Corruption on the rise in Pakistan: Transparency
Wateen Telecom 25 December, 2009

KARACHI: Pakistan in corruption has slipped to rank 42 from 47 as compared to 2008, said Transparency International in its report on Tuesday.

Pakistan 2009 Corruption Perceptions Index Score is 2.4 and out of 180 countries, its ranking as most corrupt country has slipped 5 ranks, from 47 in 2008 to 42 most corrupt country in 2009.

The CPI 2009 reveals the effects of corruption in the subcontinent, which is more alarming in Pakistan, as Bangladesh, which was the most corrupt country in 2001, 2002 and 2003, has improved its ranking from 38th most corrupt country in 2008, to 42nd most corrupt country in 2009.

Highest scorers in the 2009 CPI are New Zealand at 9.4, Denmark at 9.3, Singapore and Sweden tied at 9.2 and Switzerland at 9.0. These scores reflect political stability, long-established conflict of interest regulations and solid, functioning Public institutions.

Chairman TI Pakistan Syed Adil Gilani said TI Pakistan is of the view that terrorism is the direct result of poverty and anti-corruption efforts in the country had taken a 180 degree turn since Gen (Retd) Pervez Musharraf issued the national reconciliation ordinance.

He said the positive impacts will be visible next year of the few steps of good governance taken during last one year of the restoration of Judiciary by the Prime Minister Syed Yousuf Raza Gilani, declaration of Judiciary by the Chief Justice to be Zero Tolerance for Corruption and withdrawal of draft NRO bill from National Assembly on strong protest of opposition of parties and civil society.

Transparency International Pakistan also congratulates Pakistan Army, which has proved to the world that Pakistan Armed Forces are the best. The elimination of terrorists in Swat in two months by Pak Army is what USA and NATO forces failed to achieve in 8 years in Iraq and Afghanistan, which has made Pakistan a proud nation, he said.

Army Chief has also taken up seriously violation of Public Procurement Rules by DHA and Armed purchases, and advised to follow the rules, which is a healthy sign and warning for those who are violators of rules but the government is governing Pakistan without governance and Pakistan has lost credibility all over the World, due to which the country is facing serious economic threats,, poverty, inflation, food & electricity shortages and increase in unemployment, which are direct results of the massive on going corruption.

He said that the government must make serious efforts to apply rules and regulation across the board, to achieve the goal of reducing corruption.

He said Pakistan need immediate enforcement of good governance and transparent administration, to counter the acute problems, of billion of rupees corruption scams reported in Pakistan Steel, TDAP, EOBI, PIA, Rental Power Plants, KESC, NIC, NHA, OGDC, PSO, PEPCO, CDA, DP Division, DHAs, Pakistan Steel TCP, NBP, PC, and many other organizations.

Political will of the government to fight Corruption is urgently required and must also be seen by public and donor countries, he said. All land scams of Punjab, CDA NWFP, Sindh ( specially like gutter baghicha, unauthorised allotments by Nazims, fraudulent change in land records by revenue officers ) , reported in last one year in Media shall be investigated by a Judicial Tribunal, and all Land records shall be computerized within one year, he said.

He said Pakistan also requires immediate action through a surgical operation on review and cancel the appointments and promotions not made on merit, and extension of services or reappointment after retirement, remove from the key public offices those who are facing corruption charges, and implementing the effective non-discriminatory accountability mechanism for those civil/defence departments not complying with the procedures including privatization, transparent implementation of rules by regulatory authorities, SECP, CCP, PPRA, EPA, SBP, OGRA, PEMRA, PTA, PFRA etc in order to restore donors agencies, IFIs and investor’s confidence.


Procurement of energy saver bulbs: TIP disputes Pepco’s explanation
Business Recorder 24 December, 2009

KARACHI (December 24 2009): Transparency International Pakistan (TIP) has disputed the explanation given by Pakistan Electric Power Company (Pvt) Ltd (Pepco) regarding procurement of energy saver bulbs at 100 percent high market rates for free distribution.

Syed Adil Gilani, Chairman of TIP, in a letter sent on December 22 to Pepco Managing Director Engr Tahir Basharat Cheema, reiterated that the clarification of Pepco to Public Procurement Regulatory Authority (PPRA) and TIP "does not satisfy the requirement of PPRA rules, as well as Planning Commission procedures of PC-1".

Engr Zaffar Zuberi, Chairman of Institution of Engineers Pakistan (IEP), had also written a letter to the Prime Minister, with copy to the President of Pakistan. President’s Secretariat (Public) subsequently referred the same to PM Secretariat with the noting "for such action as deemed appropriate in the matter."

TIP’s stand is that national Compact Fluorescent Lamps (CLFs) program of distribution of 30 million energy saver bulbs, free of cost, in exchange of 4×100 watt incandescent bulbs, is an unworkable scheme. TIP’s concern is: where will the incandescent bulbs be stored and what will happen to them? Who will check reliability of distribution by KESC and other distribution companies (discos)? When incandescent could be bought at Rs 10-15 from market, and replaced with energy saver bulbs?

IEP had carried out a research in Karachi market and what it found is quite interesting. There is no duty or sales tax on import of energy saving lamps. The landed cost (including clearing) for 25 watt, top quality, spiral lamp comes to $1.15 or approximately Rs 100/ per energy saving lamp.

The 15- and 18-watt lamps are about 10-20 percent cheaper. IEP did not know the quality of lamps government intends to import. IEP said that if the government wants to save energy and money it should purchase these lamps directly from the manufacturers in China, as 90 percent of the world production is manufactured in China. "We will save millions of rupees if we buy in bulk. An open international tender would be welcomed by all. We could involve our embassy for transparency’s sake."

Pepco’s explanation is that the national CFLs program aims at procurement of 30 million high quality CFLs/energy saver lamps through international competitive bidding (ICB). In the project, a very transparent process of bidding, evaluation and award has been built in to ensure transparency and competitiveness under the procurement guidelines of PPRA and the Asian Development Bank (ADB), which is financing this project under its Energy Efficiency Investment Program (EEIP).

Similarly, according to Pepco, a very comprehensive and transparent process has been built in for distribution through Pepco distribution companies (discos) and KESC to the domestic customers all over Pakistan, free of cost, in exchange of 40-100 watt incandescent bulbs. The whole process of distribution has in-built monitoring and tracking system approved by ADB and which is to be supervised by ADB implementation consultants.

It is also envisaged that the prices likely to emerge out of the competitive process would be much less than the ones for the substandard products but seemingly similar being sold in the market. The ICB tenders for procurement of first round of 10 million CFLs are scheduled to be opened on December 30. In view of the above fact, it is seen that a hype has been created in the media without any cogent and visible reason, Pepco said.

Cheema assured the Chairman of PPRA and TIP that Pepco and Ministry of Water & Power stand for transparency, fairness and accountability and adherence to the rules for implementation of the power sector projects and all the policies are directed towards that.

TIP’s stand is that the association of ADB does not mean that Government of Pakistan should incur 100 percent higher expenditure on this procurement. The energy saver bulbs, available in the market, have manufacturer’s warranty of 18 months from the date of shipment, and shopkeepers give 12-month warranty. Standard harmonic distortion is a requirement of European countries as they use highly electronic gadgets. Even adding these two requirements would add to the cost by 2-3 cents only.

In fact, Pakistan needs high voltage fluctuation energy saver bulbs due to irregular energy supply, which the current available energy saver bulbs of Philips and Osaka are reported to comply. The reasoning of Pepco for better specification is not valid and contradicts PPRA Rules for making difficult conditions under Rule No 10 and 32.

