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National Assembly>Parliamentary Questions>Debate No. 1 of 16.03.2004

Debate No. 1 of 16.03.2004


MARE CHICOSE - SOLID WASTE MANAGEMENT AND LANDFILL OPERATIONS - AWARD OF CONTRACT
The Leader of the Opposition (Dr. N. Ramgoolam) (By Private Notice) asked the Minister of Local Government and Rodrigues whether, in regard to solid waste management and landfill operations at Mare Chicose, he will state -
(a) the amount paid since the expiry of the contract in September 2003 and to whom;
(b) if the scope of the works has been altered after tender submissions and, if so, when and why;
(c) if his Ministry has made recommendations to the Central Tender Board and, if so, when and which ones, and
(d) why has the contract not yet been awarded.
Mr Auroomooga Putten: Mr Speaker, Sir, I thank the hon. Leader of the Opposition for his PNQ which gives me the opportunity to clarify matters regarding the contract for the Mare Chicose landfill which has been extensively reported in the press.
I wish to inform the House that the contract for the operation of the landfill was awarded to SITA/STAM in September 1997 for the sum of Rs187,685,945. However, this amount has increased over the years due to an increase in the volume of waste disposed at the Mare Chicose landfill.
Members of the House will recall that only one landfill is in operation following the decision to abandon the construction of a landfill at Mare D´Australia. The Mare Chicose landfill is thus receiving about 1,200 tonnes per day against 400 tonnes for which it was initially designed.
Since the contract was due to expire on 15 September 2003, my Ministry initiated procedures for the preparation of the tender documents for contract 3, i.e. construction, operation and post-closure of the Mare Chicose landfill in early 2003. In fact, a new Project Consultant, namely Gibbs (Mtius) Ltd., was appointed in February 2003 for the supervision of the landfill and the first assignment of the Consultant was to prepare the tender documents after carrying out an audit. The Consultant submitted the draft tender documents in May 2003 which were approved by the Central Tender Board (CTB) in July 2003.
Tenders were launched by the CTB on 21 July 2003 and by the closing date on 11 September 2003, four bids were received and they were forwarded by the CTB to my Ministry for evaluation.
With regard to part (a) of the question, the contract for the operation and management of the Mare Chicose landfill expired on 15 September 2003.
On 15 August 2003, in view of the fact that the tender for the new contract was not yet finalised at that time, my Ministry sought the approval of the CTB for the extension of the contract on a month to month basis on the same terms and conditions until the award of the new contract. The approval of the CTB was obtained accordingly on 26 August 2003. The amount paid to STAM for the operation of the landfill since 15 September 2003 to 31 December 2003 is Rs29,471,990, i.e. an average of Rs8.4 m. monthly.
With regard to part (b) of the question, the scope of works for contract 3 – construction, operation and post closure management of the landfill consisted of the following -
Phase 1
-
Construction and operation of cells 5 and 6 for 3 years including:
-
leachate management
-
gas management
-
surface water management
-
ground water management
-
environmental monitoring
Phase 2
-
Supply, installation and commissioning of a leachate treatment plant
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Optionally, supply, install and commissioning of a gas treatment plant
Phase 3
-
Rehabilitation and post closure management for 7 years.
There has been no alteration in the scope of works after tender submissions in respect of the new contract.
An Evaluation Committee was set up under the Chairmanship of Dr. A. Suddhoo to analyse the bids received and submit appropriate recommendations. However, clarifications were sought by the Evaluation Committee regarding power generation which was an option in the tender documents.
During the evaluation exercise, the Evaluation Committee submitted its views on Clause PSG 8 of the tender documents relating to power generation as follows -
(a) the tender document stipulates that the client may opt for the implementation of power generation and that the contractor has to quote in the schedule of quantities the cost of production of power;
(b) the acquisition of a power generator is considered optional. The Committee, therefore, proposed to evaluate the bids with and without power generation option;
(c) evaluation of the bids with and without the power generator would significantly impact the final choice of the client, and
(d) an award which includes a power generator can only be effected after a proper feasibility study has been carried out to demonstrate its viability.
My Ministry had sought the views of the State Law Office (SLO) and on 10 December 2003, the SLO had subsequently advised that it would be legally in order to proceed with the evaluation of the bids with and without power generation. The Evaluation Committee and the CTB were informed accordingly.
However, the Evaluation Committee, in its report on 16 December 2003, recommended that the tender be awarded with power generation, subject to satisfaction being obtained on a number of conditions to be addressed at the Letter of Intent stage relating mainly to landfill gas treatment, leachate treatment, staffing, methodology of works and emission standards.
