16 - MINISTRY OF LOCAL GOVERNMENT
AND OUTER ISLANDS
Mauritius Fire and Rescue Service
16.1
Supply, Testing and Commissioning of Articulated Turn Table Ladder
- Rs 35 million
16.1.1 Award of the Contract
Invitation of bids for the Supply, Testing and Commissioning of one Articulated 32 metres
Turn Table Ladder (TTL) was launched on 28 March 2011 through Open Advertised Bidding
with closing date on 11 May 2011. In accordance with the bid document, bidders were also
required to quote for maintenance charges for a period of five years after the warranty period
for the vehicle. The estimated cost of the vehicle was Rs 40 million.
On 10 August 2011, the Bid Evaluation Committee recommended that the contract be
awarded to the best evaluated and complying bidder for the Supply, Testing and
Commissioning of one Man Metz, Articulated 32 metres TTL, TGM 18.20 (L32 A) with
engine capacity of 6,871 cc, for the sum of Rs 38,118,360 and the maintenance for the seven
years of operation at Rs 2,244,432 with defined terms and conditions.
On 13 October 2011, the contract was awarded for the sum of Rs 38,118,360 for the purchase
of the vehicle only, excluding maintenance. The agreement was signed on 8 November 2011.
Delivery was to be effected within 365 days following award of contract. However, a month
later, on 11 November 2011, the Supplier informed that the contract for the Maintenance
Charges as stipulated on Part B of its Bid Summary Sheet was not awarded and it would not
be committed towards the Mauritius Fire and Rescue Service (MFRS) concerning this issue.
The Bid Summary Sheet was split into three parts as in Table 16-1.
Table 16-1 Details of Bid Summary Sheet
Part
A
Details
Supply, Testing and Commissioning
Including first certification
Year 1 and Year 2- warranty
period- Free
B
Maintenance Charges
Training
Total quoted price
-
Year 3 – including 2nd
Certification
400,200
Year 4
433,320
Year 5 to Year 7 – (Rs
470,304 per year)
C
Amount
Rs
38,118,360
Sub-total
Free
231
1,410,912
2,244,432
40,362,792
16.1.2 Pre-delivery Inspection
According to the contract, the Pre-Delivery Inspection (PDI) was to be carried out at the
completion stage on the premises of the manufacturer in Germany, which was scheduled for
the period 22 to 31 July 2012. However, it was on 5 to 7 November 2012, three months later,
that the PDI was attended to.
16.1.3 Revision of the Agreed Contract Price
One year after the signature of the agreement, following a meeting held on 10 October 2012,
it was decided to re-negotiate the contract price of the vehicle. The bid price was considered
to be on the high side as compared to that of the second lowest bidder of Rs 31.4 million. The
Supplier agreed to revise the contract price for a fixed sum of Rs 35 million on the condition
that no liquidated damage would be imposed on the Supplier and no storage fee would be
claimed to the MFRS. A new agreement was drawn on 11 January 2013. The vehicle was
delivered and commissioned on 14 January 2013, with warranty period of two years. In
January 2013, the contract sum of Rs 35 million was paid to the Supplier.
16.1.4 Approval of the Project Plan Committee
Contrary to the Investment Project Process Manual (IPPM), no approval was sought from the
Project Plan Committee (PPC) of the Ministry of Public Infrastructure (MPI) for the Supply,
Testing and Commissioning of the vehicle, whose value was above Rs 25 million.
The vehicle was delivered with a delay of three months, that is on 14 January 2013, instead of
12 October 2012 as per contract.
16.1.5 Maintenance Charges
The offer price comprised the maintenance for a period of five years operation after the two
year warranty period for the sum of Rs 2,244,432 which was within the estimated costs.
Despite, the recommendation of the BEC, there was no agreement for the maintenance of the
vehicle with the Supplier.
16.1.6 Deficiency of the Ladder
After the end of the two year warranty period, on 10 February 2015, while starting the ladder
drill operation, the jacking system control panel was neither responding nor functioning. The
Supplier was informed of the deficiency on the same day.
As per the bid document, the warranty period ended on 13 January 2015 while the first
Certification would lapse on 13 January 2016.
According to the Supplier, the certification of the vehicle had expired on 14 January 2015. In
the absence of any certification of the vehicle, the Supplier refused to carry out the necessary
repairs.
