22 May 2002
ERE contract awarded in accordance with WTO rules
The Kowloon-Canton Railway Corporation (KCRC) today (Wednesday) refuted an allegation of favouritism shown to Siemens in the award of the DB-1552 contract for East Rail Extensions station and depot telecommunications systems.
A KCRC spokesman said DB-1552 was awarded in full compliance with the World Trade Organization Agreement on Government Procurement which requires that an award must be made to the lowest conforming tenderer.
The spokesman said, "Siemens submitted a tender price of $133 million, which was about $13 million (9.8%) lower than the second lowest conforming bid and $17 million (12.8%) lower than the third lowest. All three prices were close to the Corporation’s pre-tender estimate.
"Since the Siemens bid had passed all financial and technical evaluations, the Corporation was obliged under the WTO rules to make the award to them. Afterall, overall Siemens performance on KCRC contracts was generally satisfactory at that time.
"The Corporation would be in breach of WTO rules and be open to challenge had we not made the award to Siemens at that time," the spokesman added.