I refer to the report Water tunnel contract to be awarded soon .

The writer seems to be confused that the award of the contract is merely tied to the price and that the conditions to tendering are just appendages to be discarded if inconvenient.

In fact, the basis of an international bidding process is to ensure transparency, fair-play and keen competition in order that the most qualified contractor is selected.

Therefore, adherence to the terms and conditions of bidding is mandatory particularly since these same terms and conditions of bidding are drafted by the Japan International Cooperation Agency (Jica) and the government through Kementerian Tenaga, Air dan Komunikasi (KTAK).

The salient requirements of a competitive and fair bidding process must contain the following:

i. All bidders must submit bids based on the engineer’s design.

ii. Alternative bids may only be submitted if the bid is based on the engineer’s design is submitted.

iii. No bid may be modified after the bid has been submitted at the close of tender especially if it gives an unfair advantage over other bidders.

iv. All partners of a joint-venture are jointly and severally liable for the execution of the contract.

v. No compliance with any of the terms and conditions of tendering shall result in the bid to be rejected.

From the above report, it appears that the Shimizu-led consortium in submitting a bid that has not complied with the requirement of submitting the bid based on the engineer’s design.

This means that it is not possible to compare Shimizu’s bid with the bids from the other bidders. For this non-compliance, Shimizu’s bid must be rejected as specified in the Bid Document.

As the report has rightly said, Shimizu’s condition for their bid will set up a situation for a variation order (additional claim for payment) should their requirements be not met during the construction stage. This means that Shimizu’s bid places risks on the government and is not the lowest bid as was made out to be.

It was discussed in a media that Jica intends to get around this problem by getting Shimizu to drop their condition of bid. This is actually an illegal ploy and goes against the tenet of competitive and fair bidding.

This is especially so for compliant bidders who had factored in all risks and therefore had submitted a commensurate bid price.

The government’s position in not wanting the Shimizu-led consortium is therefore a correct one and in line with its declared aim of achieving transparency and accountability in the procurement of government projects.

Referring to the high-profile corruption probe into Nishimatsu, a partner in the Shimizu-led consortium, I am rather disappointed at the above report’s cryptic remark that the effect of the probe on the consortium’s bid remains to be seen.

It seems logical, even necessary, for the government to distance themselves from such activities and behaviour. The government’s formation of the MACC and the oft-repeated mantra of fighting corruption should alert the government to drop the Shimizu-led consortium. This is certainly not rocket science.

Based on recent media reports, Nishimatsu’s woes are certainly serious. The president, who has since resigned, has issued a public statement of apology as a result of the investigations into their slush funds. He has also been indicted by Japanese authorities together with four other senior ex-colleagues.

Even at this early stage of investigation, the Japanese government has deemed the situation serious enough to impose a temporary prohibition on Nishimatsu to bid on public works projects. The latest revelations from the investigation involves bribery case for the construction of two multi-billion yen laboratories for Canon Inc.

Investigations into the slush funds in Japan and overseas including Malaysia will certainly bring embarrassment to the Malaysian government given there being a cause for such probing. Why should the Malaysian government get into an unnecessary entanglement which is not of its own making?

Any hint of the government’s intention of involving Nishimatsu in the project will give rise to suspicion of a hidden agenda that goes against accountability.

Perhaps the most intractable problem for the Malaysian government is that it has to seek concurrence from Jica for the award of the contract.

Although the government as the employer has the sole right to award the contract to whom ever it thinks is most qualified, the loan agreement requires that Jica concurs with the Malaysian government’s decision.

Back in August 2008, the energy, water and communications minister was reported to have said that the government had recommended a contractor to Jica for concurrence to award but that concurrence was denied.

His deputy, Joseph Salang said in Parliament in Nov last year that the government would not compromise its sovereignty to Japan over the appointment of the contractor and that other sources of loans were being considered if concurrence is not given.

Reading the above report, the government seems to have changed from its tough stand in deference to Jica’s insistence and therefore has beholden this nation to Japan, ie, a subservient borrower-lender relationship.

Why the turn-around? Where is our national pride?

The loan is simply a commercial transaction. Although the interest is relatively low, this is offset by giving at least 70 percent the contract value to Japanese contractors. There is, therefore, no reason for the government to kowtow to the wishes of a foreign government.

In conclusion, the Malaysian government would do itself a favour if it sticks its original intention to follow strictly the international bidding system which it had put in place for the project.

It would then not have to face unnecessary risks over the price of the project, it would set a standard for transparency in government procurement for all future projects and proudly stand for our legitimate rights against a foreign government.