MACAU DAILY TIMES  18.02.2011

More questions arise as documents mention mistakes

Light Rail Transit process

 

People usually say that a good beginning makes a good ending, but that seems to be quite different from what is going on with Macau’s Light Rail Transit (LRT) project. Macau Daily Times has seen several documents that point out to some mistakes and non-compliance from the winning bidder, problems that are downplayed by the Transportation Infrastructure Office, known as GIT.
On December 30, GIT announced that Mitsubishi Heavy Industries (MHI) had been granted the MOP 4.68 billion contract to supply the rolling stock and the system for the first phase of the LRT.
Japan’s Mitsubishi beat two rival bids made by the partnership between Bombardier and China Road and Bridge Corporation and a joint venture between German-based Siemens and China Civil Engineering Construction Corporation, which had proposed respectively a bidding price of MOP 4.56 billion and MOP 6.28 billion.
However, documents seen by the MDTimes show that the tender evaluation report is dated June 20, 2010 and that the first draft of the contract was approved by the Chief Executive’s office on August 8, 2010, giving the green light for GIT to start the negotiation with the Japanese company.
The process was then stalled until November, when GIT proposed a new version of the contract, signed by the Chief Executive on November 19, 2010.
However, a source close to the process told MDTimes that the process “was carried out with some irregularities” and that seems to be the reason behind the court injunction to block the process filed on January 28 by Bombardier and China Road and Bridge Corporation.
The same source also added that there are several documents missing from the process, especially reports from the consortium Egis Rail/Fase – Estudos e Projectos/Setec its (EFS), which since March 2009 was in charge of the project management and technical assistance for the first line of Macau driverless metro system.
On top of that, EFS – which was granted a 46 month contract worth MOP 176.2 million – did not have a say in the evaluation of the three bids. An evaluation committee composed of five people from Macau’s Administration – two from GIT, and the other three from the Land, Public Works and Transport Bureau, Infrastructure Development Office, and Transport Bureau – evaluated the three proposals, picking the winner.
“The evaluation report that has the classification of each bidder has no remarks nor explanations. It basically just has the classification that each proposal was awarded,” the source told our newspaper.
That means that the company hired by the Government to provide technical assistance in the LRT process did no comparative evaluation of the three bidders – apparently it only produced a document on the MHI bid, so-called “Opinion of one tenderer”.

However, the contract signed by GIT and EFS on March 23, 2009 clearly stated that the production of the tender document and the analysis of the proposals were “one of the more important parts of the process, because it means choosing partners that will take part in the whole construction”.
But GIT downplayed concerns: “A specific Tender Evaluation Committee was designated comprising members from different Government entities. The Committee worked independently during the tender evaluation stage and could ask GIT for technical assistance for specific issues. GIT provided this technical assistance with the help of its consultants, which includes EFS. This sums up EFS’ role during the tender evaluation stage.”
In the email statement to MDTimes, GIT confirmed that EFS only got their hands on the proposal submitted by Japan’s Mitsubishi.
“After the tender evaluation stage the Committee submitted to GIT its Evaluation Report indicating MHI as the tenderer with the highest score,” the office said.
“Following this course, GIT requested EFS to review, as an independent checker, MHI’s tender proposal and verify its overall compliance with the tender requirements.”
Meanwhile, GIT and EFS have had some quarrels, another source confirmed, saying “it was related to misunderstandings regarding contractual objectives”.
“It’s normal in these cases, but it’s not something that both parties can’t solve,” he added. EFS made no comment when contacted by our newspaper.

Missing documents

According to the documents seen by the MDTimes, the LRT file in GIT’s hands is missing several documents, including more than one report on MHI’s bid. One of the documents suggests that EFS produced at least three reports on the winning bid, the latest (C) with “23 mistakes and non-compliances of MHI’s proposal”.
To get around these issues, a source said, “GIT is proposing to include in the draft contract a list of items that MHI did not include in their proposal”.
“This breaches the tender rules, because these items should be part of their bid,” it added.
Moreover, according to the documents, the winning bid did not provide enough information on one important component of the tender document, the Automatic Train Control (ATC) system.
ATC is the general designation for a variety of techniques by which machines regulate the movement of rail rapid transit vehicles for the purposes of safety and efficiency. Functionally, ATC includes train protection, supervision, operation and communication.
According to our source, the Evaluation Committee sent a document to GIT saying that MHI did not submit information about the ATC system, adding that no additional documents could be submitted.
Nonetheless, it added, GIT reached the Japanese company, requesting the additional document to complete the required information. The document was a letter from Singapore’s Land Transport Authority, saying that MHI had completed a light rail system in the city, which included the ATC system.
This, we were told, was one of the main reasons by which the process was stalled between July and November.
Furthermore, according to information consulted by MDTimes, the Evaluation Committee only asked for additional explanations from MHI, not from the other two bidders, before producing the report in June 2010.
Only after the Chief Executive put the brakes on the process – allegedly after several letters and public interpellations from lawmaker José Pereira Coutinho, who raised suspicions – did the committee call on the other bidders to submit additional information, by late September.
The information was sent to GIT in October, but the decision was already made, and a month later GIT got the green light to negotiate with MHI.
Another document that MDTimes has accessed, shows that there are technical reports missing in the LRT file, namely communications exchanged between GIT, EFS and the Evaluation Committee.

