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ADB puts an end to ?negotiation?

LOCAL CONTRACTORS have long recognised post-tender ?negotiation? as civic body euphemism for attempts to wrangle the largest possible kickback from bidders.

india Updated: Dec 28, 2006 11:56 IST
Saeed Khan

LOCAL CONTRACTORS have long recognised post-tender “negotiation” as civic body euphemism for attempts to wrangle the largest possible kickback from bidders.

Now, international funding agencies, too, seem to have savvied up to municipal corporation doublespeak. The Asian Development Bank (ADB) has issued an embargo on “negotiations” on tenders received for its US $181 million (Rs 1366 crore) project to shore up civic infrastructure in four cities of the State.

The reason: bank officials apprehend that the post-tender bargaining could be used as a pretext to extract money by urban local bodies with “uncooperative” contractors being shown the door. 

And so, eighteen-odd months after it agreed to bankroll urban governance projects in Bhopal, Indore, Gwalior and Jabalpur, the donor agency has reportedly directed civic bosses in the four cities to abstain from negotiating with bidders. Even if this meant having to invite fresh tenders.

“The ADB has asked civic bodies to okay the bids provided rates of materials like cement, steel etc quoted by the contractor are not more than 20 per cent higher than prevailing market prices”, revealed a senior official.

If the figures quoted exceed this percentage the civic body should scrap the tenders and invite fresh ones, he added. On record, officials say the moratorium has been ordered so as to prevent delays in getting projects off the ground and assert that the Bank has the expertise to make an informed choice. 

“The ADB technical evaluation committee which scrutinises the bids is well acquainted with prevailing market rates for cement, steel etc. The offers are okayed only if they are reasonably priced”, said Project Manager, Project Implementation Unit, Indore, Prabhash Sankhla. 

“For instance, the Rs 22.61 crore bid for the 900 million litre daily (MLD) Narmada intake well and pump house was only 6 per cent higher than the Rs 21.50 crore originally envisaged. Even though cement and steel prices have gone up by over 50 per cent in the interim and so the bid was easily cleared”, he added.

Insiders, however, cited the “no-go” on negotiations to ADB fears that elected representatives would use the process to line their pockets. In fact, Senior Project Implementation Officer, ADB India Resident Mission, Alex Jorgesen is reported to have declared that he “smelled corruption” in the negotiation regime.

As a result, “although negotiations were allowed during the first 3 or 4 tenders the ADB has now put an end to bargaining with bidders with a view to lower prices”.