Lutong makaw? COA finds bidding for Kaliwa Dam fishy as only China state firm qualifies
The Commission on Audit (COA) has expressed suspicion about the bidding for the P12.19-billion Kaliwa Dam project, as only one Chinese state firm that lacked a proven track record managed to qualify thanks to “seemingly intentional” errors by two other participants.
In a recent 7-page audit observation memorandum (AOM), the COA audit team led by Rency Meryl Marquez asked the Metropolitan Waterworks and Sewerage System (MWSS) to explain why “the criteria for competitiveness was not achieved.”
Auditors wanted an explanation from the MWSS technical working group (TWG) for accepting bidders “in spite [of] noncompliance with the vetting/prequalification requirements,” and said its officers should be “[held] responsible.”
The anomaly deprived the MWSS of the chance to choose from a pool of more competent and qualified companies and forced it to settle for the offer of the Chinese government-owned China Energy Engineering Corporation Limited (CEEC), the COA stressed.
It suspected that CEEC became the only qualified bidder because the other two nominees showed a “seemingly intentional purpose of the bidders not to comply” with the requirements of the TWG.
For the COA, extremely simple mistakes made by the two other contractors seemed to show that they were included in the selection process “merely to comply with the ‘at least three bidders requirement’” under the Government Procurement Reform Act.
The first contractor, Consortium of Guangdong Foreign Construction Company Limited-Guangdong Yuantian Engineering Co. (CGFCCL-GYEC), immediately failed for lacking the basic documentary requirements.
It lacked a Philippine Contractors Accreditation Board (PCAB) license and a Philippine Government Electronic Procurement System (PhilGEPS) platinum certificate, and had no valid Single Largest Completed Contract (SLCC) to attest to its track record.
Power Construction Corporation of China Limited (PCCCL) got eliminated at the second level of evaluation for a very puzzling screw-up—submitting a bid of P13.043 billion, which is 6.91 percent higher than the approved budget for the contract (ABC).
Auditors found this “surprising” especially since all three bidders were informed of the ABS and warned that excessive bids “shall be automatically rejected at bid opening.”
While CEEC was declared the only qualified bidder, auditors noted that all three did not even have the minimum of 20 years’ track record and experience in design and engineering, construction and commissioning of dam and tunneling works.
CEEC and CGFCCL-GYEC listed several projects including hydro-electric projects, but both did not state the dates of completion. PCCCL, meanwhile, listed projects that were only completed between 2010 and 2016.
“Notwithstanding these noted material deficiencies, the TWG still concurred and recommended to the MWSS Board that these contractors have passed the minimum technical requirements,” the auditors said.
The Notice of Award was already issued to CEEC on December 11, 2018. But, the Notice to Proceed remains pending while the company applies for an Environmental Compliance Certification (ECC) and secures a letter of guarantee from the Bangko Sentral ng Pilipinas (BSP).
Yet, auditors said the project manager informed them that CEEC already deployed “some technical equipment and construction assets in the project site” and conducted “preliminary construction activities including topographic and geologic surveys.”
The COA said the MWSS should ensure CEEC’s strict compliance with the contract agreement “before the conduct of any preliminary activities.”
It also stressed that MWSS should not incur any liability yet because the loan agreement with Export-Import Bank of China (Eximbank) was not yet effective pending the submission of required documents.
The Duterte administration touted the Kaliwa Dam project in Rizal as the solution to Metro Manila’s water shortage problem after the Angat Dam in Bulacan reached critical water level earlier this year.
However, Kaliwa Dam faces stiff opposition for drowning a biologically critical area and displacing indigenous peoples without securing their free, prior and informed consent (FPIC).
President Duterte had consistently embraced a blatantly pro-China policy.