What is leading to greater apprehension, our source explained, is that EFS produced a document on MHI’s proposed price for maintenance, “but that is not included in the LRT file”.
This report, according to the documents seen by this newspaper, shows that Mitsubishi’s price for maintenance “is abnormally low”, advising “to further evaluate this item”.
“The huge difference may mean simplified maintenance plan and less skilled maintenance team,” it adds.
According to the specifications of the tender set out by the Macau Government, the evaluation of the total price was done based on three different areas: base offer (rolling stock); 5 + 5 year’s maintenance; and additional trains.
Offering the second lowest in the basic proposed lump-sum category, with a price of MOP 4.68 billion, Mitsubishi proposed MOP 792 million for the 10-years maintenance, 52 percent less than the second lowest proposal. According to the tender, the classification of the proposals would be divided in two: 55 percent for the financial bid and 45 percent for the technical part.
However, and although it had an impact on the total price, the Government
allegedly snubbed the bids for maintenance and additional trains, only granting the contract for the rolling stock supply.

New suit likely

One of the documents suggests that EFS, which provided technical assistance, produced at least three reports on the winning bid, the latest pointing out ‘23 mistakes and non-compliances’

Documents that MDTimes has accessed indicate that there are technical reports missing in the LRT file, including a document on Mitsubishi’s proposed price for maintenance

GIT confirmed it had asked Parsons Brinckerhoff (Asia) to produce a tender document for the combined LRT operation and maintenance, but did not comment whether or not it was considering launching a new public tender

Bombardier’s court injunction asking for the suspension of all acts related to the LRT process was filed after the company’s experts reviewed the process, we were told.
Apart from that, a source has confirmed that the consortium headed by the Canadian manufacturer asked GIT to disclose more information, since “huge parts” of the documents in the LRT process were barred from view because it was considered confidential information, namely the weight of Mitsubishi’s carriages – an issue that could lead to additional work on the Sai Van Brdige’s structure.
However, to our knowledge, GIT did not reply to Bombardier’s request, and the company is yet to decide on the next step, that may well be another suit.
A lawyer explained to MDTimes that the consortium can now file a suit with Macau’s Administrative Court, which could order GIT to disclose the required information. “In these cases, it all depends on what is considered industrial and commercial secret,” he added.
A source also told our newspaper that MHI’s personnel have been reviewing the process at the GIT office since Wednesday. The consultation should end today.
MDTimes called Yoshitaka Kaneno, Mitsubishi’s representative in Macau, to confirm the information. “Due to the ongoing legal proceedings, further comments would be inappropriate,” Kaneno responded.
The Japanese company has always denied claims of previous arrangements before the Government’s decision. “There was no [previous] deal with [Macau’s] GIT,” said the general manager of the company’s Transportation Systems Business Department, Takayuki Hishinuma last month.

Maintenance tender?

The maintenance section of the tender has also raised several doubts, especially because early last year the Government asked Parsons Brinckerhoff (Asia) to produce another tender document for the combined LRT operation and maintenance.
GIT later confirmed the information to MDTimes: “Regarding Operation and Maintenance (O&M) strategy, GIT hired Parsons Brinckerhoff (Asia) to perform a study indicating possible O&M scenarios for the LRT system and produce a Tender Document accordingly.”
“Both Study and Tender Document are consistent with the Rolling Stock and Supply Tender Document in order to ensure no duplications in the scope of services,” it said.
However, the bureau did not comment on whether or not it was considering launching a new public tender. Hong Kong-based Parsons Brinckerhoff (Asia) made no comments.
Nevertheless, according to one of our sources, “that would be one of the reasons why Mitsubishi submitted a much cheaper price for maintenance”.
A statement in one of the documents seen by MDTimes says that a local company has lobbied for the contract to be awarded to MHI, recalling that both companies had cooperated in past at the solid waste incineration plant.

Misinformation

The whole LRT process has been tinged in controversy since mid-2010. One of the latest episodes took place in early December at the Legislative Assembly. Answering to lawmakers on December 8, secretary for Transport and Public Works, Lau Si Io, stressed that the LRT tender was still under evaluation and the Government was yet to reach a decision.
However, a notification from GIT shows that the office headed by Lei Chan Tong had sent the proposal to award the contract to MHI to the Chief Executive office on November 8, 2010. It took eleven days for the dispatch to be signed by Fernando Chui Sai On, but the information was only disclosed to the public on December 30. So the decision was made in mid-November, a month before Lau went to the Legislative Assembly.

MHI secured the rolling stock contract by paying the bank guarantee to the Macau Government before the deadline on January 7, and on the same day GIT notified the losing bidders.
Later, on January 28, Bombardier filed an injunction for suspension of the administrative effects of the award to MHI, and the GIT has put the brakes on the first phase of the project. The bureau has submitted its defence to the Second Instance Court early this month, and a decision is expected next week.
Also next week, Siemens and China Civil Engineering Construction Corporation is due to head to GIT’s office in order to review the whole process, our newspaper was told. Both losing bidders have until March 8 to lodge an appeal.
The first phase of the light rail, that can transport passengers between the Border Gate and Barra in the Macau peninsula and then via the Sai Van Bridge between the Jockey Club and the Pac On ferry terminal across Taipa and Cotai, should be up and running in early 2015, if there are no more delays.
The model of the Mitsubishi trains is Crystal Mover which is also running in Singapore.  Macau will operate four-cabin trains with a passenger volume of 476, stretching 47 metres long, 2.8 metres wide and 3.9 metres high.