Specifications shall allow the widest possible competition and shall not favour any single contractor or supplier nor put others at disadvantage. Save as otherwise provided, no procuring agency shall introduce any condition, which discriminates between bidders or that is considered to be met with difficulty. In ascertaining the discriminatory or difficult nature of any condition reference shall be made to the ordinary practices of that trade, manufacturing, construction business or service to which that particular procurement is related.

TIP has suggested that Prime Minister’s directives to approve the procurement, based on incomplete information, needs to be reviewed, in view of the complaints and above mentioned details, and directive of the President of Pakistan issued on December 18. Further, TIP requested Pepco that in view of the President of Pakistan’s directive to the Prime Minister, to postpone the tender of first round of 10 million bulbs tender by a few weeks, till such time as Prime Minister takes final action on the President of Pakistan’s directive.


$2 billion container terminal project: KPT accused of bypassing PC, ECC
Business Recorder 22 December, 2009

ISLAMABAD (December 22 2009): The Planning Commission has unearthed irregularities in Karachi Port Trust (KPT), which has commenced work on two-billion dollar new container terminal without the approval of the Planning Commission (PC) and Economic Co-ordination Committee (ECC) of the Cabinet.

The Planning Commission constituted an eight-member task force on maritime industry in December 2008 with a mandate to propose appropriate amendments to the Merchant Shipping Ordinance-2001 and other relevant legislation.

Sources told Business Recorder on Monday that the Planning Commission’s task force on maritime industry, in its report, revealed that the KPT authorities had initiated work on container terminal to 18-meter draft before deepening existing harbour and repairing non-operational berths without the approval of the PC and the ECC.

"The KPT Act forbids spending of money outside port operations, but it has spent on schemes like Clifton underpass, beauty fountain, Korangi flyover etc," the report revealed, and recommended that the KPT be stopped from spending on such projects.

The report also identified problems, being faced by the KPT, including rupees six billion cost of a golden handshake for the 3,000 employees of the Karachi Dock Labour Board (KDLB). Keeping them on board is costing the KPT rupees two billion per annum on salaries. However, the employees and management are engaged in conflict over large-scale retrenchment. "There are no political risks, but employees simply use scare tactics to frighten the ministers," the report said.

The report added that as many as 11 berths were non-operational and the KPT was not complying with landlord port concept. "The KPT is meant to be a non-profit trust, but its profit had surged to Rs 52 billion, it said, adding that the profit last year stood at rupees seven billion.

The report said the KPT had spent hundreds of millions on flotilla with 500 employees violating the government policy. The KPT had not been supportive of Pakistan flag craft and companies, but it had awarded expensive contracts in foreign exchange to foreign flag companies.

The report has made the following recommendations:

— Enforce provisions of Trust Act.

— Enforce landlord port concept for harbour craft.

— Repair all berths and deepen port to 14 meters before building a new terminal.

— Abolish KDLB through the golden handshake.


Gross violation of rules in compressor purchase
Dawn 22 December, 2009

ISLAMABAD: The Auditor-General’s department has identified gross legal and procedural violations in the procurement of a $22 million compression system for the Qadirpur gas field and asked the petroleum ministry to constitute a committee to investigate why rules of the Public Procurement Authority were not followed.

The ministry has been asked to find out the individuals who violated rules in the procurement of compressors and to adopt remedial measures to avoid such purchases in future.

Documents suggest that besides contractual issues, a number of procedural and legal changes were made in the taxation and import mechanism as a special case.

An inordinate delay in installation of compression facilities has raised fears that the country’s third largest field could collapse in five months unless the system is put in place to maintain wellhead pressure.

The procurement process came under media criticism because the contract for the supply of 14 compressors had been awarded in violation of rules to a US company in which a member of the Bhutto family holds a senior position. The contract price, though much lower than original estimates of project consultants, was revised three times.

The auditor-general has concluded that the manner and time in which the contract was finalised and executed ‘proved that the equipment were not of proprietary nature and were required to be procured through proper advertisement in national/international newspapers which was not done. Hence the company was deprived of the benefits of competitive rates.’

While observing the violation of procurement rules, it sought a detailed response from the Oil and Gas Development Company (OGDCL) before it submitted the proposed draft to the Public Accounts Committee. The contract for 14 compressors and spare parts was recently awarded by the OGDCL to the Valerus Company of the US through selective invitations, instead of open tendering as required under the procurement rules.

The OGDCL had invited tenders from four bidders through email in July last year without observing its procurement rules, although there was sufficient time for international tenders. Under the OGDCL procurement rules, sealed bids should have been invited through international tenders. ‘For emergent requirements a gallop international tender should be floated, giving a maximum of 10-15 days for submission of bids. For other than emergent requirements, a minimum 40-60 days time will be allowed for submission of bids,’ the department said.

Consultants hired by the OGDCL did not follow the rules despite the fact that it took more than 15 months to award the contract through selective invitation. The Public Procurement Rules of 2004 also require all procurement opportunities to be advertised in the print and electronic media and the posting of the tender on the company’s website, but none of these requirements was fulfilled.

The department pointed out that at least four local and international companies having experience in procurement and installation of compression facilities had approached the OGDCL management to take part in the bidding, but were not given the opportunity despite the fact that they had offices in Islamabad and had supplied similar equipment and material to the company in the past.

It said the consultant appointed by the OGDCL for awarding the contract had recommended purchase of the compression package at $58.64 million. The amount was reduced to $33 million for 14 compressors along with liquid handling system and a wellhead cooling system for all 29 wells. ‘The managing director, OGDCL, thus approved the purchase of 14 compressors along with accessories at $33.014 million from the Valerus Company, USA, in February 2009,’ the audit objection said. The scope of the package was further reduced to $21.9 million and an agreement with the firm was executed in May.


Multi-million dollar scam brewing in OGDC
The News 21 December, 2009

ISLAMABAD: A multi-million dollar scam is in the offing in the Oil and Gas Development Company Limited (OGDCL), which is all set to hire rental drilling rigs from a select group through a 15-day domestic tender instead of floating one-month international tenders.

“The OGDCL is violating Public Procurement Rules while giving our domestic tenders as there might be some foreign merchants offering prices lower than what these 3-4 selected ones are all set to get through their own terms and conditions,” sources maintained.

OGDCL spokesman Basharat Mirza, when approached for a comment, consulted his seniors and came up with a version that the company was hiring the drilling rigs services through domestic tender notice in accordance with the rules and regulations rather than violating them.

“We need the drilling rigs services within the shortest possible time so as to meet the targets well within time, and the services are available in Pakistan and there is no need to float international tenders,” OGDCL spokesman Mirza said.

A copy available with this correspondent, the Public Procurement Regulatory Authority (PPRA) Ordinance governs procurement in state departments but the company is hiring one deep and two medium depth capacity rigs to drill wells collectively involving US$32 million for one year.

“Under no circumstances, the response time shall be less than fifteen working days for national competitive bidding and thirty working days for international competitive bids from date of advertisement or notice. All advertisement or notices shall expressly mention response time allowed that particularly procurement,” sources read the violated PPRA clauses (13).

They elaborated that the OGDCL advertised tenders on December 9, fixing December 18 as the closing date and December 24 for bids submission as four official weekly holidays passed and the 15 days time expired on December 28, an edge for the three companies already working in Pakistan.

“The PPRA rules are grossly violated and the whole process is restricted to only three companies engaged in Pakistan as all of them will get contract for the three rigs,” the source revealed.

One deep drilling rig will cost the OGDCL US$35,000 per day and two medium depth capacity rigs would cost US $25,000 daily, thus making US$32 million or Rs 3 billion in one year approximately.

