was no cost estimates for the bid
The cost of administering the tender process was not adequately documented
No evidence that tender notices and bid documents were approved by the tender board
26 companies bought the tender documents but only 8 tendered
Bid opening was initially 13.03.2006 but was later extended to 20.03.2006 on request from some of the bidders
Time lapse between bid opening to contract award, 95 days
Bid validity was up to 19 May 2006, 60 days from the bid submission day
There was no request to extend bid validity, contract was signed 23 June 2006 35days after bid valid deadline
Evaluation team was not appointed by CEO but by TB
Personal covenant forms/bid declaration forms were not signed by evaluation personnel
12 members were appointed by the TB to carry out evaluation for the submitted tenders
The bid evaluation process was not done strictly following the criteria that were stated in the bid documents e.g. bid security requirement was waived, revision of weighted scores to 60% technical and 40% commercial. The evaluation was to be redone with the second one with substantial flexing of the evaluation criteria
Tender Board does not act very independently, several interferences from the Tanesco Board of Directors
Tanesco cancelled the tender since all the 8 firms were not responsible to the terms of reference and the government was already interfering with the procedures
Ministry of Energy and Minerals recalled bid documents submitted by all the 8 bidders from Tanesco so that it processed them itself the process which eventually came up with Richmond Development Company LLC. The Tanesco evaluation process, before it was abandoned, had indicated Renco SPA of Italy and Real Energy of UK as more relatively responsive to the bid requirements than Richmond Development Company LLC respectively.
Negotiations with Richmond was carried out under a Government Negotiation Team, which was appointed by the ministry
Tanesco Board was ordered by the Ministry of Energy and Minerals to sign the contract despite Tanesco initial resistance especially after the process that brought the winner was handled outside Tanesco procurement process
Contract between Tanesco and Richmond Development Company was signed in strange circumstances, at night and at the ministry of Minerals and Energy with some contractual issues protecting the client having been ignored as there was no room for Tanesco to review the draft contract (the Company Secretary does not know who drafted the contract) e.g. No performance bond, etc. the power rental agreement is for two years at $0.0499/kwh of 100MW i.e. the capacity price is 34.60565 US$ per KW per month, calculated as, 0.0499 (US$/kWh)x24(hrs)x365(days) x 95% (availability factor)/ month
Contract between RDC and Tanesco did not provide for re-assignment of the contract to Dowans but subcontracting arrangement however political influence forced Tanesco to waiver from principles of the contract
Indemnification agreement was reached requiring Dowans Holdings SA to take all liabilities of Richmond Development Company LLC
Since Richmond failed to honour the agreement, liquidated damages started to apply beginning 2nd February 2007 at US$ 10,000 per day, the official commercial operating date (150 days since the letter of Credit was issued). There is no agreement between the parties as to how the amount would be claimed from Dowans Holdings.
Performance guarantee was withdrawn from the requirements list by the Government during the negotiation period with Richmond Development Company LLC against Tanesco wishes of having it stay.
Advance payment of US$ 15million has already been paid to Dowans and all the plants to generate 100MW have already arrived and are now in the process of being installed at Ubungo.
There are proposals now that the power plants be sold to the Government after the 2 year lease period
Tender
PC/10/2006 for Emergency Power Supply from rental Gas Based Generating Plant of 100MW
Summary of issues in the tender
========
Procurement plan was not prepared for the tender tender treated as emergency procurement but advertised internationally
There was no cost estimates for the bid
The cost of administering the tender process was not adequately documented
No evidence that tender notices and bid documents were approved by the tender board
26 companies bought the tender documents but only 8 tendered
Bid opening was initially 13.03.2006 but was later extended to 20.03.2006 on request from some of the bidders
Time lapse between bid opening to contract award, 95 days
Bid validity was up to 19 May 2006, 60 days from the bid submission day
There was no request to extend bid validity, contract was signed 23 June 2006 35days after bid valid deadline
Evaluation team was not appointed by CEO but by TB
Personal covenant forms/bid declaration forms were not signed by evaluation personnel
12 members were appointed by the TB to carry out evaluation for the submitted tenders
The bid evaluation process was not done strictly following the criteria that were stated in the bid documents e.g. bid security requirement was waived, revision of weighted scores to 60% technical and 40% commercial. The evaluation was to be redone with the second one with substantial flexing of the evaluation criteria
Tender Board does not act very independently, several interferences from the Tanesco Board of Directors
Tanesco cancelled the tender since all the 8 firms were not responsible to the terms of reference and the government was already interfering with the procedures
Ministry of Energy and Minerals recalled bid documents submitted by all the 8 bidders from Tanesco so that it processed them itself the process which eventually came up with Richmond Development Company LLC. The Tanesco evaluation process, before it was abandoned, had indicated Renco SPA of Italy and Real Energy of UK as more relatively responsive to the bid requirements than Richmond Development Company LLC respectively.
Negotiations with Richmond was carried out under a Government Negotiation Team, which was appointed by the ministry
Tanesco Board was ordered by the Ministry of Energy and Minerals to sign the contract despite Tanesco initial resistance especially after the process that brought the winner was handled outside Tanesco procurement process
Contract between Tanesco and Richmond Development Company was signed in strange circumstances, at night and at the ministry of Minerals and Energy with some contractual issues protecting the client having been ignored as there was no room for Tanesco to review the draft contract (the Company Secretary does not know who drafted the contract) e.g. No performance bond, etc. the power rental agreement is for two years at $0.0499/kwh of 100MW i.e. the capacity price is 34.60565 US$ per KW per month, calculated as, 0.0499 (US$/kWh)x24(hrs)x365(days) x 95% (availability factor)/ month
Contract between RDC and Tanesco did not provide for re-assignment of the contract to Dowans but subcontracting arrangement however political influence forced Tanesco to waiver from principles of the contract
Indemnification agreement was reached requiring Dowans Holdings SA to take all liabilities of Richmond Development Company LLC
Since Richmond failed to honour the agreement, liquidated damages started to apply beginning 2nd February 2007 at US$ 10,000 per day, the official commercial operating date (150 days since the letter of Credit was issued). There is no agreement between the parties as to how the amount would be claimed from Dowans Holdings.
Performance guarantee was withdrawn from the requirements list by the Government during the negotiation period with Richmond Development Company LLC against Tanesco wishes of having it stay.
Advance payment of US$ 15million has already been paid to Dowans and all the plants to generate 100MW have already arrived and are now in the process of being installed at Ubungo.
There are proposals now that the power plants be sold to the Government after the 2 year lease period