As of 31 May 2015, the clarifications on the end of the first certification period had not yet
been obtained from the Supplier. Necessary repairs had not yet been carried out and the
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vehicle had remained off the run since February 2015, for nearly four months at the
Coromandel Fire Station.
16.1.7 Advice from Attorney General’s Office
On 2 February 2015, the advice of the Attorney General’s Office (AGO) was sought. On
9 February 2015, AGO pointed out that the status of the certification was not clear, and hence
the Supplier might be in breach of contract or needful should be done for the certification to
be reinstated within a set of reasonable delay or to consider terminating the contract.
On 23 February 2015, the Supplier reiterated that the certification could not be reinstated.
The MFRS should request for a certification to be effected upon payment of the required
charge.
Recommendations
MFRS should ensure that the requirements of all relevant legal frameworks be complied with,
before finalizing any procurement exercise.
The importance of the maintenance of the vehicle should be assessed and a prompt decision
be taken for carrying out the necessary repairs in order to avoid the vehicle from being left
unutilised for long.
MFRS’s Reply
The Parent Ministry initiated this project and necessary funds were made available.
The Pre-Delivery Inspection was delayed due to administrative procedures with the Parent
Ministry.
As the maintenance of the Vehicle was to occur in two years time after warranty, it was
considered to take it in due course of time. On 16 February 2015, the Supplier refused to
enter a contract based on maintenance fees proposed at the time of its bid.
16.2 Airport Crash and Fire Fighting Vehicle - Rs 15.7 million
On 17 June 2013, One Mercedes Benz Actros Fire Fighting vehicle, fitted with 11,946 cc
diesel engine was acquired by Outer Islands Development Corporation (OIDC), operating
under the aegis of the Ministry of Local Government and Outer Islands (MOLG), for the sum
of Rs 15.7 million inclusive of VAT from a local Supplier. The Airport Crash and Fire
Fighting vehicle was initially acquired for use at Agalega Island.
The vehicle was registered on 2 July 2013 in the name of OIDC. On 2 December 2013,
MOLG decided to transfer the vehicle to the MFRS on a temporary basis. The vehicle had
remained in the custody of the Supplier from 17 June 2013 to 15 January 2014, for some
seven months.
On 16 January 2014, the Fire Fighting Vehicle was transferred to MFRS pending its shipment
to Agalega. On 12 February 2014, one month later, the vehicle was sent to the Supplier for
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repairs as the bolts of propeller shaft, the mounted pump propeller shaft and the delivery
clamp were found to be rusted and corroded and there was leakage of air while in operation.
Two months later, on 16 April 2014, after repairs, the vehicle was returned to the MFRS.
However, after eight months use by the MFRS, on 23 December 2014, the vehicle was again
sent to the Supplier, in connection with pump accelerator defects and oil light indicator
showing ‘On’ permanently. The vehicle had remained at the Supplier’s workshop for repairs
for seven months.
On 9 April 2015, according to the Supplier, several difficulties were encountered to diagnose
the defects on the vehicle and the expertise of the Engineer of the overseas Supplier was
required.
As of 31 May 2015, the vehicle was still under repairs at the Supplier’s workshop and had
remained unutilised for nearly 14 months from the time of its acquisition. The period of
transfer to the MFRS was not defined.
The acquisition was made to fight air crash. However, the Agalega Island did not have a
proper airstrip and rarely do airplanes land there. Besides, there was no fire station in the
Island. Therefore, the acquisition could be considered as an unnecessary expenditure, as
nearly two years after its acquisition, it had not yet been shipped to Agalega.
Acquisition should be properly planned and public funds judiciously used.
MFRS’s Reply
In December 2013, the Parent Ministry entrusted the vehicle upon the responsibility of the
Department. It is the Outer Islands Development Corporation which has considered all
aspects prior to acquiring this vehicle.
The vehicle was still under warranty and the Supplier informed that an Expert from abroad
was being awaited imminently.
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MINISTRY OF LOCAL GOVERNMENT AND OUTER ISLANDS
Solid Waste Division
16.3 Mare Chicose Landfill
Background
The present system of solid waste disposal comprises a unique sanitary landfill at Mare
Chicose, which covered an area of 49.88 ha, and the construction of the last Cell 7 will
provide void space for landfilling of wastes till 2018-19. The Ministry has spent more than
Rs 4 billion for the creation, operation and maintenance of the landfill since 1997.