General Manager Supply Chain Management Department (SCMD) of OGDCL Khalid Jameel, who according to sources had opposed domestic tendering, when contacted by this correspondent said that his department worked like a post office. “We have to complete the targets within the current fiscal and that is why we are in a hurry to hire services. Representatives of almost all international companies are sitting in Islamabad and they can also approach us,” he responded when asked about the urgency.

He wondered why the OGDCL should advertise this material’s availability in international market when it was available domestically and readily. “And that we have not invited just one part but have invited all readily available drilling rigs.” According to sources, the OGDCL has succumbed to a sort of pressure, may be political, through a lobby to award contracts to three companies having drilling rigs. One of them will get US$35,000 per day contract and the other two will get US $25,000 per day for medium depth rigs.

OGDCL spokesman Mirza and GM-SCMD Jamil had no satisfactory answers when asked that only working days were considered in 15 or 30 days notices. “I do not know which person is behind all this exercise as I repeat my sentence that we work as a post office,” the GM-SCMD OGDCL responded when asked about any political pressure for a decision in haste.

The OGDCL sources, however, said terms and conditions of tender were to support specific vendors as it mentioned rigs must be readily available in Pakistan. “Actually, advertisement was given after finalising arrangements with the favourite parties, just for documentation.” They said five rigs were available with the favourite parties and the tender was given in a limited way, overruling fair competition, so that they could easily get a better deal.


SC orders Makro to vacate playground
Dawn 19 December, 2009

ISLAMABAD: The Supreme Court has ordered a wholesale giant in Karachi to close down its huge commercial outlet in the Lines Area in three months and restore the 4.9 acres of land on which the structure was built to its original status of a playground.

‘Makro-Habib is allowed three months from the date of this judgment to remove its structures and installations from the playground, restore it to the same condition as existed on the date of the sub-lease and hand over its vacant possession to the city district government, Karachi (CDGK),’ a bench comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Jawwad S. Khawaja and Justice Ghulam Rabbani ordered in their judgment on Friday.

The court had taken suo motu notice of the matter on the basis of an article published in Dawn titled ‘A plea to the Lord Chief Justice’, by columnist Ardeshir Cowasjee.

The 32-page verdict authored by Justice Khawaja ordered the city government to develop and maintain the land as a playground or use it for any other purpose permissible under the law.

‘The playground was and will remain an amenity plot falling within the jurisdiction and zoning/regulatory control of the CDGK,’ it held.

It said the federal government, acting in the name of former president Pervez Musharraf, had no legal authority to grant leasehold rights to the Army Welfare Trust (AWT) which later sub-leased the land to Macro-Habib Pakistan (MHPL) to build a cash and carry wholesale outlet.

The court cancelled the lease granted in 2002 in favour of the AWT and also sub-lease of the land to Makro-Habib in July 2006.

The land measuring 4.958 acres is situated in a central and densely populated area of Karachi.

During the proceedings, Karachi-based NGO Shehri, citizen Mehfoozun Nabi and the CDGK contended that the land stood transferred to the city government and was a designated amenity plot dedicated for use as a playground in the master plan for the Lines Area Project.

The government, the AWT and Makro-Habib relied on the Dec 19, 2002, deed whereby the former president had granted lease of the land to the AWT for 90 years at the annual rent of Rs6,020. On July 31, 2006, the AWT transferred the land to Makro-Habib by way of sub-lease for an initial term of 30 years after receiving an advance rent of Rs100 million based on a variable annual amount of at least Rs17.5 million and a maximum equivalent to one per cent of the annual turnover of the outlet.

The court said the AWT, which was also an NGO, had been granted the government land in a wholly opaque and non-transparent manner without any regard to financial interests of the government and without an open invitation to bidders, which could not be treated as a legitimate and permissible exercise of executive powers.

It said the AWT had been set up for a laudable objective of welfare of serving and retired personnel of the armed forces and their families, but it must be achieved through permissible means and not at the expense of the state exchequer or the public at large.

‘This guiding principle must inform all decisions taken by state functionaries in the performance of their official duties. This court has repeatedly emphasised the need for state functionaries to act in furtherance of the public interest, as they are fiduciaries ultimately responsible to their paymasters who are the people of Pakistan.

‘Unfortunately, in the present case we see that the concerned administrative functionaries have been seriously remiss in the performance of their duty to protect the public interest, whether in the form of providing amenities to the people or of safeguarding the state’s financial interests arising from the transfer of rights in state property.

‘The people of Pakistan have been blessed with a Constitution and aspire, despite difficulties, to constitutional rule. The Constitution, we can say with certainty, is imbued with an ethos and guiding spirit which underpins it and obliges the organs of the state and their functionaries to act in conformity with such guiding spirit.’

The MHPL issued a press statement saying it had always respected the laws of the country and any ruling of the Supreme Court.

‘Makro had all along assumed, in all good faith, that the AWT had lawfully obtained the lease from the defence ministry and invested Rs800 million to set up a store in a backward, depressed and slum area.

‘This store provides employment to about 350 families and has played a major part in the economic revival of that highly depressed and slum area,’ it said.

Now that the store might have to close down, it said, those families would be out of employment, but it respected all judicial verdicts, especially of the Supreme Court, and would implement the decision.


Departments seek TI help to eradicate corruption
Business Recorder 19 December, 2009

ISLAMABAD: Just see how the Supreme Court’s deadly strike on the NRO has had a snowball effect: the government departments notorious for corruption have started contacting Transparency International for help in eradicating corruption, realising devil-may-care days are over.<>

As the court’s decision dealt a deathblow to the licence-to-continue-corruption ordinance late Wednesday, the following day emerged as a “new-age resolution”. Transparency International received calls from as many as six departments requesting time and advice on eradication of corruption. “It’s a revolution,” said Chairman Transparency International Pakistan (TIP), Adil Gillani, reacting to the impact of the verdict. Gillani said he spent the day taking calls from senior officers of different departments having longstanding record of corruption. The TIP in its annual report this year had singled out a list of departments notorious for scams and massive irregularities.

They are Pakistan Steels, TDAP, EOBI, PIA, Rental Power Plants, KESC, NIC, NHA, OGDC, PSO, Pepco, CDA, DP Division, DHAs, Pakistan Steel TCP, NBP, PC, and many other organizations. Among them those who approached the TIP after the verdict on the NRO are Pakistan State Oil, Pakistan International Airlines, Trade Development Authority of Pakistan, Port Qasim Authority, National Insurance Corporation and Ministry of Commerce & Trade.

The corruption in these departments is mostly in the awards of tenders. According to the TIP report, 49 per cent corruption in the public sector departments is in the tenders’ award where no transparency is observed as the contracts go to those linked to the authorities. According to the TIP National Corruption Perception Survey 2009, which was released in June, out of the overall bribe paid in 10 sectors, “bribe in tendering amounted to 49 per cent.”

Asked if the TIP would coordinate with these departments for the eradication of corruption, Gillani said efforts were already underway by a committee set up by the prime minister to form an effective policy. He said his organisation had offered its services as an independent valuator to vet the tender award of more than Rs 50 million to avoid manipulation and violation of rules in tendering process.

Corruption in Pakistan increased in one year of the PPP government and the Transparency International ranked Pakistan 42nd among the world’s most corrupt countries against 47th last year. Pakistan’s 2009 Corruption Perception Index (CPI) score was 2.4, ranking it at 42. Against this, Bangladesh has marginally improved its position, also ranked 42nd against 38th last year. India has been at the 84th position. According to the Transparency International ranking, the higher the position of a country on the list the better is its integrity account and lesser corruption. Countries scored highest in the 2009 CPI are New Zealand at 9.4, Denmark (9.3), Singapore and Sweden tied at 9.2 and Switzerland at 9.0, reflecting political stability and long established conflict of interest regulations.

