Myanmar Military-Backed Firm Rejects Minister’s Account of Power Meter Bidding Problems
By The Irrawaddy 30 August 2019
YANGON—Military-run Myanmar Economics Holding Public Company Limited (MEHPCL) on Friday said that a deputy minister’s comments in Parliament regarding problems with the procurement process for electricity meters over the past three years were unfair and had harmed the company’s reputation.
In a statement, MEHPCL said Union Deputy Electricity and Energy Minister U Tun Naing’s comments on the issue in Parliament on Aug. 21 “seem to have caused more public misunderstanding, while the company is currently facing a lot of international pressure.”
Earlier this month, the UN’s Fact Finding Mission on Myanmar (FFM) issued a report listing military-run businesses and foreign firms with which the military has ties. The FFM and international rights defenders have called for military chief Senior General Min Aung Hlaing and other top brass to be prosecuted at the International Criminal Court for their role in the 2017 Rohingya crisis, which saw more than 700,000 Rohingya expelled to neighboring Bangladesh from northern Rakhine State.
During a session of the Union Parliament last Wednesday, U Tun Naing was asked by lawmaker U Kyaw Htwe to clarify the situation regarding the electricity meter tenders. U Tun Naing said the question comes up frequently, as the public wants to know why there is a shortage of meters, which has left some people unable to access electricity.
Prior to January this year, MEHPCL was known as Union of Myanmar Economics Holdings (UMEHL).
The deputy minister said five tenders were called between 2016 and 2018. During that time, three winning tenders, all from UMEHL and UMEHL-back companies, were annulled because “they were violating the tender guidelines and procedures.” The deputy minister implied that the delayed tender process over past three years was one of the main reasons for the lack of meters.
He went on explain that the first tender was canceled in 2016, following the Electricity Distribution Department’s contract with UMEHL to buy 200,000 meters for home use and 60,500 meters for industrial use. It was annulled as only one company applied.
The deputy minister said another electric meter tender in 2017 was annulled due to its very high cost. This one involved two companies: UMEHL and Alpha Power Engineering Company. The latter provided the lower estimated cost. If the government had approved UMEHL’s bid in late 2017, it would have resulted in a 5.343-billion-kyat loss to the state, he said.
U Tun Naing explained to Parliament that both companies repeatedly sent letters to the Union minister of electricity and energy in an effort to win the contract. Thus, the ministry annulled it in accordance with Article 6 of the tender selection guidelines, which states that any bidder who approaches a civil servant or any politically prominent person in an effort to win the tender process will have their bid annulled.
In Friday’s statement, MEHPCL rejected the deputy minister’s account, saying the letters sent to the minister were intended to explain the quality of the products the company proposed to use.
In late 2017 a fourth tender process was held to supply meters for home use in rural areas, small towns and large towns. According to the deputy minister, the ministry drew up better technical specifications, and many more companies tendered bids. UMEHL was among them but was not chosen, as the prices offered by other companies were lower. The deputy minister said the government saved more than 3 billion kyats in that bid in late 2017
The ministry’s decision to make public the tender process via Parliament has caused concerns for MEHPCL, which was founded as UMEHL in 1990 by the Ministry of Defense.
MEHPCL claimed in its statement that the ministry’s comments included faulty information, and confused the details of the five tenders in question. It said its costs were higher as it uses higher quality meters, which last longer and can adapt to changing technologies.
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