Subsequently, the recommendations of the Evaluation Committee were examined by Government and, in view of some ambiguities in the tender documents relating to the clause on power generation namely -
The tender documents assign the responsibility of undertaking the feasibility study of a power generation plant on the successful bidder. Whereas it is usually required that any feasibility study which needs to be carried out, must be undertaken prior to the tender exercise.
Government decided on 26 December 2003, that tenders be evaluated without power generation in order to avoid all difficulties/ambiguities when the contract will be awarded.
As regards part (c) of the question, in the light of Government decision to evaluate without power generation, the Evaluation Committee recommended that the contract be awarded to JV STAM/SUEZ Environment for the sum of Rs934,984,770.77 (exclusive of VAT) subject again to satisfaction being obtained on a number of issues relating to landfill gas treatment, leachate treatment, staffing and methodology of works to be finalised at the Letter of Intent stage.
On 09 January 2004, the Ministry forwarded the recommendation of the Evaluation Committee to the Central Tender Board for approval.
On 23 January 2004, after scrutinising the Tender Evaluation Report, the CTB informed the Ministry that it considered the offer of JV STAM/SUEZ Environment to be non-responsive in view of certain major deviations in the bids and which could not be corrected through Letter of Intent/negotiations and suggested that the Ministry should consider reviewing its recommendations.
On the same day, the Evaluation Committee was apprised of the reply from the Central Tender Board and on 06 February 2004, the Chairman of the Evaluation Committee substantiated the rationale behind its recommendation and maintained that the contract be awarded to JV STAM/SUEZ Environment as it considered that the deviations were not major ones.
In the given circumstances, Government decided on 06 February 2004 that, in a spirit of transparency and fairness, the Central Tender Board be requested to annul the tender exercise and invite fresh tenders on the basis of a well-prepared tender document so as to clear all ambiguities in the tender documents.
As regards part (d), no contract has been awarded yet as the tender exercise was cancelled. Technicians of my Ministry are having a fresh look at the tender documents taking into consideration the following -
(i) two envelopes system (technical and financial) instead of one;
(ii) review of the eligibility criteria;
(iii) without power generation; and
(iv) review of leachate treatment and disposal options.
Fresh tenders will be launched after receiving Central Tender Board's approval. It is expected that the new contract would be awarded by September/October 2004. It is proposed to enlist the services of International Consultants to assist in the preparation of tender documents and evaluation of bids.
To conclude, I wish to point out that landfilling, which is a new concept in Mauritius, is our main disposal option and will continue to remain so in the short and medium terms. There is no adequate local expertise and human resource capacity in the sector and we are presently relying on foreign expertise. Like many small island developing States, Mauritius has limited land resources and the problem of waste disposal is further compounded by competition for land uses. Our role as responsible Government is to ensure that environmental sound practices are adhered to in the Solid Waste Management Sector and also value for money is obtained at all times.
Dr. Ramgoolam: Mr Speaker, Sir, if that does not smack of corrupt practices, I wonder what is 'corrupt practices'? I have many, many questions to ask the Minister, and I hope I get the time to ask the questions I want to ask.
The Prime Minister: On a point of order, Mr Speaker. We are meeting after the vacations and the first thing that the Leader of the Opposition does is to make a comment instead of putting his questions. May I appeal to the Chair to call him to order again, Mr Speaker, Sir?
Mr Speaker: First of all, let me rule on this. I have said in the past - and these are the Orders - that we cannot accuse anybody of corruption unless you have evidence to prove that. Secondly, I would like to make an appeal to every Member of this House to help the Chair to maintain decorum and dignity in the House. I appeal in particular to the hon. Prime Minister and the Leader of the Opposition, to help me to maintain this decorum and dignity. I rely on you both very sincerely.
Dr. Ramgoolam: I agree with the decorum bit, Mr Speaker, Sir, but I can't fail to say that it smacks of corrupt practices and I'll tell the Minister why.
(Interruptions)
Mr Speaker: Order!
Dr. Ramgoolam: The Minister has confirmed therefore that STAM Ltd. represented by IBL here in this country, has already pocketed nearly Rs14 m without tendering procedure. Can he say how long this will last and how much does he expect STAM Ltd. to get from this?
Mr Auroomooga Putten: Mr Speaker, Sir, as Parliamentarians we have to take our decision, be patriots and give the facts to the nation. The contract expired in September and STAM Ltd. has been requested to operate the landfill until the future award of the contract. Up to now, the landfill has been properly managed and we are satisfied.