According to Gillani, anti-corruption efforts in Pakistan had taken a 180-degree turn since the president Musharraf issued the NRO in October 2007. The NRO, which had granted immunity to politicians, military officers and bureaucrats charged with corruption, enabled the exiled prime minister Benazir Bhutto to return home.


Corruption and PPRA
Business Recorder 17 December, 2009

EDITORIAL (December 17 2009): a conference titled ‘Accountants for Business’ speakers noted a well-known and highly disturbing fact: rampant corruption in the tax department has led to a decline in the tax to Gross Domestic Product ratio – a ratio long-considered to be a reflection of not only corruption, but also the lack of commitment by the country’s legislators, as well as the executive to tax the income of the rich.

Concerns about the appallingly low number of income tax payers have been voiced repeatedly at such conferences as well as by donors, including the International Monetary Fund, and yet it is largely the salaried people who constitute the bulk of the contributors to income tax collections in Pakistan. Thus, there is general public support for the need to raise taxes and raise them in a manner that is considered fair and equitable by the populace.

Many in Pakistan, so used to high levels of corruption, are simply not aware of the fact that corruption itself imposes a tax on the common man. A study undertaken in March 2009 by the head of the political science department at the University of Illinois in Chicago referred to a "corruption tax", which he defined as the extra money Illinois residents pay because of dishonest public officials.

He further clarified that this tax is payable by the general public when ‘politicians give government jobs to unqualified cronies and contracts to expense-padding donors. They pay when public employees take bribes to overlook violations, when law enforcement spends millions prosecuting crooked politicians and when people are injured because of government misconduct’.

This definition must bring to mind numerous ongoing hearings of cases in Pakistan that are currently sub judice. Speakers at the conference revealed that a little less than 50 percent of all corruption in Pakistan emanates from abusing the rules and regulations in public procurement of goods and services.

The Public Procurement Regulatory Authority (PPRA) is an autonomous body endowed, according to its website, "with the responsibility of prescribing regulations and procedures for public procurements…and has the responsibility of monitoring procurement by public sector agencies/organisations and has been delegated necessary powers under the Public Procurement Regulatory Authority Ordinance 2002."

The allegation is that corruption can be mainly sourced to violation of PPRA rules by ministries and state-owned enterprises. It is, therefore, critical for the government to strengthen PPRA’s oversight capacity and to endow it with enforcement capacity. This would require a major overhaul of the existing board of the PPRA, which includes the sitting finance secretary as the chair and five sitting secretaries from six ministries as members.

There are only three private members who are also nominated by the federal government. PPRA’s charter allows for a decision to be made on the basis of a majority vote which allows the bureaucracy to overrule any legitimate procurement concern. The PPRA charter also allows for exemptions, a fuel for the corrupt.

To ease these concerns, it is proposed that the PPRA be ring fenced with financial and administrative autonomy and its board of directors be appointed from outside the government, with the approval of a Parliamentary bipartisan committee.

The Managing Director and other senior department heads, are appointed and made answerable to the Board of Directors only. PPRA must also have its investigation and prosecution branches while rejecting any interference from the executive, judicial or parliamentary pillars, as persons in all the three are involved in spending taxpayers’ money.


TIP accuses NICL of PPR violations
Business Recorder 16 December, 2009

KARACHI (December 16 2009): The National Insurance Company Limited (NICL) has been accused of blatant violation of Public Procurement Rules (PPR) 2004 in inviting tenders for procurement of 100-200 acres plot for housing society and 4000-10000 sq yds plots for commercial development in Islamabad, Karachi and Lahore. This is "in total violation of PPR-2004," according to Transparency International Pakistan (TIP).

Syed Adil Gilani, Chairman of TIP, in a letter sent to the Chairman of NICL, Karachi, has reminded him that TIP had been objecting for last many months "on your procurements" and these objections were also sent to NICL by Public Procurement Regulatory Authority (PPRA) for clarification. NICL has not yet justified its actions are in compliance with PPRA rules.

It has been reported that the amount of these alleged mis-procurements, listed below, under PPRA rule No 50 ranges from Rs 3 billion to Rs 5 billion, Gilani said in his letter.

— Selection of consultants for Heating, Ventilation & Air-conditioning (HAVC) works.

— Award of HAVC contract to Roma Business Consultants, reported at Rs 120 million higher cost, against consultants recommendations and also not to a licensed contractor.

— Purchase in 2009 of office space in Dubai, and

— Purchase in 2009 of plots in Lahore.

The violations being committed by NICL in the current tender for procurement of land have been itemised as follows:

— Rule 13 requires minimum 15 days time for submission of tender after tender notice is published in the press, whereas, NICL has allowed only seven days.

— Tender documents shall be issued under rule no. 23 which shall include all relevant information including detailed evaluation criteria, bid award method, signing of integrity pact, rights of bidders for compliance on evaluation report prior to award, declaration of evaluation report before the award of contract etc. NICL is not complying with this requirement.

— Under rule no. 29, NICL shall formulate unambiguous evaluation criteria and inform bidders, and under rule. 30, the bid will only be evaluated in accordance with the declared evaluation criteria. NICL by not announcing any evaluation criteria is reported to be manipulating the procurement, which if correct, has to be dealt with under rule 2(i) corrupt and fraudulent practices.

In accordance with PPR 2004, rule 11, NICL is required to provide clear authorisation and delegation of powers for different categories of procurement, and shall only initiate procurements once approval of the competent authorities concerned has been acquired.

Gilani said TIP would like to know whether NICL has complied with rule no. 11 and taken approval of authorisation from the competent authority including condo nation/exemption from compliance of relevant PPR 2004 (be it Board of Directors or PPRA under the Rules of Business), in case of previous four procurements mentioned above and from the violations in the present procurements.

Procurement rules 2004 have eliminated all discretions in procurement process and made corruption low profit and high risk business, Gilani said. Copies of the letter have been sent to:

Prime Minister’s secretariat, Chairman, PAC, National Assembly, Auditor General of Pakistan, Chairman, NAB, Registrar, Supreme Court of Pakistan, Managing Director, PPRA and NICL Board members who have been reminded that "you all as Directors of NICL are public servants within the meaning of section 21 of the Pakistan Penal Code, and accountable for public funds expenditure, under NAB Ordinance 1999.


Cut in govt expenditures Fiscal space needed to meet NFC commitments: Tarin
Dawn 15 December, 2009

ISLAMABAD, Dec 14: The federal government will have to create fiscal space to meet its National Finance Commission commitments, according to Finance Minister Shaukat Tarin.

According to Mr Tarin, reducing ministries, good governance and transparency in government functioning were crucial for measures to reduce government expenditure.

Addressing a press conference here on Monday, he said that the government had increased the provinces’ share in the divisible pool by Rs174 billion and another Rs43 billion on net hydel profit, gas development surcharge and sales tax on services.

According to him, the government will need an additional Rs217 billion for the undertaking.

A direction had been set and it needed to be implemented in letter and spirit, Mr Tarin said.

The foremost task, he said, was to increase tax-to-GDP ratio from 8.9 per cent to 13.9 per cent and in the long run between 15 and 20 per cent.

“This is a major challenge and will have to be achieved.” “We have … enlarged the size of the cake instead of envelope.” The federal government, he said, should curb major expenses, including the fleet of luxury vehicles.

“Health and education are provincial subjects and such ministries at the federation level should be shut down,” he said.

Leakages in federal government institutions should be plugged, Mr Tarin said, adding that the cabinet would soon take up the austerity committee’s recommendations.

