ISLAMABAD: The procurement of six turbine generators worth Rs10 billion, as part of the Mangla Refurbishment Project (MRP), is likely to be delayed further while the Water and Power Development Authority (Wapda) tries to determine whether the firm with the lowest bid is, in fact, eligible to be awarded the contract.

French firm Alstom Hydro had the winning bid for the project, but confusion over the firm`s links to a company that was recently indicted for bribery and falsification of records by a US court is holding up the process of award of contract.

In Nov 2015, a federal judge in the state of Connecticut had sentenced a French industrial company called Alstom SA to pay a $772.3 million fine, said to be the largest levied by the US government in a foreign bribery case.

Following the decision, Wapda was in a fix over how to award the contract to Alstom Hydro France, even though it was not specifically mentioned in the US court case. The authority`s legal advisers, however, have advised it toascertain whether this company is, in fact, a subsidiary of Alstom SA, the company which was penalised by the US court.

Wapda`s legal advisers have suggested that the authority could not award the project to any firm that has been debarred, blacklisted or sanctioned by the Public Procurement Regulatory Authority (PPRA) and other international agencies and departments of the US, World Bank, Asian Development Bank, European Bank for Reconstruction and Development, African Development BankandInter-AmericanDevelopment Bank.

Reportedly, four firms had submitted bids for the project in September 2015 including Alstom Hydro France, Voith Hydro Germany, Andritz Hydro Austria and OJSC Power Machines Russia. As the Russian firm did not submit bid security along with its bid, it was considered non-responsive, leaving the three others to compete for the USAID and Wapda-funded project.

In a letter to Wapda Director (Legal) Shahzad A Sheikh, the law firm of Saad Rasool & Associates cites clause 59.1 of the contract, mentioning that `a bidder is prohibited from being awarded a contract if it is a subsidiary of a parent company that is debarred, blacklisted, or otherwise sanctioned`.

The letter, seen by Dawn, said: `The company cannot be awarded the contract for the project if it is clearly established that the company mentioned in the press release [of the US court] is in fact the parent company of [Alstom].

Blacklisted company? According to a Reuters report on the US court case, Alstom SA had pleaded guilty after a probe where investigators found it paid more than $75 million in bribes over a decade to win contracts worth $4 billion in countries such as Egypt, Indonesia, Saudi Arabia and Taiwan.

In 2012, the Wall Street Journal reported that World Bank had temporarily blacklisted and fined Alstom Hydro France and Alstom Network Schweiz, named as subsidiaries of the French engineering company Alstom SA, over bribery allegations in Zambia.

The debarment was lifted in Feb 2015. Accordingto a press release on Alstom`s official website, dated Feb 24, 2015, `As of 21 February 2015, Alstom Hydro France, Alstom Network Schweiz, and their affiliates are released from their World Bank debarment and are now free to resume competing for projects financed by the World Bank group and by other international institutions implementing cross debarment agreements with the World Bank.

Reportedly, the French firm had not mentioned any such litigation in its bid document, submitted in Sept 2015. Public Procurement Regulatory Authority (PPRA) Rules and a clause in the project contract are clear about such situations.

PPRA Rule 18 (that deals with the disqualification of suppliers and contractors)states: `The procuring agency shall disqualify a supplier or contractor if it finds, at any time, that the information submitted by him concerning his qualification as supplier or contractor was false and materially inaccurate or incomplete.

Wapda spokesperson Abid Rana declined to respond to specific queries in writing. `We cannot comment on the matter as the bids are currently being evaluated,` he said.

Wapda General Manager for Hydel Development Chaudhry Arshad, who is the head of the project committee, told Dawn that Alstom Hydro`s bid was being evaluated and if any discrepancy was committed by the firm, it would be checked during the evaluation process.

He admitted that the French firm had been blacle listed by the World Bank last year and was barred from participating in bidding for the same contract.

Later, he said, these sanctions were lifted, adding, `We only entertained the firm after the sanctions were removed`.

However, he expressed ignorance of the US court penalties imposed on Alstom SA, saying, `The decision of the US court came in November 2015, while the bids of participating firms were received in Sept 2015, therefore, the French firm was entertained.