In 2014, some 450,000 tonnes of solid waste were collected over the island compared to
381,000 tonnes in 2004. This is expected to increase over the years, and the total amount of
waste requiring management and disposal will be around 472,500 tonnes in 2015.
As of January 2010, the landfill comprised six cells and covered a total area of 32 ha. To
ensure sufficiency and continuity in waste disposal capacity beyond 2011, additional
landfilling space was required for the extension of the landfill.
In April 2010, negotiation with the land owner was held for the lease of an additional plot of
land. The owner exceptionally agreed to lease out two final plots of land of an area of
14.84 ha and 4.3 ha in June 2012 and July 2013 respectively.
The contract for Consultancy Services for the Supervision, Management and Operation of the
Mare Chicose Landfill ended on 30 June 2011. The contract for the Operation, Management,
Construction of Cells, and Post Closure Management (the Second main contract of the
landfill), was awarded on 26 September 2006 for the sum of Rs 1.3 billion, inclusive of VAT,
for a period of 10 years in two distinct phases each, with a duration of five years as shown in
Table 16-2.
Table 16-2 Second Main Contract
Phase
Details
Period
I
Operation, Management
and Construction of Cells
Post closure management
1 December 2006 to 30 November 2011
1 December 2011 to 30 November 2016
II
In April 2010, as Cell 6 was nearing saturation, the Ministry decided to extend the existing
landfill to provide for additional waste disposal capacity beyond 2011 through the
construction of additional waste cells.
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16.3.1 Construction and Operation and Maintenance Contracts
Financing of the Project
The Project Plan Committee gave its approval for the extension of the Mare Chicose Landfill
through the construction of the new Cell 7. The total project cost for the extension of the
landfill was estimated at Rs 1.97 billion, comprising Rs 40 million for Consultancy Services
and Rs 1.93 billion for Construction works, Operation and Maintenance and Post Closure for
a period of 10 years in two phases. Expected duration of the project is shown in Table 16-3.
Table 16-3 Expected Duration of the Contract for Cell 7
Phase
Details
Duration
I
Operation, Management and Construction of Cells
Jan 2012 – Dec 2016
Post closure management
Jan 2017 – Dec 2021
II
Actual Costs Incurred for Consultancy, Constructions, Operation, and Maintenance and Post
Closure
Details of the Construction contract costs and consultancy fees incurred for the construction
of sub Cells and Cell 7 and Operation and Maintenance and Post Closure management are
given in Table 16-4.
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MINISTRY OF LOCAL GOVERNMENT AND OUTER ISLANDS
Table 16-4 Actual and Estimated Contract Costs, Consultancy Fees and Operation and
Maintenance and Post Closure Costs
Consultancy Services
Procurement Methods
Sub Cell 7
Sub Cell 7A
Cell 7
Direct procurement
Direct procurement
Request For Proposal
(RFP)
Sub -total
Amount (Rs)
(incl.VAT)
5,370,500
7,916,600
22,829,027
36,116,127
Construction Contracts
Sub Cell 7
Sub Cell 7A
Cell 7
Sub -total
Operation and Maintenance and Post
Closure Management for sub Cells
Dec 2011-May 2013
June 2013 – May 2014
Operation and Maintenance
Cell 7 and other Cells
Emergency procurement
Open Advertised Bidding
(OAB)
Restricted Bidding
120,814,486
84,781,289
Direct procurement
Emergency procurement
204,035,720
173,731,131
377,766,851
Restricted Bidding
following pre-qualification
exercise
Sub -total
Total Actual Costs
Estimated Costs
Consultancy Services
447,957,563
653,553,338
1,142,456,589
____________
1,520,223,440
2,209,892,905
40,000,000
Construction, Operation and Maintenance
and Post Closure
1,930,000,000
Total Estimated costs
1,970,000,000
Excess of Actual over Estimated costs
239,892,905
Source: Contract documents
The actual total costs for the Consultancy Services, Constructions of sub Cells and Cell 7
including the Operation, Maintenance and Post Closure amounted to some Rs 2.21 billion as
compared to the approved estimated cost of Rs 1.97 billion.
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MINISTRY OF LOCAL GOVERNMENT AND OUTER ISLANDS
16.3.2 Additional Landfilling Space Capacity
As a result of the significant time taken in finalizing the award of the main contract for the
extension of the landfill and the lease of the additional land, the Ministry had to create sub
Cells to provide void space for waste disposal.