Similarly, the committee on good governance will firm up its recommendations in two weeks.

“In view of its importance, we will have to take quick actions.” The committee’s proposals are based on a Gallup survey carried out by the government to determine public expectations about government austerity.

Provinces, he said, should start building capacity to utilise enhanced funds.

”It is now up to the provinces (to) focus on health, education, poverty and infrastructure.” The federal government, he said, would have to increase sales tax and GST collection.

According to figures presented by him, the government was losing between Rs2.25 billion and Rs2.5 billion in public sector organisations like Pakistan Railways, PIA and Steel Mills.

Mr Tarin said taxation system alone accounted for losses amounting to Rs350Rs500 billion, adding that leakages in the Federal Board of Revenue (FBR) were as high as Rs500 billion.

The federal government, he said, was providing a subsidy of Rs55 billion to distribution companies.

“Revenue losses can be plugged through good governance and transparency.” He urged the provinces to enforce tax on agricultural income, sales tax on services and capital gains tax on real estate.

“Tax on agricultural income will be in the range of 23 per cent of GDP.” On the issue of VAT enforcement, Mr Tarin said that it would make sales tax system more efficient because collection of VAT on goods will be the responsibility of the federation while provinces would levy VAT on services.

“Three provinces do not have the capacity to enforce VAT and … the federal government has offered to help them.” In order to move towards providing financial autonomy of provinces, the finance minister said, the federation had reduced collection charges from 5 per cent to 1 per cent.


Procurement of GRP pipe for PQA: Prime Minister secretariat forwards complaint to TI
Business Recorder 15 December, 2009

KARACHI (December 15 2009): The Prime Minister secretariat has intervened to resolve the complaint regarding procurement of GRP pipe for Port Qasim Authority (PQA) by Frontier Works Organisation (FWO) at a higher rate from Iran than the price quoted by a Saudi company in its tender documents. The complaint has been forwarded to Transparency International Pakistan (TIP) by PM secretariat to deal with the issue as per the terms of the Memorandum of Understanding (MOU) signed by them with PQA.

The Saudi company, Amantit Fiberglass Industries Ltd (AFIL), had complained that its GRP pipe was not being approved by the client/consultants for PQA eastern industrial zone project executed under two separate contracts by FWO and National Logistic Company (NLC). Following the receipt of complaint from PM secretariat, TIP examined it in co-ordination with the consultant and PQA.

The consultant, Engineering Consultants International (Pvt) Ltd (ECIL), based on the tender documents, specifications and conditions of the contract, agreed with the submissions of AFIL and approved the GRP pipe and informed FWO accordingly. The quotation for the GRP pipe for FWO work was submitted on August 23, 2009 for the full package of pipe and fittings for Rs 429.337 million.

Adil Gilani, Chairman of TIP in his letter sent on December 12 to Brigadier Saeed Qadir, Commander, Karachi, FWO, and brought to his notice that FWO, being a government organisation, is required to observe the Public Procurement Regulatory Authority Rules for procurement through competitive bidding process. TIP noted from the PPRA website tender by FWO for purchase of fire tender, short crete machine and broom sweeper, which is in compliance of PPRA Rules 2004.

The principles of procurement clearly state that procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical.

Gilani said: "It has been reported to TIP that FWO has either purchased or (is) in the final stages of purchase of the said GRP pipe at higher cost of approximately Rs 610 million from M/s. Farassan Manufacturing & Industrial Company, Iran. The consultants have stated in their letter of November 23, 2009 to FWO that they have visited the factory in Iran and inspected the pipe in the third week of November."

TIP has requested FWO to clarify whether the procurement has been made at 40 percent higher cost than the cost quoted by the approved supplier AFIL, and if so, provide to TIP copies of the evaluation report, tender notice, contract agreement, integrity pact under rule no. 47 and evaluation form submitted to National Accountability Bureau (NAB).

"If the complaint is not true, we request FWO to please follow the rules and conduct procurements according to the provisions of PPR 2004, and under rule no. 50, any violation of these rules may render the procurement as mis-procurement." Copies of the letter have been forwarded to PM Secretariat, COAS, Chairman, PAC, National Assembly, Auditor General of Pakistan, and managing director PPRA


Transparency International ranks Pakistan as the 42nd most corrupt state in the world
Beyond individuals
Dawn Editorial
13 December, 2009

Asma Jehangir, the HRCP chairperson, was not off the mark when she pointed out that the real threat we face comes from institutionalised corruption that is wreaking havoc in the country. Corruption has been identified as a major scourge that has adversely affected the quality of governance, the state of the economy and the level of social justice available to the people. Indeed Transparency International ranks Pakistan as the 42nd most corrupt state in the world.

Conventionally, corruption is linked to what individuals do to gain unfair advantage — indulging in financial malpractice and granting favours in violation of the rules to derive personal benefits. But so focused are we on personalities and their sins that we tend to overlook what is termed as institutionalised corruption.

Although it may also benefit individuals working for an organisation that indulges in wrongdoing, this form of corruption is more dangerous. In the case of institutionalised corruption, even if an individual who has benefited from it is penalised and sacked corruption will continue unchecked in the organisation he has worked for as his successor will step in to gain from the wrong tradition. Besides, institutionalised corruption is more difficult to root out as it is inbuilt and comes to be accepted by other institutions. The other problem is that it creates conditions in the concerned organisation that perpetuate malpractices, enabling it to extend its reach to interacting institutions and pull them into the circle of corruption.

Examples of institutionalised corruption in Pakistan have existed since the country was created. However, in the initial years it was not so widespread. Over the decades, corruption has grown phenomenally and various institutions have benefited from it. While the bureaucracy has overstepped its powers and parameters, the judiciary has condoned the wrongdoings of the army which has had no qualms about staging coups to overturn civilian dispensations. Many institutions have relied on power wrongfully seized to frame rules that have brought monetary advantages to their members who have then resorted to protecting corruption as this has suited their vested interests.


Awan, Pirzada called to answer queries, NAB tells SC
Dawn 12 December, 2009

ISLAMABAD, Dec 11: The National Accountability Bureau (NAB) informed the Supreme Court on Friday that federal Minister for Parliamentary Affairs Babar Awan, senior counsel Sharifuddin Pirzada, former attorney-general Malik Muhammad Qayyum, Ali Waseem and Sarfaraz Merchant had been called to answer queries in the Rs9 billion Bank of Punjab loan scam.

Sheikh Muhammad Afzal, the owner of Haris Steel Industry and the main character in the scam, had narrated before the Supreme Court at the last hearing how he had bought a whole lot of people to get the case disposed of and help him flee the country.

Sheikh Afzal, who was arrested in Malaysia and brought to Pakistan last month, said he had paid Rs35 million to Dr Awan, Rs10 million to former adviser Sharifuddin Pirzada, Rs20 million to Malik Qayyum and Rs7.5 million to Ali Waseem, son of Waseem Sajjad, to obtain a court verdict in his favour.

Through his report, NAB’s investigation officer Aftab Ahmed informed the bench – comprising Chief Justice Iftikhar Mohammad Chaudhry, Justice Chaudhry Ijaz Ahmed and Justice Rehmat Hussain Jafferi – that a senior counsel had been included in the investigation.

The court directed the Federal Investigation Agency and NAB to initiate appropriate action against the chief commissioner of Islamabad for allegedly facilitating Sheikh Afzal’s escape from the country. The court order coincided with reports that BoP’s former chief Hamesh Khan and a co-accused, who had fled to the US, were arrested and were likely to be extradited to Pakistan.

NAB Prosecutor-General Danishwar Malik informed the court about the arrest of Mr Hamesh Khan but said that his extradition would take some time because a US magistrate would first hear the accused. NAB has submitted relevant documents to the magistrate, he added.

