Amid growing concerns regarding security and the fight once morest organized crime, Chile’s National Customs Service announced the acquisition of scanner trucks for ports and airports in 2023. This initiative aims to equip the country with advanced technology to detect illicit goods and substances without the need to open containers, thereby enhancing efficiency and security at maritime and land entry points.
The procurement process began amidst questions surrounding the work undertaken by previous governments and the current one regarding the perceived lack of urgency in this sensitive matter.
Funded by the Ministry of the Interior and the Chilean Budget Directorate (DIPRES), a tender was awarded in 2023 for three scanner trucks: two for the Tarapacá region and one for San Antonio. This contract was awarded to the Chinese company Nuctech, with each truck priced at $3,200,000,000. The trucks came with a five-year warranty and five years of post-warranty coverage at no additional cost.
Initially, the acquisition was met with positive feedback, with industry portals praising the “deal” as the global market values for acquiring and maintaining such advanced vehicles were significantly higher.
In 2024, the Ministry of the Interior allocated $4.2 billion for the purchase of two additional scanner trucks for the northern part of the country. Nuctech participated in the tender once more, adjusting its bid to the available funds, but reducing the warranty period to two years with two years of post-warranty coverage at no cost. This change in terms raised concerns regarding sustainability and long-term maintenance costs, as the annual maintenance of a truck ranges from $80,000,000 to $81,000,000 (including VAT), implying a total cost of $960,000,000 to cover the maintenance of two trucks for six years without warranty.
Next, a new tender was launched for two trucks, one for the Valparaíso region and another for the Los Lagos region, financed by DIPRES as Customs lacked the necessary budget. The allocated amount for this tender was $6,400,000,000. However, this tender was declared void because Nuctech submitted an increased cost for post-warranty maintenance, totaling over $7,000,000,000, exceeding the available budget.
In response to this situation, a new tender process was initiated with adjusted conditions aimed at favoring Nuctech. This decision sparked concern among Western countries, particularly the United States and the United Kingdom, whose representatives formally voiced their apprehensions. On February 8, 2024, Ambassadors Louise de Sousa (United Kingdom) and Bernadette M. Meehan (United States) sent a letter to the Minister of Finance, Mario Marcel, stating: “We would be grateful to you and your government for seeking the best, most solid, and most reliable technology possible for Chilean ports and airports. Several companies from the United States and the United Kingdom are interested in the current open tender for two mobile scanners.”
The ambassadors emphasized the importance of considering “companies whose solutions are in line with globally accepted trade standards” and cautioned once morest choosing suppliers solely on the basis of the lowest cost and unrealistic implementation timelines. They warned that “Selecting a supplier with a price below the market might lead to a situation where the successful bidder cannot fulfil the contract,” highlighting that this might lead to a new tender process with negative implications for cost, time, and security.
Despite these warnings, the Chilean government proceeded with the tenders without modifying the conditions, disregarding the recommendations of its strategic security partners. This decision generated tension and raised questions in diplomatic circles regarding the transparency of the tendering process.
The ambassadors’ letter went unheeded, and the new tenders were carried out according to the same guidelines, which was an open secret both within the security industry and among Customs workers, who alleged that the Chinese company was ultimately favored. During an investigation, both officials and individuals familiar with the internal situation expressed renewed doubts following Jorge Romo, Nuctech’s representative in Chile, was present during the public accountability of the organization’s director, Alejandra Arriaza, on May 10. This heightened suspicions as the individuals responsible for signing the tenders were the National Director of Customs, Alejandra Arriaza, and the acting national director, Gabriela Landeros.
Customs Service Response
When contacted by Radio Bío Bío, the National Customs Service affirmed that the tenders had been conducted in accordance with regulations:
“The tenders for Scanner Trucks (Major Non-Invasive Technology) have been carried out in accordance with the processes regulated by the Procurement Law and its respective regulations.
These tenders are public and international in nature, where their technical and administrative bases are reviewed and accepted by the Comptroller General of the Republic in compliance with the provisions of the law.
In January of this year, a request for information was sent to the market to confirm the technical and economic terms, in order to assess the budget availability and deadlines to be requested.
The tenders issued by the National Customs Service seek to meet the objective of strengthening control measures at our borders, in accordance with the budget established in the context of the fight once morest organized crime.”
Data leak
The security market in Chile has been expanding, encompassing companies specializing in armoring to global entities offering technologies like laser beam machines or other solutions aimed at enhancing security without compromising logistics.
In the West, particularly the European Union, the United Kingdom, and North American nations like the United States and Canada, there have been growing warnings concerning the choice of partners to prevent the leakage of information related to the movement of goods or logistics. Hence, the reaction of the two ambassadors did not come as a surprise to specialists in this field.
Many immediately recall the passport scandal during the Sebastián Piñera administration, where the production of documents had been entrusted to a Chinese company. At that time, France and Spain issued warnings that led the government to step back and cancel the tender. Ultimately, the French company secured the contract.
