Chinese company fights back to get order for railway engines
ISLAMABAD: After succeeding to win two tenders to supply 144 locomotives to the Pakistan Railways worth billions of rupees, the Chinese locomotive company is trying its best to stop the Railways from purchasing 150 locomotives from America.
But Sardar Ayaz Sadiq, Chairman National Assemblys Standing Committee on Railways, who has criticised these engines as total failure, says the company had signed a contract of $16 million for spare parts of 69 locomotives and if one starts calculating its price, it would turn out to be more than other bidders.
Almost 32 of these 69 engines are out of use permanently and the Chinese company has also not provided the required repairs and maintenance as obligatory under the warranty. Sardar Ayaz Sadiq also alleged that the company had submitted unreliable and unauthentic performance certificates to win the second bid of 75 locomotives. He said that the GM (audit) of PR has also objected to this in an audit para regarding 75 locomotives.
Documents reveal that the Chinese company attached four performance certificates, which were initially not attached with the tender of 75 locomotives but were attached with the documents after the NA Standing Committee on Railways took cognisance of the matter.
The certificates had to be issued by the Railway department of the country to whom the locomotives were to be supplied and were to be attested by the Pakistan Embassy functioning in that country but the documents, which were provided to the National Assemblys Standing Committee on Railways, were not attested by any embassy.
As a response and under immense pressure to buy new locomotives, Pakistan Railways has issued tenders to buy non-Chinese engines and the US Export Import Bank has offered a $400 million suppliers credit if Pakistan purchases the US engines.
The Chinese company, Dong Fang Electric Corporation, has also started writing to various organisations on exclusion from the recent 150 locomotives purchase. PR officials said the Chinese company officials lost their temper before the PR officials on Monday for not getting a chance to bid in the tender for 150 locomotives. The General Manager PR confirmed to The News about the attitude of the Chinese company officials in a pre-bid meeting.
In a recent letter bearing no. DEC-150DEL-10053IT dated May 31, 2010, the Chinese companys project manager, Huang Xue Hui, has written to Transparency International:
We won the open international competitive bidding held in 2001 to supply 69 Chinese locomotives to PR for US$98 million, and subsequently also won the open international competitive bidding held in 2007 to supply a further 75 Chinese locomotives to PR for US$105 million. This new contract of 75 locomotives was awarded to us due to the satisfactory service our previous 69 locomotives are giving to PR.
Similarly, when we insisted on purchasing the tender documents on 14-05-2010 and put it in writing that Mr Syed Shahid Ahmad was refusing to issue us the tender document, then the very next day his statement was carried in The News trashing our locomotives and falsely claiming that 32 of them had become scrapped.
(The fact is that Railways did not supply spare parts to our locomotives due to their poor operating and maintenance practices and lack of money. They have recently signed a maintenance contract with us for these spares, and as soon as the parts arrive, our locomotives will be back on the track.)
In conclusion, please note we are willing and able to offer PR most competitive pricing for these 150 locomotives as well as financing from Export-Import Bank of China or other financial institutions, the Chinese company letter said.
On the issue of unauthenticated certificates, documents show that 50 locomotives were supplied to Nigerian Railway Corporation in 1997 with a note of praise for the Chinese locomotives. Another performance certificate says that six locomotives were provided to Tanzania-Zambia Railway Authority. This certificate was also not attested by the Pakistan Embassy in the relevant countries.
One of the performance certificates that has been provided to the standing committee to prove the competence of Chinese locomotives states that some 50 units were supplied to Iraq Railways in 2003. This letter also carries a long praise of the locomotives. While the last performance certificate states that some 18 units were supplied to Kuele Loco Shed, Xin Jiang, in 1998. This certificate has also not been certified by any embassy.
The federal minister for railways had publicly stated a few months back that the Sino-Pak friendship had forced the PR to award tender for procurement of 75 locomotives to the Chinese company while he was willing to purchase locomotives from an American company because Railways had a bad experience with the Chinese locomotives.