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AVIC bids for $21m project, but gets govt offer at $25mBy Sipilisiwe Ncube on 19 Jun 2019
A National Pension Scheme Authority (NAPSA) evaluation committee for the Twin Palm proposed River View Park Infrastructure Development project has recommended the awarding of a construction tender to AVIC International Zambia Limited at a bid sum of US$25.8 million against the construction company’s willingness to do the work for US$21.63 million.
The evaluation committee stated that the extra US$4 million is meant to cater for “contingencies and cost escalations” as well as “Value Added Tax (VAT)”.
NAPSA announced its intentions to carry out construction works of various infrastructure development -Phase 1, which comprised network of roads and bridgeworks, external sewer reticulation and construction of sewer ponds, external water reticulation with overhead storage tanks and external electrical reticulation with associated main and subsidiary substations, all covering 2,098,123 square metres.
“NAPSA has set aside an investment fund for this purpose, and now intends to apply part of the funds to cover eligible payments under the contract for tender for the proposed River View Park Infrastructure Development at the NAPSA Twin Palm Land, East of Lusaka, in Lusaka Province of Zambia. At its 10th meeting held on 22nd March, 2019, the Management Procurement Committee (MPC) approved the following shortlisted contractors to participate in the tender for the proposed River View Park Infrastructure Development Phase 1 through Limited Bidding; (i) China Henan International Cooperation Group Company Ltd; (ii) China-Geo Engineering Corporation Ltd; (iii) WBHO Construction Zambia Ltd; (iv) UNIK Construction Ltd; (v) China Railways Seventh Group Zambia Ltd; (vi) China State Construction Engineering Corporation Ltd; (vii) Estim Construction Zambia Ltd; (viii) Liege Africa Zambia Ltd; (ix) Phenix Construction (SA) Ltd; (x) Steffanutti Stocks Construction Zambia Ltd); (xi) China Jiangxi; and (xii) Avic International.”
The report stated that during the pre-bid meeting, which was held on April 16, 2019, some bidders complained that the tender was complex and that they had not received the drawings, further stating that the floating period was inadequate for them to submit the bids.
According to the bids submitted to NAPSA, the highest bidder was Stefanutti Construction with total bid sum of US $31,812,576.68 followed by China Jiangxi Corporation at US $29,427,713.52, and Etim Construction at US $25,498,708.58, while Avic International was the second lowest bidder at US $21,633,723.00.
The report stated that the bids were subjected to three evaluation stages namely preliminary, technical and commercial stages, and that Avic International eventually triumphed as the number one bidder at the end of the process.
On June 5, 2019, Mwitumwa and Associates Quantity Surveyors made an assessment that, following a comparison of the builder’s works value, AVIC’s bid was unrealistic and recommended that a consideration is made in favour of either UNIK Construction Ltd.
“The entire scope of the works in the bid is that of infrastructure in nature, requiring a high volume of heavy duty plant and equipment whose maintenance and operational costs will demand a high level of financial resources in order to sustain performance of works activities as programmed… It is therefore evident that the Preliminaries costs quoted by Bidder 1 – AVIC are too low to reflect efficient performance levels expected to deliver this investment development timeously and without contractual difficulties, which could necessitate or trigger contract claims,” stated David Mwitumwa on behalf of the quantity surveyor.
“In Table 1 – Comparison of Builder’s Works Value, is reflected the offered Contract period of 638 Calendar days for Bidder 1 – AVIC and Bidder 7 – China Henan, whereas Bidder 4 – UNIK offered an alternative completion period of 608 calendar days. The Bidding Documents had requested for this alternative offer for the completion period, if the bidder deemed it appropriate. The alternative completion period if considered would in our considered professional opinion, yield financial advantages to the client. As an investment development, we consider time to be of the essence and therefore offers of an alternative shorter completion period, will always enhance early realisation of revenue returns or inflows through saleable assets. In this regard therefore, UNIK’s offer of an alternative shorter completion period in comparison to Bidder 1 – AVIC and Bidder 7 – China Henan, should develop potential interest with the client in order to capture the envisaged advantages.
But the committee recommended that the tender be awarded to Avic International at a contract sum of $25,707,782.26, against the bidder’s original sum of $21,633,723.00.
“It is hereby recommended that the tender for the proposed River View Park Infrastructure Development Phase 1 at the National Pensions Scheme Authority (NAPSA) Twin Palm Land, East of Lusaka be awarded to Avic International Zambia Limited at the corrected bid sum of US $25,707,782.26, inclusive of contingencies and cost escalations and VAT, with a completion period of 638 calendar days being the best-evaluated bidder subject to (a) the bidder submitting the construction method for the bridge; and (b) the bidder submitting the construction schedule for the bridge,” narrated the report.
“Avic International Zambia Limited indicated in their bid that they will import the construction materials from China. Therefore, it will be imperative for the project managers to monitor and ensure that all the materials imported from China meet the stated specifications and standards should they be awarded the contract. Further, Avic International Zambia Limited pegged their preliminary and general (P and Gs) at 4 per cent. The 4 per cent seems to be on the lower side to successfully run the fleet of heavy equipment proposed in this tender. There is a risk that the contractor may have challenges servicing and maintaining the proposed heavy equipment. Conversely, the tender assumed full mobilisation (a situation where the awarded bidder out rightly purchases all the proposed pieces of equipment). Since Avic International Zambia Limited has got projects in Zambia, they will save by using their existing machinery.”
The evaluation committee members included: NAPSA IT manager Mukuka Kangwa; director projects Philip Muyumbana; civil engineer Mainza Banda; finance manager Owen Chimpinde; procurement manager for Capital and Contracts Ethel Mwanaumo; head real estate Butete Kaliye; head-risk and assurance John Chundu; legal officer on secondment M’fanyana Madima; Consultant-Afritec Management Anderson Stockil; Consultant-Afritec Management Prince Munanko; Consultant-Rankin Engineering Muhammed Pandor; Consultant – Mwitumwa & Associates David Mwitumwa and Procurement Officer – Operations Kumesa Kauta.
About Sipilisiwe Ncube
Sipilisiwe Ncube has a background in radio news.
Email: sipilisiwe [at] diggers [dot] news
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