Extension of Cell 6
Cell 6 was reaching saturation, and procedure for the lease of additional land was ongoing.
The extension of the Cell 6, through variation orders which was allowed under the main
contract, was awarded on 25 March 2010, to the existing Contractor and the existing
Consultant for the sum of Rs 112,787,746 and Rs 3,726,000 inclusive of VAT respectively to
meet landfilling space capacity up to April 2012 under the same terms and conditions. The
services of the Consultant were hired by the Ministry since 2008.
Construction of Sub-Cell 7
The Consultancy contract was awarded in September 2011 to the existing Consultant in order
to ensure continuity of the Consultancy Services for an amount of Rs 5.4 million inclusive of
VAT. The contract was awarded through direct procurement method, as the Consultant had
the necessary knowledge of the landfill site, the geotechnical conditions and required
minimum time to be mobilised. The contract for the construction of sub Cell 7 was awarded
to the existing Contractor on 6 October 2011 for the sum of Rs 120.8 million inclusive of
VAT, based on emergency procurement method without resorting to competitive tendering
procedures to provide landfilling space for a period of 10-12 months as from May 2012.
Construction of Sub Cell 7A
Contract for Consultancy Services for the construction of the Sub Cell 7A was awarded on
9 May 2012 to the existing Consultant for the sum of Rs 7.9 million inclusive of VAT,
through direct procurement method, for the same reason as stated in the contract for sub Cell
7. However, an open advertised bid was launched for the construction contract which would
provide additional landfilling space for one year as from February 2013. The existing
Contractor was the successful responsive bidder and the contract was awarded on
5 November 2012 for the sum of Rs 84.8 million inclusive of VAT.
16.3.3 Design and Construction of Cell 7 and Operation and Maintenance Contract
Consultancy Services
The tender procedures for the Consultancy services started on 15 September 2010. The
contract was initially awarded on 3 June 2011. Due to challenge filed against the Ministry
and appeal lodged before the Independent Review Panel (IRP), a second bidding exercise was
carried out. The contract was finally awarded on 17 December 2012 for the sum of some
Rs 22.8 million inclusive of VAT to the aggrieved bidder who was found to be the lowest and
substantially responsive bidder. The contract was awarded some 18 months after the initial
award.
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Construction, Operation and Maintenance Contract for Cell 7
On 26 December 2013, 28 months after the pre-qualification exercise carried out on
15 August 2011, the bid was finalized. The contract for the Construction of Cell 7 and
Operation and Maintenance of Cells at Mare Chicose Landfill site which was the third main
contract of the landfill, was awarded to the Contractor for the sum of Rs 1,590,414,152
inclusive of VAT for duration of five years, but excluding the Post Closure Management
phase. Details of the contract are shown in Table 16-5.
Table 16-5 Third Main Contract
Details
Expected Duration
Construction Works
Phase I - Construction of a bund
and a leachate monitoring well
Phase II - Construction of
remaining part of Cell 7
Operation and Maintenance of Cells
180 days –January to June 2014
545 days –January 2014 to July 2015
1638 days as from June 2014 to December 2018
The contract sum for the construction of Cell 7 was Rs 447,957,563. The construction works
of Phase I started in January, and were completed in September 2014.
Tenders were launched to the two pre-selected bidders through restricted bidding method
because of the urgency to ensure timely provision of new landfill space.
According to the Central Procurement Board, after a period of more than 20 months, new
potential bidders might be interested to participate in the procurement process and
recommended that a fresh pre-qualification process be initiated. However, the Ministry
decided to proceed with the procurement process on the basis of the pre-qualification exercise
concluded in December 2011.
16.3.4 Operation and Maintenance and Post Closure Management contracts
The Contract for Operation and Maintenance of Cells, Phase I of the second main contract, of
the Landfill expired in November 2011. It was subsequently extended by means of variation
orders on three occasions with the existing Contractor for the Operation and Maintenance of
sub Cells for a period of 17 months as from December 2011 to May 2013, and the sum
disbursed was some Rs 204 million.
Further, in April 2013, the contract for the Operation and Maintenance and Post Closure
Management of the sub Cells was awarded to the existing Contractor for a sum of
Rs 173.7 million on an emergency basis without resorting to competitive bidding.