Dr. Ramgoolam: The hon. Minister has not answered the question at all, Mr Speaker, Sir. I asked him: how long does he expect STAM Ltd. to continue to pocket public funds, and how much does he think the amount will end up before the contract is awarded?
Mr Auroomooga Putten: Let me inform the Leader of the Opposition that, in September, we are going to award the contract.
Dr. Ramgoolam: Therefore, the Minister confirm that STAM Ltd. will pocket Rs8.4 m per month for twelve months without any tendering procedure! Is that what the Minister calls transparency and good governance?
Mr Auroomooga Putten: Let me inform the hon. Leader of the Opposition that we got the full approval of the Central Tender Board as far as the operation of the landfill by STAM is concerned. This Government is very serious, all procedures are being carried out in a manner of transparency. Let me remind the Leader of the Opposition what were the amounts paid to STAM Ltd. over the past years. In September 1998, the amount paid to STAM was Rs2.8 m. In December 1999, the amount paid to STAM was Rs4.3 m. At that time, Rs4.3 m. was based......
(Interruptions)
Mr Speaker: Order! Order! I am calling the House to order. Hon. Paya, please!
Mr Auroomooga Putten: Let me repeat again that in December 1999, the amount paid was Rs4.3 m. based on average of 400 tonnes of waste daily. Now, we are receiving 1,200 tonnes of waste daily. There is nothing we have to hide. The Central Tender Board has approved everything. The Government is a serious one. Everything is being done in transparency and all procedures are being fulfilled with the approval of Central Tender Board.
Dr. Ramgoolam: The Central Tender Board has just rejected your recommendations, don't hide behind it! Can the Minister confirm that all this was not done diligently so that the contract could be awarded on time?
Mr Auroomooga Putten: Let me inform the Leader of the Opposition and the House that the Evaluation Committee made its recommendations, but it is the Government that decides the policy. Why? Because there were some ambiguities in the tender documents as to whether we are going to go with power generation or not.
Dr. Ramgoolam: The policy of Government is to extend the contract on a month to month basis without tendering procedures! That is the policy of the Government! Say it! Why is the hon. Minister afraid to say it?
Mr Auroomooga Putten: Mr Speaker, I have already answered the question.
Dr. Ramgoolam: Therefore, Mr Speaker, STAM cannot have it better. It does not get the contract, but it stills get the contract. Therefore, STAM, without any tendering procedure, is now getting the contract by hook or by crook.
Mr Auroomooga Putten: Mr Speaker, Sir, the Leader of Opposition is going to make political statements on this issue. Let me re-assure him that the amount paid to STAM is being made on the same rates. We have nothing to hide. We are receiving one thousand two hundred tonnes of waste daily as opposed to four hundred tonnes in 1999. We have got the full approval of the Central Tender Board for a new contract will be awarded in September this year. These are facts; It is crystal clear and everybody should understand.
Mr Duval: Let us come to the facts. The Minister just now…
(Interruptions)
Mr Speaker: Order!
Mr Duval: Respect the democracy of this country.
(Interruptions)
Mr Speaker: Order! Order, please!
Mr Duval: Mr Speaker, Sir, I'll explain to the Prime Minister what happens with people's pockets. I hope he does not want me to repeat what he is doing to people's pockets!
(Interruptions)
Mr Speaker: Order!
Mr Duval: Mr Speaker, the hon. Minister has just mentioned that the tonnage is one thousand tonnes.
(Interruptions)
No, no, he just said one thousand tonnes. In his formal reply, the Minister mentioned one thousand two hundred tonnes. If we go back to November, when the previous Minister replied and gave the reason for the increase - and it is always increasing - we were given as one thousand tonnes a day. Is the Minister actually saying that in the course of a few months we have had 20% increase in daily wastage at the landfill and, therefore, justifying the ever-increasing cost?
Mr Auroomooga Putten: Let me reiterate and inform the Members of the Opposition and Parliamentarians that we are receiving one thousand two hundred tonnes of wastage daily and that is all.
Mr Duval: How can he reconcile the fact that we are paying STAM for 20% increase in throughput per day over only a few months? What is the wastage? Is it being reproduced by Government? 20% increase in a few months!
Mr Auroomooga Putten: Mr Speaker, Sir, I have already answered the question. I have said one thousand two hundred tonnes. I am not going to lose my time on small details.
Mr Dulloo: The hon. Minister said that there were four bids. But were there not eight offers in all and from the eight offers STAM/SUEZ Environment, the company operating there right now and represented by IBL, tendered Rs1.54 billions for that contract and it happened to be the most expensive tenderer?
