Allegations rejected by Wapda: TI-P expresses reservations over award of contracts

Business Recorder

ISLAMABAD: Transparency International – Pakistan (TI-P) has expressed its reservations on four contracts worth $ 6 billion awarded by Water and Power Development Authority (Wapda) in what it says “violation of PPRA Rules 2004.”

In a letter to Managing Director, PPRA, TI-P says that the complainant has “pointed out” illegalities/irregularities in support of its allegation.

The complainant has stated that since last two years Wapda does not have a permanent member and out of three members, there is no permanent member of Water and Power, yet during these two years four contracts have been awarded “in violation of PPRA Rules.”

The letter further says that Wapda and NESPAK are two organizations of Ministry of Water and Power Division. Secretary Power Division is also the Chairman of NESPAK. Secretary Ministry of Water is also the Board Member of PPRA which implies that awarding contracts to NESPAK amounts to conflict of interest.

According to TI-P the contract for consultancy services for construction design, construction, supervision and construction management of Mohmand Dam Project was initially invited in June 2017 under Quality and Cost Based Selection (QCBS) with the ratio of 80% for quality and 20% for cost to award the contract for the services. More than one bids were received, and after technical evaluation financial cost proposals were opened in the presence of bidders, in which the consortium of M/s NESPAK and M/s SMEC International submitted a bid of Rs. 4.34 billion which was the lowest bid. But the contract was not awarded and the tender was discharged by Wapda for unexplained reasons.

Wapda re-advertised by revising few RFP provisions, which were in violation of PPRA Rules 32, seeking fresh proposals based on Quality Based Selection (QBS). Resultantly, proposal of only one consultant was received. Other Consultants of Pakistan abstained from participation in submitting the proposals on QBS system with “manipulated” provisions as it was obvious that Wapda is “bent upon awarding the consultancy contract to a targeted Consultant at an abnormally higher price.”

The second tender was invited in Dec, 2018 on Quality Based Selection (QBS) method, and only one consortium of M/s NESPAK and M/s SMEC International submitted a bid on Feb 14, 2019, and the Evaluated cost of the bid was declared on PPRA Website to be Rs 7.68 billion. The contract was reportedly awarded on May 21, 2019 and news report published on May 22, 2019 stated Wapda signed a contract worth Rs 9.98 billion with Joint Venture namely Mohmand Dam Consultants Group (MDCG) for consultancy services for construction design, construction supervision and contract management of Mohmand Dam Hydropower Project.

Additional fee approved by Wapda, about 30% over the evaluated bid price, was Rs 2.3 billion. And additional fee of Rs 5.75 billion, was approved by Wapda over original First bidding price of Rs 4,23 billion.

According to PPRA Rules 2004, save as otherwise provided there shall be no negotiations with the bidder having submitted the lowest evaluated bid or with any other bidder.

TI-P is of the view that in last 20 years not a single supervision consultancy contract was awarded by Wapda on QCB method. On March 12, 2019 M/s Society for Advancement of Contracts and Arbitration vide letter No. Ref : SACA/ 53-1/27 also raised serious objections on Wapda for violation of country law to favour one party.

In May 2019, a complaint was filed with NAB against the award of this contract, and also a Writ Petition was filed before Lahore High Court on May 25, praying the court to issue a stay order against the award of the said contract.

Wapda filed a CMA in Supreme Court in which it was stated that it is clear from the cavalier attitude of the petitioner that somebody, if not he, is trying to create hindrance which will affect the smooth and timely construction of Mohmand Dam. It also speaks volumes about the modus operandi of the fourth generation warfare being used against the construction of a project of immense national importance.

The Evaluation Committee constituted by Wapda included an officer of the regulator, Public Procurement Regulatory Authority, as such the whole process became irregular. An officer of a regulator cannot be inducted where he regulates and monitors compliance. An extra fee of Rs 2.3 billion is being paid by Wapda, which is loss to exchequer.

Second similar contract is of Consultancy Services for Construction Design, Constriction Supervision and Construction Administration of Diamer-Bhasha dam project.

Tender for Consultancy Services for Construction Design, Construction Supervision and Construction Administration of DIAMER Bhasha Dam Project was invited in 2019. Due to Quality Based Selection (QBS) method used by Wapda , only one bid from consortia of M/s NESPAK was received on December 22, 2019. According to the Evaluation Report, the evaluated bid price advertised on PPRA website by Wapda was Rs 19.819 billion. However, it was reported in press that on May 21, 2020 Wapda awarded the consultancy contract of the project to Diamer Basha Consultants Group (DBCG), led by NESPAK, worth Rs. 27.182 billion ($168.8 million). As a PPRA officer was included in the Evaluation Committee of Mohmand DAM, the PPRA officer did not object to QBS method in this tender.

The third contract which has raised questions is construction of Mohmand Dam Project whereas fourth contract is of Diamer Basha dam project.

TI-P argues that the four contracts were awarded on single bid basis, “without determining the competitive rates which is a clear violation of rules.”

Transparency International Pakistan has requested the Managing Director to examine the complaint received at TI Pakistan and forwarded with its comments, questions and suggestions to check and inquire on the alleged ambiguities of tendered processes, and PPRAs own indulgence in the tendering award process, and additional fee being paid to NESPAK of Rs over 9 Billion, and his response on it.

When contacted, a spokesperson of Wapda made it clear that these allegations are fabricated, misleading and devoid of facts. He made it clear that Wapda has awarded the contracts for Mohmand Dam Hydropower Project and Diamer Basha Dam Project while strictly adhering to the relevant rules of the Public Procurement Regulatory Authority (PPRA) and the Pakistan Engineering Council (PEC) in a transparent manner and in accordance with the best practices that are observed worldwide for award of the contracts.

The spokesperson further said that these allegations appear to be a part of a smearing campaign being launched by elements/forces that have been opposing construction of these mega dams vital for progress and prosperity in Pakistan in their bid to detract implementation.

The spokesperson further stated that the process for procurement and construction of Diamer-Bhasha Dam and Mohmand Dam was triggered by the Supreme Court of Pakistan while taking cognizance of looming water scarcity crisis in the country; the court passed a historic landmark judgement of 4th July 2018. It directed “to take all necessary steps for the commencement of construction and early completion of Diamer Basha and Mohmand Dam projects”. For smooth execution of the projects, an Implementation Committee on Diamer Basha and Mohmand Dams (ICDBMD) was also constituted by the Supreme Court of Pakistan comprising representatives of the Federal Government and the Chief Secretaries of Khyber Pakhtunkhwa and Gilgit-Baltistan to oversee the entire process from concept to commissioning and to pave the way for implementation of the judgment of the Supreme Court.

Meanwhile, a smearing campaign commenced against these projects as well as Wapda through print and electronic media to malign Wapda and make the projects controversial. While taking cognizance the Supreme Court took another unprecedented step vide its orders of January 07, 2019 and January 09,.2019 respectively by constituting an implementation bench for transparent and timely completion and for the faithful execution of the projects.

The Implementation Committee on Diamer-Bhasha and Mohmand Dams (ICDBMD), having a well-defined follow-up mechanism, has been closely monitoring the progress on the two projects, while the progress reports have also been submitting regularly to the Implementation Bench of the Supreme Court.

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