APR disappointed with Dema tender process

WE read with great interest the recent Zimbabwe Independent story about Zimbabwe’s “dodgy” 200MW power project in your article titled Mugabe’s relative in corrupt project of June 3.

John Campion,APR chairman and CEO,Jacksonvile, Florida, Us.

The article correctly points out that the project was awarded to another company despite the fact that “APR Energy won the tender because it was fully compliant with (Zimbabwe Power Company (ZPC)’s) mandatory and technical requirements”.

There is one additional piece of information that Zimbabweans might find even more interesting. The preferred generating option — diesel-powered reciprocating engines — was not the most practical or cost-effective option available to ZPC or its customers.

Had the options for power generation truly been open-ended, we would have recommended a solution using state-of-the-art mobile gas turbines that could run on conventional fuels such as diesel, as well as lower-cost and widely available alternatives such as liquid petroleum gas (LPG), naphtha and kerosene. The turbines’ ability to switch seamlessly between fuels allows power generators to adjust fuel supply based on cost and availability.

The primary cost factor for fossil-powered generation is fuel, and current economic forecasts widely agree that global petroleum prices are rebounding. However, with the growing availability of natural gas worldwide, prices for gas liquids such as LPG are expected to remain flat through at least 2018, resulting in an anticipated cost differential of approximately 50% compared with diesel. Based on these assumptions, ZPC could save approximately US$200 million over three years while operating 200MW of turbine-powered generation on LPG.

Finally, it is worth noting the significant environmental advantages of LPG-fueled turbine generation:
Up to 93% less mono-nitrogen oxides (NOx) versus diesel generators, with virtually no sulfur dioxide emissions and far less particulate matter 20% less noise vs diesel generators.

l Significantly smaller footprint required to generate the same amount of electricity due to the superior power density versus diesel generators, and

l We stand ready to help the people of Zimbabwe achieve the economic growth and a better quality of life that results from having access to reliable electricity. Also, we believe it is incumbent upon power companies and power providers to ensure that local residents and businesses ultimately paying for power generation receive a solution that is cost-effective, practical and environmentally friendly.

We are greatly disappointed by the outcome of the public procurement process and we have requested clarification from the Ministry of Energy and Power Development surrounding the evaluation leading to APR Energy being unsuccessful in being awarded the project after submitting a comprehensive and complaint bid.

Initial non-conformities were observed during the bid-opening ceremony with respect to how both the price schedules and bid price were read aloud. The other bidders’ price was read in terms of “total contract value” instead of the required US$/kW/month for fixed and USc/kWh per Clause 2 and 3 of the tender. APR’s fixed and variable price breakdown for both dry and wet rates were shared broadly in accordance with tender Section 9 on Page 4 and Clause 3 on Page 12. This major variation during the bid opening ceremony concealed the actual price build-up of other bidders and created the conditions for possible post-bid pricing adjustments. Furthermore, the non-conformance of other bidders’ price should have led to automatic disqualification per the tender document.

Most importantly, APR submitted a fully compliant bid and one that was the most competitive, yet the project was awarded to a company that was not part of the original tender, which is strictly prohibited. This not only damages the reputation of the Zimbabwe Electricity Transmission and Distribution Company and government, but it affects greatly the Zimbabwean people who ultimately will pay a higher price for power generated leading to greater stress on the economy.

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5 thoughts on “APR disappointed with Dema tender process”

  1. C Frizell says:

    This is really interesting because I think it was last year that I said that I thought that gas turbines were the best solution to the country’s short-term power shortage. Solar is not a rational sultion for many reasons whereas gas turbines are used throughout the world and are available “off the shelf”

    But of course Zimbabwe tends to favour whacky and impractical solutions and one wonders if this could be due to possible financial advantage acruing to those who promote them.

    1. Tendai Sibanda says:

      why do u say solar is not a rational solution, google what Eskom SA produces in solar and the projected future contribution of solar to Eskom

      1. bexilford says:

        Solar is a good technology if properly planed and managed. The margin of making a success or failure is very thin. The construction costs, choice of pvs and overheads are critical. Gas is a proven technology and Zimbabwe has large supplies. If you visit Zesa website you will notice that most of their plants are operating at less than 20% capacity which is insane. Instead of issuing more tenders, they need to make more informed decisions which are planed. Many companies who have no experiences nor capital seem to be winning tenders. How can you give a contract to a person or company to build a $100 million project yet they have never build a $100 thousand project before? Zesa seem to have turned down small solar projects which they can learn from. They have nothing to loose since these are self financed projects with the builders bearing the risks. Eskom SA is an Italian project without tenderprenuers as is the case in Zimbabwe.

  2. Rjcd says:

    The level of corruption is sickening.

  3. C Frizell says:

    My business in Zim was called Solar Energy Supplies. Solar is great for rural lighting, nothing can beat it.

    However the problem with large installations is that electrical energy cannot be stored. Batteries are not an option. For a country like Zimbabwe you need a power source that is available as and when you want it. Solar (and wind) disqualify themselves on this count.

    Solar “sounds good” but cannot compete with conventional forms of energy such as hydro, coal, and gas turbines. Diesels tend to be very expensive both initially and in running costs.

    Zimbabwe needs power NOW, and cannot afford the luxury of making ecological statements.

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