THE GOVERNMENT’S plans for ensuring continuous water supply independent of weather conditions has been dealt a blow after the Tenders Review Authority (TRA) cancelled the contract to build a desalination plant in Limassol.
The Agriculture Ministry’s Water Development Department (WDD) had hoped to have the plant up and running by June 2010, but the latest decision by the TRA could set the whole process back by months or even years. Not only was the contract to the lowest bidder cancelled, but any new decision to award the contract again will almost certainly result in a new wave of legal challenges by other companies that submitted tenders for the same project.
Principal Water Engineer at the WDD Sophoclis Aletraris yesterday acknowledged that the majority decision of the TRA left Cyprus in the lurch regarding when it would get its Limassol desalination plant.
“Where does that leave us? It leaves us without a desalination plant. It is a very serious issue which will have to be discussed with the Attorney-general,” he said.
Following the recent drought in Cyprus, the government made it a priority to become independent of the weather and cover the water needs of the Republic through more desalination plants as well as water cuts where necessary.
The permanent desalination plant in Limassol at Episkopi is expected to provide 40,000 cubic metres of water a day when built. The plant will later be expanded to produce 60,000 cubic metres.
In November 2007, the WWD invited tenders for the building and operation of the plant. The tender period closed in May 2008. Given the time constraints on the water needs of the island, the contract was awarded less than a month later to a consortium including the company Zemco Construction Ltd.
However, following a number of complaints, the decision was revoked, and in December 2008, another company WTE Wassertechnik Ltd was awarded the contract. WTE also happened to be the lowest bidder in the tender process. In the meantime, Zemco challenged the decision to revoke the first decision, while two other companies that had submitted tenders, MN Limassol Water Co and IDE Technologies Ltd, challenged the latest decision to award the contract to WTE.
Fast forward to last Friday, June 5, 2009, when the TRA decided on all three challenges to the tender process for the building, operation and maintenance of the Episkopi desalination plant.
The TRA decided that the Water Department was right in revoking the initial decision to give Zemco the project, citing that it didn’t have the requisite experience of operating a desalination plant in the last 12 months before submitting its bid.
The Tender Reviewing Authority also ruled in favour of MN Limassol Water and IDE Technologies, finding that the decision to give the contract to WTE was technically flawed, citing the lack of information on “stand by” equipment in its bid.
As a result, the contract to the lowest bidder, WTE, offering desalinated water at €0.683 per cubic metre, was cancelled by a majority in the TRA. The dissenting opinion argued that it was in the public interest financially not to cancel the contract, noting that WTE was cheaper than MN Waters by €27m and IDE by €39m.
The latest decisions leave the Ministry with no choice but to consult its legal advisor, the Attorney-general, and take a new decision soon.
Aletraris played down the prospect of starting a whole new tender process. “The Tender Reviewing Authority did not cancel the whole process, it merely cancelled the awarded contract.”
Asked whether the re-appointment of WTE, the lowest bidder, or another company at a higher price would invite another batch of new legal challenges, Aletraris said: “This is a right assumption to make”.
Effectively this means huge delays, since whenever a legal challenge is raised, the awarded contract is put on hold until a decision comes out.
“What does this mean in delays? I don’t know. Even God is confused,” he said.
The water official rejected the notion that the department’s handling of the tender process was at fault, saying: “It’s a particular interpretation of the TRA, which cannot be challenged. You cannot pre-determine how they will interpret a decision so we can’t ensure it won’t happen again.”
Does this put the government’s plans to become independent of the weather for water supply in hot water?
“I would be happier if the process was not delayed, but it’s a strong word to say we are in trouble,” he said.