Mr Auroomooga Putten: Can you repeat the question, please?
Mr Dulloo: People seem to be submerged in the heaps of rubbish! My question was: there were four bids - and, in fact, actually there were eight offers - and the company right now is managing for one whole year without tendering procedures. That company STAM/SUEZ Environment, represented by IBL, tendered for the amount of Rs1,540,600,000 and it happened to be by far the most expensive tenderer.
Mr Auroomooga Putten: The hon. Member should understand that it is the Central Tender Board that takes the decision and not the Minister.
Mr Dulloo: I understand the Minister to be saying that the Tender Board processed the whole thing. The Tender Board saw that STAM/SUEZ Environment disqualified for many discrepancies, but Government through his Ministry is insisting that the contract be awarded to STAM/SUEZ Environment represented by IBL.
Mr Auroomooga Putten: This is not so.
Dr Jeetah: Mr Speaker, would the Minister confirm whether there were some major departures from the criteria for eligibility according to the Tender Board?
(Interruptions)
Mr Speaker: Order, please!
Dr. Jeetah: Hon. Minister, would you like me to repeat the question?
(Interruptions)
Would you confirm that according to the Central Tender Board, there were major departures from eligibility criteria? Is this true or not?
Mr Auroomooga Putten: Let me inform the House that without power generation the Evaluation Committee recommended that the contract be awarded to STAM, but when we submitted the recommendations to the Central Tender Board, the CTB stated that there were certain deviations; and these deviations, according to the CTB, are major whilst on the other hand, on the Evaluation Committee, these are not considered to be major.
Dr. Jeetah: Mr Speaker, Sir, the departures from eligibility criteria concerned equipment and qualification of the personnel. Is this true or not?
Mr Auroomooga Putten: Mr Speaker, Sir, because of the ambiguities relating to "with the power generation and without power generation"and the deviations which are considered to be major deviations by the CTB and minor according to the Evaluation Committee, we have taken the decision to re-tender now, in full transparency.
Dr. Ramgoolam: Can I ask the hon. Minister - since he came to the power generation and said at one point that this was optional - why is it that the tendered document says "that the tenderers should know that it is the intention of the Mauritian Government to promote sustainable development and integrated waste management practices and this includes waste minimisation, re-use and the development of energy from the landfill gas". That is what the tendered document says. Furthermore, at the next page, it says: "It is the intention of the employer to establish landfill gas power generators to supply electricity to the local energy grid. The hon. Minister is now saying that this power generation is not important any more. Can he explain that?
Mr Auroomooga Putten: No, Mr Speaker, Sir. We are saying that the documents had some ambiguities. We have decided in a spirit of transparency - and giving a fair chance to everybody - to re-tender and seek the support of international consultants to finalise the issues.
Dr. Ramgoolam: Which documents had technical ambiguities? Which part was ambiguous according to the Minister?
Mr Auroomooga Putten: The ambiguity rested on the power generator, because with power generation, the award will be given to the contractor subject to a feasibility report being made by the successful bidder which is not correct. This is wrong. This Government cannot allow this type of work. In full transparency we are re-tendering the exercises and we are going to have a new contractor by October.
Mr Dulloo: Mr Speaker, Sir, may I ask the hon. Minister to be clear in his answer? It was the Central Tender Board which refused to approve the contract, because of the many discrepancies and defects; and, in fact, Government insisted that the power generation component be removed so that the tender be awarded to STAM/SUEZ Environment as represented by IBL. It was Government that insisted that the contract be awarded to STAM/SUEZ Environment after removing the power generation segment which was the most important segment.
MrAuroomooga Putten: Let me inform the hon. Member that Government never insisted at any time on the choice. In fact, the Central Tender Board said that these were major deviations while the Evaluation Committee said that they were minor ones. The Evaluation Committee decided to maintain its recommendation for STAM and the Government, in a letter of transparency, to avoid ambiguities decided to annul the Tender Exercise and to re-tender.
Mr Dulloo: Mr Speaker, Sir, I listened to the hon. Minister well. He said that Government decided that the tender be evaluated without power generation. Once the tender is awarded without power generation, automatically, STAM/SUEZ will become cheap compared to the other tenderers. This is why Government decided that the contract be awarded to STAM/SUEZ Environment; and the Central Tender Board refused, because STAM/SUEZ Environment would disqualify as a result.
MrAuroomooga Putten: This is not correct, Mr Speaker.