The bench appreciated efforts made to get Mr Hamesh Khan arrested and to initiate the process for his return to Pakistan.

The bench expressed dismay over inaction against the chief commissioner Islamabad despite his confession that he had helped the main accused flee the country during his tenure as District Coordination Officer Nankana.

The court was also displeased by the transfer of FIA Director-General Tariq Khosa, a reputed officer assigned to investigate several important cases, including the Haris Steel case, especially when he was performing well.

Probably, he (Mr Khosa) had been removed because he was helping the court in a better way, the chief justice observed and deplored that instead of appreciating his performance the officer had been transferred to the narcotics control department.

The court made it clear that it was not helpless and could pass an order in this regard and asked acting Attorney-General Shah Khawar to contact the high-ups and explain reasons behind Mr Khosa’s removal.

NAB’s Aftab Ahmed also informed the court that Sheikh Afzal’s two accounts in Dubai and Malaysia had been frozen.

So far, NAB has recovered Rs5.85 billion and is trying to get Sheikh Afzal’s two brothers to return another Rs1.73 billion. Recovery has been made in the form of ornaments, certificates and cash while bank accounts of Sheikh Nisar, a brother of Sheikh Afzal, worth Rs230 million and Rs300 million had been frozen. The bench observed that the recovery should be made on an urgent basis as he could also flee the country.

BoP’s counsel Khwaja Haris informed the court that the bank had received pre-bargain pleas to settle the issue. The bench asked him to apprise the court of the fate of the mutual settlement on Dec 16.


DHA told to file pacts with foreign builders
Daily Times 12 December, 2009

KARACHI: The Sindh High Court on Friday directed the Defence Housing Authority administrator to file all agreements that the authority has signed with foreign builders regarding the construction of mega projects in the DHA area till December 16.

The petitioner, Adil Jilani, approached the SHC against alleged frauds committed by the builders of multi-billion rupee mega projects in the DHA.

He stated foreign builders were imposing heavy penalties on buyers who were unable to pay their regular instalments. He contended that building by-laws do not permit a penalty of more than four percent of the paid instalments and in case of cancellation of unit from the builder or buyer, however the builders were deducting 30 percent of the unit price, he claimed.

In many cases, the builders were booking the same unit to multiple buyers, thus blackmailing the general public who invested in their projects, and prayed the court to order the DHA to eliminate such fraudulent practices of developers.

The SHC division bench directed the DHA to file the agreements signed with the foreign builders as well as agreements with individual people, who had booked apartments in the projects, to show on what terms and conditions they were given.

The court also repeated the notice to Cantonment Board Clifton CEO and issued notices to chief executives of the foreign building companies to file comments on the next date. ppi


Deals with foreign builders
The News 12 December, 2009

The Sindh High Court (SHC) on Friday directed the Administrator of the Defence Housing Authority to file till December 16, 2009, agreements authority signed with foreign builders regarding constructions of multi-billion rupees mega projects Creek Marina, Crescent Bay, initiated in DHA, Karachi.

Petitioner, Adil Gilani, approached the SHC against alleged frauds being committed by builders of Multi-billion rupees mega projects, EMAAR Project, Crescent Bay, and Meinhardt Project, Creek Marina being constructed in the DHA.

He stated that foreign builders were imposing heavy penalties on buyers who were unable to pay regular installments.

He contended building byelaws do not permit a penalty of more than 4 percent of paid installments in case of cancellation of unit from builder and buyer, but builders were deducting 30 percent of unit prices/total price.

In many cases, builders make a booking for the same unit in the names of multiple buyers thus leaving leeway for blackmailing the general public who invest with such builders. He prayed the court to order the DHA to eliminate fraudulent practices of builders/developers being committed in projects Crescent Bay & Creek Marina.

He also prayed to order builders to place before the court agreements signed with parties.

The SHC division bench directed the DHA to file such agreements as well as agreements with individuals who booked apartments in projects Creek Marina & Crescent Bay as also the agreements with Meinhardt on project Creek Marina which should be placed to show on what terms and conditions these were given to buyers of Creek Marina.

The Court also repeated notice to the Chief Executive Officer, Clifton Cantonment Board, and issued notices the to Chief Executives of EMAAR’s project Creek Crescent, & Meinhardt’s project, Creek Marina, to file comments on the next date of hearing.

Notice issued in petition questioning appointment: Notices were issued to Ministry of Law and Justice, Chief Secretary Sindh and Member Technical of Environment Protection Tribunal (EPT) by a division bench of High Court of Sindh (SHC) comprising Justice Musheer Alam and Justice Aqeel Ahmed Abbasi here on Friday.

The bench was hearing a constitution petition filed by Ghulam Qadir Mahar who retired from the Police department in Grade-21.

The petitioner referring to the advertisement appearing in local newspapers on 12-4-2008 submitted that he possessed all qualification and was domiciled from Sindh Rural area but one Sami-uz-Zaman was appointed while petitioner and other applicants to the post of Member Technical were even not called for interview.

The petitioner prayed to the court to declare inaction by the respondents for not filling the position impugned in the petition as illegal, direct respondent to interview applicants including petitioner and to appoint the petitioner if no other applicant is available from Rural Sindh.

The bench after hearing Barrister Zamir Ghumro, counsel for petitioner issued notices to the respondents for a date to be fixed later by the office of the court.


SHC seeks DHA deals with foreign builders
Dawn 12 December, 2009

KARACHI, Dec 11: The Sindh High Court on Friday directed the administrator of the Defence Housing Authority to file till Dec 16 copies of the agreements the authority had signed with foreign builders regarding construction of the Creek Marina and Crescent Bay projects.

Petitioner Adil Jilani approached the SHC against alleged frauds being committed by the builders of the multi-billion-rupee mega projects being constructed in the DHA.

He stated that the foreign builders were imposing heavy penalties on buyers who were unable to pay regular instalments.

He contended that building bylaws did not permit a penalty of more than four per cent of paid instalments in case of cancellation of a unit from the builder and the buyer, but the builders were deducting 30 per cent of the unit price/ total price.

In many cases, the builders made booking for the same unit in the name of multiple buyers, thus leaving the scope of blackmailing of the general public, the petitioner added.

He prayed to the court to order the DHA to eliminate fraudulent practices of the builders/developers being committed in the projects.

He also prayed to the court to order the builders to place in court copies of the agreements signed with the parties.

The SHC division bench directed the DHA to file such agreements as well as the agreements with individual persons who booked apartments in the projects.

Also agreements with Meinhardt on Creek Marina project be placed to show on what terms and conditions these were given to the buyers of Creek Marina, it said.

The court also repeated a notice to the chief executive officer of the Clifton Cantonment Board and issued notices to the chief executives of the EMAAR project, Creek Crescent, and Meinhardt’s project, Creek Marina, to file comments on the next date.—PPI


NAB summons Babar Awan, others in HSM probe case
The News 12 December, 2009

ISLAMABAD: The National Accountability Bureau (NAB) has summoned Minister for Parliamentary Affairs Dr Babar Awan and top legal gurus of the country, accused of getting bribes from the owners of the Haris Steel Mills, Lahore, for getting a favourable verdict from the court in the Rs 9 billion loan scam in the Bank of Punjab.

A NAB official told The News on Friday on condition of anonymity that the NAB authorities had informed the Supreme Court about summoning of the senior lawyers for investigation into the Haris Steel Mills probe case. He said that they have summoned Federal Minister for Parliamentary Affairs Dr Babar Awan, Sharifuddin Pirzada, former Attorney General Malik Qayyum and Ali Sajjad, son of Senator Wasim Sajjad, and they would possibly be interrogated today (Saturday).

