Audit Bureau rejects overpriced € 250 m direct commissioning Siemens maintenance contract as illegal
By Sami Zaptia.
London, 15 September 2020:
- Libya’s Tripoli oversight entity, the Audit Bureau (AB), rejects Siemens contract
- Contract was awarded by GECOL for € 250 million
- AB says the contract was illegal as it was awarded by direct commissioning
- Contract was for eight-year maintenance of Ruwais gas turbine power station
- Ruwais has six x 156 MW units
- Audit Bureau says contract was enormously overpriced
Libya’s Tripoli-based Audit Bureau announced yesterday that it has refused approval of the Euro 250 million direct commissioning contract to Germany’s energy giant Siemens. It said it does not approve direct commissioning contracts under any circumstances.
The eight-year contract was awarded by Libya’s state General Electricity Company of Libya (GECOL) for the maintenance of its Western Mountain Gas Turbine Power Plant, popularly known as Ruwais power station. Ruwais has six 156 MW units.
The Audit Bureau gave these main six reasons for refusing to approve the Siemens contract:
1- The overpricing in the maintenance contract makes it equivalent to approximately 75 percent of the cost of creating new power units.
2- The contract was concluded by way of direct commissioning in violation of contract regulations.
3-The contracting company, Siemens, failed to implement a similar contract concluded in 2010 and has not yet completed it.
4- The contract is random and does not fit into the company’s current needs and circumstances.
5- The contractor’s insistence on drafting the contract in such a way that it does not require them to carry out the required work within the agreed period.
- The contract would result in the withholding of a large amount of funds at the expense of GECOL’s emergency needs.
The Audit Bureau requested that GECOL prepare a maintenance plan and offer contracts in a public or limited tender process, in accordance with the state contracts regulations.
In August 2017 Siemens had signed an MoU with GECOL to complete its many outstanding projects, including Ubari plant as well as providing urgently needed maintenance to a number of other power plants.
In December 2017 Siemens and GECOL signed a €700 million contract for two new gas-powered stations in Tripoli and Misrata. This included a long-term service agreement.