DPDC Procurement Project: ‘Discriminatory’ condition to cost it addl Tk 270 cr

A ‘discriminatory’ condition in a procurement process will cost Dhaka Power Distribution Company (DPDC) an additional amount of Tk 270 crore if it picks the lowest bidder for the job.

As per the condition, if the lowest bidder is a foreign firm, DPCC will pay the customs duty and VAT while in case of the local firm, those will be paid by the company itself.

According to official sources at the Power Division, the issue came to their notice following the submission of a complaint by a representative of a local company on January 23.  

One Jamal Uddin of the local company made the complaint in a letter submitted to the Power Division seeking ‘justice’ over a DPDC tender for “Design, Supply, Construction, Testing & Commissioning Of 11 KV New Distribution Line, including Underground Distribution System & Renovation Of Existing 11 KV Distribution Line On Turnkey Basis”.

Through the tender, the DPDC is supposed to procure different materials, including transformers, cables, electric poles, hardware, insulators, fuse cutouts and lighting arrests, and carry out civil work.

Electrical equipment will also be procured for refurbishing the underground distribution system and the existing 1kV distribution line along with a new 1kV distribution line.

In the letter, it was complained that DPDC has allowed a Chinese company, which was initially disqualified technically, to submit its financial offer at the final level bid submission.

When its financial offer is opened, it was found that the company became the lowest bidder with its offer of Tk 924.36 crore while a local company became the second lowest bidder offering Tk 992.18 crore.

“If DPDC now awards the contract to the Chinese company, ultimate total price will be approximately 1,261 crore, including taxes, and if they go for the offer of the Bangladeshi company, the total cost will be Tk 992 crore, including taxes. It means DPDC can save approximately Tk 270 crore,” said the complaint.

If the local company’s offer is accepted, the customs duty and VAT will be paid by it as per the tender condition, claimed the representative of the local company in his letter.

It was further mentioned in the letter that the main reason behind the lower price offered by the Chinese company is that it would supply materials from China instead of Europe/USA/Australia as per the tender requirements.

According to tender conditions, cable jointing kits, termination kits and MCCB, as mentioned in Technical Specification Country of Origin should be of UK/USA/ Germany/France/Switzerland/Sweden/Canada/Japan.

Contacted, DPDC Managing Director Bikash Dewan denied such allegation and claimed that his organisation has invited the tender to procure the goods following the public procurement rules (PPR) of the government which is applicable for all the government entities.

About the disqualification of the Chinese firm at the technical stage, he said the technical evaluation committee first wrongfully disqualified it. “But the DPDC board found it qualified which was also later agreed by the tender evaluation committee,” he told UNB.

Bikash Dewan also claimed that the tender process was followed transparently and no unfair practice was made in the evaluation process.