On November 24, Sheikh Afzal, owner of Haris Steel Industries and the main accused in financial scam of Rs9 billion at the Bank of Punjab (BoP) had revealed before the bench of the Supreme Court to have given Rs35 million to Dr Babar Awan, Minister for Parliamentary Affairs, for winning the case in the apex court. Sheikh Afzal, who was absconder in the BoP scam, was recently arrested by the FIA from Malaysia, along with his son Haris Afzal, and was produced before a three member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry.

The BoP had granted a loan of Rs9 billion to the Haris Steel Industries (HSI), Lahore, without fulfilling legal requirements and consequently the Industries defaulted the loan. The Bank of Punjab then filed a petition against HSI.

Sheikh Afzal had submitted to have given Rs5 million as fees to senior advocate of the Supreme Court and Minister for Parliamentary Affairs Dr Babar Awan, besides giving him Rs35 million for assuring of winning the case.

Sheikh Afzal disclosed a list to the newsmen of top lawyers who extorted millions of rupees from him to clear his loan default cases from the courts. He alleged that Sharifuddin Pirzada took Rs10 million, Malik Qayyum Rs20 million and Ali Waseem Rs7.5 million.


NAB chief grilled on Swiss bank account
Dawn 10 December, 2009

ISLAMABAD: A Supreme Court bench hearing petitions against the National Reconciliation Ordinance (NRO) questioned the chairman of the National Accountability Bureau (NAB) on Wednesday about alleged laundered money lying frozen in a Swiss bank and the amount spent by the state on the case, but was disappointed by the answers.

‘Not a single confidence-inspiring answer has been given,’ Justice Mohammad Sair Ali, a member of the 17-judge bench, observed. He said that the replies given by NAB Chairman Nawid Ahsan lacked credibility.

The court ordered Mr Ahsan to furnish by Thursday complete information about the status of $60 million allegedly laundered in the SGS case but lying dormant in the Swiss bank, status of the government’s claim on the money and the names of claimants.

If the government was not the claimant then where would the money go, why were the case documents picked up from a lawyer’s office in Geneva and kept in Pakistan’s high commission in London, who ordered the shifting of the papers and whether proceedings before the Swiss court and attorney general were terminated at the behest of NAB, the judges asked.

The court continued to seek answers from NAB despite an assurance given by acting Attorney General Shah Khawar that all facts regarding the cases pending before the Swiss magistrate and attorney general would be provided.

‘It appears that the court is widening the scope of the hearing, rather than focussing on the controversial amnesty law, by opening the entire gambit of cases pending even in foreign lands having no effect of the NRO,’ a constitutional expert told Dawn.

The references were prepared by the Ehtesab Bureau headed by Saifur Rehman in the 1990s and proceedings were initiated before the Swiss attorney general and magistrate on the basis of a letter written by former attorney general Chaudhry Farooq, Mr Khawar said.

He said there were 25 claimants of the money in the Swiss bank. After the promulgation of the NRO, the NAB prosecutor general and former attorney general Malik Qayyum went to Geneva to request the closure of the case, he said.

The request was not accepted by the Swiss attorney general who said he would deal with the case in accordance with the local law, he said.

The NAB chairman told the court that the government had sought mutual legal assistance through the former attorney general and when the cases were withdrawn, it was also done through Mr Qayyum.

He conceded that the NAB had not pursued the matter of the money lying with the Swiss bank.

NAB Prosecutor General Dr Danishwar informed the court that after meeting him the Swiss attorney general had made a statement before the press that he would not prosecute the cases.

‘What is the hitch in conceding that NAB withdrew the case pending with Swiss authorities,’ Justice Javed Iqbal asked and recalled that there was some conviction in the money laundering case.

‘You have to show that the interest of the people was served in dealing with the Swiss cases as an indecent haste was shown,’ he observed.

He asked NAB to submit details of trips to Geneva by officials of the bureau and the Federal Investigation Agency on the pretext of pursuing the case.

The court also asked why was the record of the money laundering case shifted to London from Geneva when there were several Pakistani missions in Switzerland, including in Bern.

The NAB chairman said the missions in Geneva did not enjoy the facility of sending articles through a diplomatic bag.

He said the prosecutor general was sent to recover the documents under his supervision and Pakistan’s high commission in the United Kingdom was informed about the move.

He said the documents were NAB’s property and would certainly reach Islamabad.‘It appears to me as a James Bond-like action,’ Justice Sair said in a lighter vein.

The acting attorney general quipped that the impression had been created by a section of the media.

He complained that the electronic media was not honouring the court’s restraining observation about discussion on the matter.

The chief justice again asked the electronic media to restrain from discussing the sub judice matter in accordance with norms. Otherwise, the court would be compelled to issue orders in black and white, he said.

Justice Raja Fayyaz observed that NAB had also not given details about cases pending in Madrid and England. He said the bureau had become just ministerial staff of the government and nothing more.

Justice Jawwad S. Khawaja asked why did NAB start work only after the court had taken cognizance of the matter.

‘We are not after the blood of anyone but only interested in ensuring that the money should come back if it belongs to the people,’ the chief justice said.

The day’s proceedings also provided a moment of introspection when during arguments by senior counsel Abdul Hafeez Pirzada, Justice Tassuduq Jillani asked why do the rulers always commit the same mistakes in the art of governance.

‘For how long we will continue standing here as day in and day out we are committing the same mistakes and errors,’ the chief justice observed, adding: ‘When will we mend our ways.’

‘Had we adhered to the Constitution, we would not be hearing from the Transparency International that we were a corrupt country and ranked 42nd in their index,’ he said.

Advocate Pirzada said the remedy lay in accepting mistakes. He stressed the need for a new beginning with a clean slate and regretted that the country was fragmenting and the enemy was from within.

‘This nation deserves better because we are good people and have always excelled in foreign countries,’ he said.

He said the textile industry of England had been revived by immigrants from here. ‘Nothing is wrong with the people. The only problem is that we have not strengthened institutions and educated the people.’

Justice Khalilur Rehman Ramday said it was painful to see that ‘as individuals we are always busy securing benefits for ourselves. We need reconciliation with ourselves by improving norms, morality and values instead of making money. Where will we go with all this money. Look what happened to the Shah of Iran and President Marcos of the Philippines. We have shown the way to the nation by offering sacrifices over the past two years but we cannot build the nation and it has to build itself.

‘When the nation and the people are on the right path then success is the only answer and all of us sitting here is the example.’

He also observed in a satirical way that he wished the NRO could speak to lament that no one who had taken benefit of it was coming forward to defend it.

The acting attorney general also presented a summary sent to former president Pervez Musharraf before the promulgation of the NRO.

Sindh Advocate General Yusuf Leghari presented a voluminous list of cases withdrawn by a review board under the NRO, but the court asked him to file it again in a proper manner.


Anti-Corruption Day
Business Recorder 9 December, 2009

ARTICLE (December 09 2009): 9th December 2009 is the seventh anniversary of the signing of the United Nations Convention against Corruption UNCAC, which Pakistan has ratified on 11th August 2007. On his election as the first Governor General of the Constituent Assembly of Pakistan, Quaid-i-Azam, Muhammad Ali Jinnah, on 11 August 1947, said "one of the biggest curses from which India is suffering – I do not say that other countries are free from it, but, I think, our condition is much worse-is bribery and corruption.

That really is a poison. We must put it down with an iron hand and I hope that you will take adequate measures as soon as possible for this Assembly to do so". It is unfortunate that even today we are in the same position. On the TI Corruption Perception Index 2009, Pakistan is the 42nd corrupt country out of 180. Pakistan needs to take the CBM to attract foreign investment. One of these are to make laws to comply with international conventions.