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Conclusion
In view of the rapid increase in the volume of solid waste collection and the reduction in void
space available in respect of Cell 6, the construction of the new Cell should have been timely
planned. Initially, the contract for the construction of the new Cell 7 should have been
awarded by November 2011 and completed by July 2012.
The actual total costs for the extension of the landfill had exceeded the estimated contract
costs by some Rs 240 million, representing 12 per cent of the estimated cost. Due to the
urgency for providing space capacity for waste disposal, contracts totalling some
Rs 512 million were awarded to Consultants and Contractors through direct and emergency
procurement methods without resorting to competitive bidding procedures.
Owing to procedural problems, the award of the Consultancy services for the construction of
Cell 7 was awarded to the successful bidder, some 18 months after the initial award. The
Ministry had to construct sub Cells in order to ensure the sufficiency and continuity in waste
disposal capacity.
The construction contract for Cell 7 was awarded after more than two years of the intended
period of November 2011. Contrary to the approved scope of the project, the total estimated
costs of Rs 1.97 billion for duration of 10 years included the Post Closure Management Phase
which was excluded in the third main Contract. The contract was awarded for a duration of
five years. Consequently, a new contract will have to be awarded for the Post closure
Management Phase for the next five years with additional costs which would exceed the
approved total estimated costs by more than Rs 240 million.
The same Consultant was awarded Consultancy contracts for some Rs 39 million for the
constructions of sub Cells 6, 7A, 7 and Cell 7 since 2008, of which some Rs 13.3 million
were awarded through direct procurement. The same Contractor was awarded contract
amounting to some Rs 120.8 million on a fast track basis, through emergency procurement.
Additional costs were incurred for the Operation and Maintenance of the sub Cells and an
amount of some Rs 377 million was paid to the existing Contractor from December 2011 to
April 2013 through extension of the contract and emergency procurement method and
without competition.
Recommendations
Based on experiences gathered during the construction of Cells and Operation and
Maintenance of the landfill in respect of previous contracts, the project implementation
should be properly planned and monitored closely. Tenders should be launched well in
advance to ensure the timely completion of the project.
Regular and timely feedback should be obtained from the Consultant to ensure proper
management of landfill space capacity.
In view of the fact that management of the landfill involves huge investment, the Ministry
should ensure that proper competitive bidding procedures are followed so that contracts are
awarded at the most competitive prices. The timely award of contracts also means that
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additional costs could be minimized in terms of escalation costs and increase in foreign
exchange rates.
The existing landfill will be saturated within the next five years and no extension of the
landfill will be possible. The Ministry should start procedure for the creation of another
landfill site, and to ensure that proper tendering procedures are followed and disposal waste
capacity is available. It should also ascertain that value for money is obtained.
Ministry’s Reply
The construction of sub-Cells had not only impacted on the contract value but also resulted in
a longer lifespan of the landfill. Initially, it was expected to provide landfilling space up to
2017 through the construction of Cell 7, but ultimately, landfilling capacity would now be
available up to end 2018.
The Ministry had no alternative than to resort to direct procurement in order to avoid
disruption in waste disposal services. It could not afford to spend time on seeking other
tenders and running the risk of having no landfilling space available as from May 2012.
The extension of Cell 6 was warranted in view of the discrepancy that existed between
quantities in the Bills of Quantities and the lay-out plans in the tender documents, and also
additional landfill space was required.
The delay in concluding the award of the Consultancy Contract was due to challenge by one
unsatisfied bidder, which resulted in a re-evaluation of the bids, the subsequent cancellation
of the bid exercise and launching of fresh tenders for Consultancy Services.
It was decided not to call for a new pre-qualification exercise but to pursue the procurement
process on the basis of the pre-qualification exercise concluded in December 2011. This
decision was taken to avoid a situation whereby precious time could be lost again in
challenges and appeals, and there could have been no void space available for landfilling. In
view of the national importance of the project, Government was continuously briefed at all
the different stages in the tender procedures for the construction of Cell 7.
Since time was of essence to provide waste disposal capacity, the Ministry had no alternative
left than to solicit the services of the serving Consultant.
The landfill would reach saturation in 2018/2019, and land identification procedures have
started since almost three years but have not yet been concluded. The Current Consultancy
contract will expire in January 2016, and a new Expression of Interest for Consultancy
Services is currently being evaluated by the Ministry.
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