Upgrade deadlock over Port Vila runway ends – China contract ok

Prime Minister Charlot Saiwai ... surprised journalists with an announcement that the contract issues were resolved. Image: Dan McGarry/Vanuatu Daily Post

By Dan McGarry in Port Vila

In a late-night teleconference with senior government officials, World Bank representatives finally acquiesced to Vanuatu’s choice of bidder for the long-awaited Bauerfield runway upgrade.

Confronted with a determined government, the World Bank ended what one participant called a months-long “standoff” by indicating it had no objection to the decision to use China Civil Engineering and Construction Company, or CCECC, as the contractor for the projects.

CCECC’s bid for the Bauerfield component of the contract came in at just over US$47 million—approximately VT5.16 billion—according to members of the bid review committee. The repairs and upgrades on Tanna’s White Grass and Santo’s Pekoa airports will cost slightly more than US$11.3 million, or approximately VT1.24 billion.

A decision had been expected late January this year. But after a series of delays, the resolution arrived only hours before a senior cabinet briefing designed to bring the issue to a head.

In a late-night discussion with World Bank representatives on Thursday, senior government officials made it clear they were prepared to end the impasse by making their choice public, even if that preference was not shared by the funding body.

Journalists invited to the Friday morning event at the Holiday Inn had been briefed to expect a statement to that effect from the Prime Minister. Some were surprised when Charlot Salwai instead announced that the logjam had at last been broken.

The government clearly intends not to waste another moment. Contacted for comment, both the World Bank and CCECC were playing catch-up to the Friday morning announcement. Shortly after the press statement was issued, a spokesperson for CCECC indicated that the company had yet to receive formal notification of their selection, but promised a response as soon as the word arrived.

‘Critical importance’
For its part, a World Bank spokesperson replied by email, stating, “We fully appreciate the sense of frustration felt by many regarding delays in finalising the tender evaluation, however due to the critical importance of this runway to Vanuatu, getting things right through following proper procurement processes and due diligence was essential.”

They expressed relief at the positive result and were eager to move on: “The good news now is that all bidders have been formally notified of the completion of the evaluation process, with contract negotiations to be scheduled by the government in the coming days.”

Details are sparse concerning the cause of the delays. Speaking on background, all parties have admitted to differences of opinion concerning bid price, and confidence in the ability of some bidders to complete the required works within the proposed budget.

But no one was willing to discuss the process on the record, for fear of prejudicing the process.

An evaluation committee member told the Daily Post that their recommendation was returned three times with requests from the World Bank for additional information. These requests for information had to be forwarded to all bidders, and responses compiled and circulated.

Each of these took weeks to complete, giving rise to concerns among onlookers that the process was in danger of getting stuck in a loop.

Asked if this series of interactions affected the outcome, one person close to the process said: “It did affect the outcome. I can’t say any more than that.”

Fair contest
Numerous commentators and participants expressed understanding and respect for the integrity of the World Bank process, and understood the need to ensure a thorough and above all fair contest. Weeks ago, after a meeting with the World Bank’s vice-president for Asia Pacific, MIPU Minister Jotham Napat underlined the need to ensure that the process wouldn’t be subject to appeal or litigation following the award.

“That’s the last thing we need,” he said at the time.

The economic consequences of delay have been a source of deep concern people on the ground here in Vanuatu.

There has long been a widespread sense that undue delays to the Bauerfield project would only prolong the country’s economic struggles. In the wake of cyclone Pam, which ravaged half the country, tourism has struggled.

The shock announcement at the beginning of 2016 that Air New Zealand was suspending commercial service to Port Vila due to runway conditions was followed in quick succession by the suspension of a codeshare between Qantas and Air Vanuatu.

The resulting drop in tourists arriving by air put intense pressure on local tourism operators, who rely on air arrivals for the bulk of their revenues. Overall revenues from tourists arriving by air are just now returning to 2014 levels, but occupancy rates are lower.

This is primarily because tourists have been staying in Vanuatu marginally longer in recent months.

‘Round the clock’
When bids were unsealed in late December last year, a procurement specialist contracted by the World Bank assured bidders that committee members would work through Christmas and the New Year and do their best to get a result “within a month”.

A bid review committee member confirmed to the Daily Post that they had worked “round the clock” to assess the bids and make their selection.

According to one technical specialist, the upgrade to Bauerfield airport’s runway will consist of milling out the top 10mm of the runway surface, then re-mixing it and adding new bitumen. Then another 10mm of new runway surface will be added, effectively doubling the depth of the surface.

The contractor will work during airport downtime, mostly at night. The work will proceed in small slices, as it were, and a temporary ramp section will be added every morning to allow a smooth transition between new surface and old.

Asked about the state of the foundational materials that underlie the tarmac itself, the specialist replied that it was found to be in perfectly good condition.

Perhaps the primary concern for tourism business owners is the status of the codeshare between Qantas and Air Vanuatu.

The code share was cancelled shortly after Air New Zealand’s January 2016 announcement that they were suspending scheduled commercial service due to concerns about the condition of the runway.

The Daily Post asked Jotham Napat if he was going to contact Air New Zealand now, but he indicated he didn’t want to politicise the situation.

“This is purely a commercial deal. We’re doing our part. The airport has been certified. It’s just a matter for them to come.”

“The ball is in their court now,” he concluded.

Dan McGarry is media director of the Vanuatu Daily Post group and has written extensively on the Port Vila airport issue.

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