Flames over N$60m oil storage fire station tender
12 March 2021 | Others
The Central Procurement Board of Namibia's decision to award a N$60 million tender to a local joint venture (JV) - that was amongst the highest bidders - has been appealed.
The board last month awarded Pioneer Mechanical Contractors Namibia, which joined forces with Waldhem Construction and Installation CC, the tender to construct an external firefighting system at the oil storage facility in Walvis Bay.
The JV entity outscored six other bidders to land the contract. The estimated project cost was N$57.5 million.
The JV partners landed the contract despite being the second-highest bidders at N$59.6 million. The other bidders fell out because their paperwork was not in order.
Sources said some of the companies that bid lower amounts are not impressed with the outcome.
“These guys exceeded the projected estimated cost by N$2 million yet they get the award. The procurement board must explain to the other bidders and the public how this was allowed and the basis for such a decision,” the source said.
The Central Procurement Board of Namibia (CPBN) spokesperson Johanna Kambala yesterday confirmed the appeal. She refused to divulge more details regarding the entity which appealed and the reasons for the appeal.
According to the bid opening report dated 16 November 2020, only Pioneer and D Square Construction passed the first stage of the preliminary evaluation. The report also states that only Pioneer passed the legal admissibility evaluation.
Pioneer, the report notes, is the only bidder that passed the technical and financial evaluations.
Other factors that led to bidders falling away include pages in the bid documents not initialled, no power of attorney provided and failure to meet the requirement of having 30% of disadvantaged persons in the group.
Since the JV between China Harbour Engineering Company, the Roads Contractor Company and Babyface Civils was awarded the contract to build the national fuel depot at Walvis Bay in 2014, it is yet to be operationalized six years down the line and more than N$5 billion pumped into the project. The stated reasons relate to the depot's failure to meet international safety standards.
Namibian Sun understands several big players in the global oil industry refuse to make use of the facility if the required standards are not met.
Namcor initially budgeted N$57 million for the firefighting system at the depot. The bids ranged between N$46 million to N$59 million.
Namcor last year said the project will be funded by the National Energy Fund.
According to CPBN's report on the opening of bids for the tender, Namibia Construction was amongst the seven companies, whose bid at N$46.3 million was the lowest.
DME Namibia Solution submitted the highest bid with a bid price of N$59.6 million followed by the JV between Pioneer.
Other bids submitted include ETN Technical Services (N$58.6 million), D Square Trading Enterprises (N$47.8 million), Omahooli Solutions (N$51.2 million) and Teya Investment Number Eighteen (N$50 million).
The decision to favour local firms has been lauded by some who feel it will go a long way when it comes to empowering local entities. It has also been loathed by others who feel it might jeopardize the quality of the work done.
Critics have also questioned the expertise of some of the shortlisted companies, who have as as little as three years' experience in the capital and technical-intensive industry.
At the time of the bid opening, Namibia Construction, which boasts over 40 years in the construction industry, was touted as one of the favourites to land the job because of its experience in the industry. There have also been suggestions for the project to be given to the new players in the industry to give them the much-needed exposure.
Namcor boss Immanuel Mulunga last year said Namibia's oil storage facility's firefighting capabilities only cater for two hours.
Last year The Namibian quoted Mulunga saying: “In the event of a severe explosion, a continuous supply of water would be required, not just to control the fire, but also to keep the adjacent tanks cool at all times in order to prevent them from also exploding. Hence the need for this upgrade, which is really necessary to prevent a situation where the country's entire petroleum storage system goes up in flames.”