Wednesday, November 28, 2007

Oman Waste Water Company capitulates to the Chinese

I meant to blog about this a couple of weeks ago, but got distracted.
Oman Waste Water Services Company had a press conference where they announced that they had re-engaged the Chinese company SinoHydro to continue the massive waste water project. The details are here Times of Oman Article

Work on Muscat Wastewater project to resume next month
Tuesday, November 13, 2007 12:14:23 AM Oman Time
MUSCAT — Work on the Muscat Wastewater Project, which was stopped temporarily after the June cyclone, will resume next month, the Oman Wastewater Services Company announced yesterday. According to Omar, like all large-scale projects, technical problems are almost inevitable. Work had come to a halt in some parts of the Bausher area. The current difficulties are relatively minor and temporary, particularly in the total context of the project.

“Sino Hydro Corporation which had been contracted to lay the pipeline network remains committed to the long term interests of the project and I am happy to announce that we have reached a solution and agreement with them. I can confidently tell you that work will be restarting by the end of the year,” Omar disclosed to the press.

Great. I was a bit disappointed however than none of the crack reporters present seemed to think of asking some real questions. Like, ‘Can you tell us what happened to all the Indian and Nepalese workers SinoHydro abandoned when their management fled the country in June?’
As reported here News Post India Article
and here in the excellent (and Dragon recommended)News Brief Oman

Or questions like: ‘How much extra did Oman Waste Water Co have to pay to get the Chinese back, seeing as no-one else would touch the contract with a 10 foot pole? Or, Why are you now paying extra money to a contractor that has a recent history of both completing work at poor standards, abusing their workers, bringing in illegal Nepalese workers, and of fleeing the country and their responsibilities when things got difficult? Or, What is OWSC doing to make sure the previous mistakes are not repeated?

No, instead all we got was the usual moronic re-printing of the press release that flatters OWSC with no mention of any of the real story. Well done Times of Oman.

SinoHydro did its runner after cyclone Gonu trashed a lot of their original work and OWSC decided not to entertain any compensation. Perhaps OWSC should have made sure that SinoHydro had insurance against such events. Or awarded the contract to a decent company in the first place. But when it was clear to SinoHydro that the contract was flawed, they literally left. All SinoHydro Senior management got on a plane and flew back to China. Leaving everyone in limbo. Anyone who has experience in contracting knows that you never want to take on someone elses work once they’ve started. The liabilities are too great.

So it seems SinoHydro had OWSC by the balls. Now, as a result of the flawed contract, and OWSC incompetence, SinoHydro are back, on improved terms, and with no apparent penalities for their previous behaviour. OWSC management are still in their jobs, and probably planning holidays to Switzerland to see the gnomes.

Actually, I made that last bit up – I have no evidence whatsoever that the fantastic team at OWSC have done anything improper at all. Because that just wouldn’t make any sense at all, would it?

We all know who will have to pay for this – the Oman Government, and the people who will again have to deal with dug up roads all over the Capital not finished properly. Good work OWSC!


  1. "Why are you now paying extra money to a contractor that has a recent history of both completing work at poor standards, abusing their workers, bringing in illegal Nepalese workers, and of fleeing the country and their responsibilities when things got difficult? "

    That is EXACTLY what I was wondering. I would have loved to get up at the press conference and ask that one.

    Great post. Keep it up.

  2. True. 100 percent true. Please bring to fore issues such as this.

  3. I have dealings with the OWSC (not OWWC!) and can tell you that their management isnt really the problem. It's the tender board that is the problem. When a Contract goes to tender, the tender board will select the lowest tender every time. SinoHydro won the job because they low-balled it.

    And besides, as mentioned, all the other Contractors are not going to touch that project with a 100' barge pole, for more reasons than just the clearly obvious warranty ones - they are all too busy working on other projects!

    In fact for various new portions of the wastewater network that have gone to tender recently, there has been in some cases a return of just two tenders per Contract.... not exactly giving OWSC much choice in who does the work.

    OWSC could kick SinoHydro to the curb, but then who would do the work? They've started, and now they have no choice other than to finish. As also mentioned in your blog, SinoHydro are quite happy to jump on a plane and pull a houdini if there's any difficulties... so why would OWSC impose any penalties right now? Get the damn network built first.

    And besides, the whole reason for the slow progress for the works is that SinoHydro neglected to carry out topography surveys and thus were surprised when they dug down and hit rock and needed to dewater their trenches...

    Long story short, OWSC should of been firmer about saying no to SinoHydro, but werent, Gonu happened, and now they cant get anyone else to do the work so they have to get SinoHydro to complete the job otherwise they will never get it finished.

    I too would like to know what happened to all the workers who were screwed over by SH.

  4. Thanks Suburban and hot(c)hics! Your support is welcome.

    Sythe - Thanks for the correction: done! And yes, we all have to deal with *(%*(%*( Tender Boards, and the Omani Gov. focus on trying to get anything as cheap as possible regardless of value (or the real cost, as in this case) seems to be irresistable.
    But in the end it is the Managing Directors of the company who are responsible for the performance of their company. They are paid to stand up to the tender board, and to have a more robust tender strategy.

    Still. I would have hoped the Gov tender boards would have started to learn that a common strategy of tenderers is to low ball the bid, then renegotiate later, so in the end they often end up getting a low standard company who does a poor job, late, at greater cost than if they'd gone with a decent contractor in the first place!


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