Chilean Customs’ Scanner Trucks Tender: Transparency Concerns
In 2023, amidst growing concerns regarding security and the fight once morest organized crime, Chile’s National Customs Service (SCN) announced the acquisition of scanner trucks for ports and airports. This move aimed to enhance efficiency and security at maritime and land entry points by utilizing advanced technology to detect illicit substances and elements without the need to open containers.
The Procurement Process
The procurement process commenced amid questions regarding the diligence of previous and current governments regarding this sensitive matter.
Through a tender financed by the Ministry of the Interior and the Chilean Budget Directorate (DIPRES), three scanner trucks were awarded in 2023: two for the Tarapacá region and one for San Antonio. This contract was granted to the Chinese company Nuctech, at a cost of $3,200,000,000 per truck, with a five-year warranty and five years of post-warranty coverage included at no additional cost.
Initial Success and Concerns
The initial procurement was generally met with approval, with industry portals commending the deal as the global market values for acquisition and maintenance of such sophisticated vehicles were significantly higher.
However, in 2024, the Ministry of the Interior allocated $4.2 billion for the acquisition of two additional scanner trucks for the northern region. Nuctech once more participated in the bidding process, adjusting to the available funds but reducing the warranty period to two years, with only two years of post-warranty coverage included. This adjustment raised questions regarding long-term maintenance costs and sustainability, as the annual maintenance of a truck is estimated to cost between $80,000,000 and $81,000,000 (VAT included), equating to a total six-year maintenance cost of $960,000,000 for two trucks, without warranty coverage.
A Void Tender
Subsequently, a new tender was launched, financed by DIPRES as Customs lacked the budget, with a total of $6,400,000,000 allocated for the purchase of two trucks: one for the Valparaíso region and another for the Los Lagos region. This tender was declared void following Nuctech presented an increased post-warranty maintenance cost, exceeding the available budget at over $7,000,000,000.
Diplomatic Concerns and Transparency Questions
In response to this situation, a new tender process was initiated with adjusted conditions seemingly favoring Nuctech. This decision generated concern among Western countries, particularly the United States and the United Kingdom, with their respective ambassadors officially raising their concerns. On February 8, 2024, Ambassadors Louise de Sousa (United Kingdom) and Bernadette M. Meehan (United States) sent a letter to the Minister of Finance, Mario Marcel, expressing their disquiet: “We would be grateful to you and your government for seeking the best, most solid, and most reliable technology possible for Chilean ports and airports. Several companies from the United States and the United Kingdom are interested in the current open tender for two mobile scanners.”
The ambassadors emphasized the importance of considering “companies whose solutions are in line with globally accepted trade standards” and cautioned once morest selecting suppliers solely based on the lowest cost and unrealistic implementation timelines. “Selecting a supplier with a price below the market might lead to a situation where the successful bidder cannot fulfil the contract,” they warned, highlighting the potential for a new tender process, negatively impacting cost, time, and security.
Despite these warnings, the Chilean government proceeded with the tenders without altering the conditions, disregarding the recommendations of its key security partners. This decision created tension and raised questions regarding the transparency of the tendering process within diplomatic circles.
Continued Questions and Nuctech’s Influence
The ambassadors’ concerns were ignored, and the new tenders were conducted under the same guidelines, a fact known both within the security industry and among Customs personnel. They alleged that the company of Chinese origin was favored. During investigations, officials and those privy to the internal situation expressed renewed doubts following Jorge Romo, Nuctech’s representative in Chile, was present at the public account of the organization’s director, Alejandra Arriaza, held on May 10. This heightened suspicions as the individuals responsible for signing the tenders were the National Director of Customs, Alejandra Arriaza, and the national director (s) of Customs, Gabriela Landeros.
The Customs Service Response
When contacted by Radio Bío Bío, the National Customs Service confirmed that the tenders had been conducted according to regulations:
“The tenders for Scanner Trucks (Major Non-Invasive Technology) have been carried out in accordance with the processes regulated by the Procurement Law and its respective regulations.
These tenders are public and international in nature, where their technical and administrative bases are reviewed and accepted by the Comptroller General of the Republic in compliance with the provisions of the law.
In January of this year, a request for information was sent to the market to confirm the technical and economic terms, in order to assess the budget availability and deadlines to be requested.
The tenders issued by the National Customs Service seek to meet the objective of strengthening control measures at our borders, in accordance with the budget established in the context of the fight once morest organized crime.”
Data Leak and Previous Controversies
Chile’s security market has witnessed growth, from firms specializing in armoring to global companies offering technologies like laser beam machines, aimed at enhancing security without compromising logistics.
As a result, Western nations, notably the European Union, the United Kingdom, and North American countries like the United States and Canada, have ramped up warnings regarding partnerships and potential information leaks regarding the movement of goods or logistics. In this context, the ambassadors’ reaction did not come as a surprise to specialists.
Indeed, many readily recall the passport scandal of the Sebastián Piñera administration, where a Chinese company was entrusted with the production of these documents. At the time, France and Spain issued warnings, prompting the government to back down and cancel the tender. Ultimately, the French company secured the contract.