Mr Speaker: This is a statement, hon. Dulloo.
Dr. Ramgoolam: Can I remind the hon. Minister what his predecessor in his last answer to my PNQ on 04 November said. I quote -
"On top of that, we have made provision, if this is viable, so that the gas we are obtaining from there can be converted into electricity. That is why we took so much time in preparing those tender documents."
How will the Minister reconcile what the former Minister said with what he is saying today? His predecessor said that it took so much time to prepare the tender documents because they wanted to get this power generation.
Mr Auroomooga Putten: Let me inform the hon. Leader of the Opposition that the concept of landfill is new in Mauritius. We are trying to bring the latest technology from Europe to Mauritius and we take the right decisions.
As far as power generation is concerned, I said that the contract will be awarded subject to a feasibility report being undertaken on the power generation by an independent body. If this is not proved to be viable, it will take longer than expected. Being given the context right now of the ambiguities with the power generation, with the schedule of quantities that are being given, in a letter of transparency, we have decided to annul the tender exercise and seek for new bidders.
Mr Dulloo: The tender was advertised in July 2003. The date limit for submission was 11 September 2003. I would like to ask the Minister whether many companies asked for an additional time for submission, specifically because of the power generation component, in order to be able to compete. Many companies that were interested could not participate in the tendering procedure, because a time limit was imposed and the former Minister then said in Parliament that "due to the urgency of the situation, because people in Mare Chicose were suffering from methane gas emanation, we could not wait any more. This is why we should press for and award the tender". Was it not the point made by Government in the past?
(Interruptions)
Mr Speaker: Order!
Mr Auroomooga Putten: Sir, we have gone in accordance with the time-table. We are fully satisfied that sufficient time has been given to international bidders to bid. Work has been done. We cannot play with wrong information. I do not agree with the statement made by the hon. Member.
Dr. Ramgoolam: The former Minister said that it was urgent to have the contract by December 2003. In December 2003, we got the by-election, we have got a new MP, but the contract is still not awarded! Now, the Minister is saying that the contract is going to be awarded maybe in September or October 2004. Therefore, STAM/SUEZ Environment will continue to cash in public money month by month and get extra work. Can the Minister confirm that?
Mr Auroomooga Putten: Mr Speaker, Sir, I have already answered to what the hon. Leader of Opposition has said. I have given all the facts in my reply. I would have imagined that Members would listen to all the facts. Secondly, because of the ambiguities in the tender procedures and to give a fair chance to all players on the playing field and, in a letter of transparency, we have decided to relaunch the tenders with the support of international consultants.
Dr. Ramgoolam: Can the Minister confirm to the House whether the Technical Committee whose Chairman is Dr. Suddhoo had confirmed that if the sale of electricity was done it would save the taxpayers Rs507 m. Can he confirm that?
Mr Auroomooga Putten: Mr Speaker, Sir, I said that as far as the project of power generation is concerned, a feasibility report has to be done to say whether it is viable or not. If it is not viable the question of the Leader of Opposition does not arise.
Dr. Ramgoolam: Will the hon. Minister confirm that the Technical Committee said in its report that Rs507 m. would be available as fund to the Government if electricity is sold through that power generation?
Mr Auroomooga Putten: Mr Speaker, Sir, let me maintain my answer and say that we have decided to go without power generation in the medium-term and we support the retendering of the exercise.
Dr. Ramgoolam: The Minister has recently been appointed; he should start on a clean sheet. This is a Scam for STAM! This is what I can say. Would he be agreeable to start the procedure for a full-fledged Commission of Inquiry to look at the transparency of all that he has said? If he has nothing to fear, nothing to hide, he should say yes.
(Interruptions)
Mr Speaker: Order!
MrAuroomooga Putten: Mr Speaker, Sir, everything has been done in a spirit of cleanliness. The Government is working hard. There is no matter of corruption in STAM. I have said that, even in 1999, the amount paid to STAM was more than Rs4 m.
(Interruptions)
Mr Speaker: Order!
(Interruptions)
Mr Aumoorooga Putten: They should let me answer the question! I am saying that the Government has always worked in a spirit of full transparency and in accordance with the approval of the Central Tender Board. We have nothing to hide. But if the Members of the Opposition insist, I will tell them that the Prime Minister has informed me that he is prepared to have a Commission of Inquiry.
(Interruptions)
Mr Speaker: Order! We move to 'Questions addressed to the hon. Prime Minister'. I have been advised that PQ No. B/51 will be answered by the hon. Prime Minister, time permitting, of course.