Tender for LNG project: SSGCL describes TI Pakistan assertion as 'misleading' & 'flawed'

And now it is Sui Southern Gas Company Ltd (SSGCL) versus Transparency International Pakistan. Responding to a news item published in Business Recorder, based on a letter written by TI-Pakistan to SSGCL recommending discharge of SSGCL tender, SSGCL has described it as "misleading" and "flawed" primarily because "Transparency International Pakistan seems to have confused the LNG Retro Project, a two-stage bidding process under PPRA Rule 36 (c), with the LNG Integrated Project.
SSGCL countered the allegations made by Transparency International Pakistan in the news item as under: At the onset, let us be very clear that PPRA Rules 2004 do not put any limit on a number of bids received in response to tender notices. Contrary to Transparency International Pakistan's assertion that the tender for LNG project be discharged since only a single bidder emerged, it must be understood that a single bid may be considered if it meets the evaluation criteria expressed in tender notice and is not in conflict with any other rules, regulations or Federal Government's policy. When a procuring agency is confronted with such a situation, it then makes a prudent decision, taking the following factors into consideration:
a) Comparison of price of the goods, workers or services if procured during the current financial year.
b) Market prices of the goods, works and services to be procured.
c) In case abnormal increase in prices is observed, the procuring agency may like to re-advertise the tender process.
In view of the above, the pricing offered by the bidder can be benchmarked for pricing parity against available data which is researched by SSGC and advised by independent LNG advisors. Transparency International Pakistan's contention that the project be re-tendered shows lack of understanding of the PPRA requirements.
Project Awarding period: It must be noted here that PPRA requires a minimum of 30 days for international tendering. In the news item, Transparency International Pakistan was quoted as suggesting completing the entire process from invitation of bids to award of contract in mere 39 days. Considering that LNG projects are complex and require extra time in putting together a comprehensive technical and commercial proposal, Transparency International Pakistan's recommendation for setting up the terminal in such a quick time is technically and legally inconceivable.
Bid Security: On the issue of bid security raised by Transparency International Pakistan, SSGC would also like to clarify that no bid security was required from bidders in first stage when only technical proposals were invited. However for the second stage, the bid security of US $500,000 and not US $1,000,000, as conceived by Transparency International Pakistan, is due from technically qualified bidders.
Validity period: The bids in the second stage with commercial proposal were received on December 21, 2012 with 120 days validity (and not 60 days as mentioned in the news item) and subsequently extended up to 120 days, which is in compliance with PPRA Rule 26 (3).
Pakistan has been struggling to set up LNG import terminal since 2005. The economic cost of delay in importing LNG is doing little to ease the prevailing energy crisis. SSGC hopes that the stakeholders will show greater responsibility in sharing information but before they do so, they must verify the project details with the procuring agency so that the public gets the right picture.
Adviser, TI-Pakistan, Syed Adil Gilani when asked to comment on SSGCL's rebuttal said: "The Company stands on a slippery ground." It should be known to them that Public Procurement Rules do not allow any single bid to be awarded. ECC on January 30, 2013 had rejected SSGCL LNG import tender because only one bid was responsive out of the three and had ordered SSGCL to re-tender it.
The consultant of SSGCL Phil Nutnan in March 2013 had informed SSGCL that the two bidders were non-responsive. SSGCL and the consultant had changed the criteria and had qualified M/s. Fourgas Asia. Consultant in the same e-mail had advised SSGCL to discharge the tender and restart bidding process with Request For Proposal (RFP) on new terms. Keeping the above in view, Adil Gilani said that he stood firmly on whatever had been written by TI-Pakistan to SSGCL. Detailed letter would be sent to the Company shortly in this respect, he said.