Although Pakistan’s legal framework and economic strategy do not discriminate against foreign investment, protection of property rights and contract enforcement is perceived to be problematic because of the irregularities and corruption in the judicial system. Companies should know that Pakistan has been a member of the New York Convention of 1958 since 2005, but the provisions of this convention are still not included in Pakistani legislation.

Until the Parliament gives the final approval of the convention and passes the relative legislation, the government has issued renewed ordinances to implement the New York Convention 1958. Despite this, there are still concerns about the sanctity of contractual arbitrations between private companies and the ability to uphold the sanctity of contracts regarding contract disputes where the Pakistani state is one of the parties.

Pakistan is a member of the International Centre for the Settlement of Investment Disputes (ICSID); thus, in principle, arbitration should be secured. However, in reality, companies are reluctant to trust that Pakistan will accept decisions by international arbitration. Corruption, defined as ‘Misuse of authority for private gain, endangers the stability and security of societies, undermine the values of democracy and morality and jeopardises social, economic and political development.

The UN Convention against Corruption is a ray of hope to more than a billion men and women who count as the world’s poor. UNCAC comprises of 71 Articles, ranging from FOI, Independent Judiciary, Transparent Procurement, Money Laundering, Conflict of Interest, and abuse of authority.

Under the UNCAC, Pakistan has to apply, within its own institutional and legal systems, codes or standards of conduct for the correct, honourable and proper performance of public functions, such as International Code of Conduct for Public Officials contained in the annex to General Assembly resolution 51/59 of 12 December 1996.

Article 19 deals with the Abuse of functions, Article 10 is on Public reporting to combat corruption, and Article 13 on the Participation of society says "Each State Party shall take appropriate measures, within its means and in accordance with fundamental principles of its domestic law, to promote the active participation of individuals and groups outside the public sector, such as civil society, non-governmental organisations and community-based organisations, in the prevention of and the fight against corruption and to raise public awareness regarding the existence, causes and gravity of and the threat posed by corruption".

A free and independent press is essential as a means of bringing to public notice what is revealed by these and other mechanisms. Civil society has to ensure that no one is allowed to impose any restrictions on the media, which has played the most vital role in the restoration of the Judiciary, deposed by the previous government. Although the concentration of press ownership to a small number of owners also raises doubts about press impartiality.

Despite this, the press remains a crucial instrument of transparency and accountability. The Draft Freedom of Information Act 2008 Pakistan mandates that all documents, noting and minutes, after the decision is made, shall be public record, and that all Public Records declared under Section 7 shall be computerised by the public bodies. TI Pakistan demands that FOI shall also make it mandatory to post all Public Records on the website of the department. Under the Public Procurement Rules 2004 enacted in 2004, all Contracts and Evaluation reports are to be declared as public documents.

These rules are applicable on Civilian as well as on Military Departments. Availability of these documents on departments website is necessary as the public could compare prices offered by various sellers, get the contracts most advantageous for them but more importantly, this would enable ordinary citizens to challenge office holders who inflate prices and contracts. This is the most vital rule of the PPRA which make "Corruption a high-risk activity".

Transparency International Pakistan recommends to the Pakistan Government to direct all the Regulatory Authorities to publish their reports on the website etc, in order to restore the confidence of citizens, local and foreign investors and donor agencies. Some of the Regulatory Authorities are OGRA, State Bank of Pakistan, PPRA, SECP, PEMRA, EPA, PFRA, CCP.

Transparency International Pakistan reminds all the ruling parities, that in their Election Manifesto, they have committed to the following transparent measures, which they must adhere to;

— There will be no discretion in any administrative decision taken by government servants;

— All public appointments will be on merit, and on a predetermined criteria, and

— A clear commitment that their party will combat corruption, wherever and whenever it occurs

(The writer is Chairman Transparency International Pakistan)


Removal from Cabinet expected: some ministers may meet Zardari on December 7
Business Recorder 7 December, 2009

ISLAMABAD (December 06 2009): The federal ministers, who are reportedly being asked to hand over their resignations en bloc to Prime Minister Syed Yousuf Raza Gilani, are expected to meet President Asif Ali Zardari on Monday at Awan-i-Sadr, well informed sources told Business Recorder on Saturday.

"It is still unclear how many incumbent ministers will be retained in the next cabinet, but what I can say is that the President will personally convey the decision to all those ministers who are being removed," said one close aide of a Federal Minister from Sindh.

There are speculations in the Federal capital that all those ministers, who have been implicated in corruption charges, will lose their jobs, in addition to those, who benefited from the infamous National Reconciliation Ordinance (NRO).

Minister of Industries and Production Mian Manzoor Ahmad Wattoo, Minister for Water and Power Raja Parvez Ashraf, Food and Agriculture Minster Nazar Muhammad Gondal, Health Minister Ijaz Jakhrani, Commerce Minister Makhdoom Amin Fahim, several ministers of state and advisors are expected to be removed. On Saturday, Pak secretariat, which deals with the policy matters, was awash with speculation as to which minister would be retained and which one lose his/her job.

A police official, who keeps a close eye on all entrants to the Secretariat, approached this correspondent and prayed for the removal of some incumbent ministers, who, according to him, have both hands in the till. Well informed sources told this scribe that a committee, constituted by Prime Minister Gilani under the chairmanship of Finance Minister Senator Shaukat Tarin, had started an inquiry into corruption charges levelled against different ministries and divisions by the Transparency International (TI) in its recent report. Eight Federal Secretaries as well as members from the private sector are also on board.

Unconfirmed reports also suggest that other Federal agencies are investigating corruption cases against the Federal ministers and secretaries with the backing of the Prime Minister Secretariat. The most visible corruption has been through blatant violation of public procurement rules. This is facilitated because the element of conflict of interest is disregarded and most of the Federal secretaries are on the Board of Public Procurement Regulatory Authority (PPRA).

The Transparency International Pakistan (TIP), in hundreds of communications throughout the year, has pointed out violations of procurement rules. The TI’s concerns were unfortunately not taken seriously by the decision-makers.

The list of suspect ministries/divisions as identified in the TI report as well as media outlets include the ministries of Industries, Commerce, Ports and Shipping and Water and Power its affiliates, namely Water and Power Development Authority (Wapda), Pakistan Electric Power Company (Pepco), Private Power and Infrastructure Board (PPIB), Alternative Energy Development Board (AEDB) and National Engineering Services Pakistan (Nespak). These ranged from appointments, based on nepotism and bribes, and awarding of contracts to favourites.


Efforts on to save accused
The Nation 5 December, 2009

ISLAMABAD – Federal Investigation Agency (FIA) has booked Iqbal Z Ahmed, a tycoon in energy sector, who is allegedly involved in transferring Rs. 1.7 billion abroad in the name of Iqbal Afridi, his close associate, and others.

FIA sources have confided to TheNation that a challan against the accused has been submitted to Director General FIA awaiting its presentation in the court.
Extreme pressure is being exerted on FIA to stop it from presenting challan in the court for the issuance of Iqbal Z. Ahmed’s arrest warrants, the sources informed. The sources have further revealed that an influential minister, who has been elevated from the status of an advisor and is considered a close associate of President Asif Ali Zardari, is pressurising the Agency to close the case but DG FIA still seems interested in pursuing the case.

It is pertinent to mention here that Iqbal has invested in Rental Power Plants (RPPs) and deals in liquefied petroleum gas (LPG) business. He enjoys good relations with the high-ups of both previous and present regimes. The case was registered against him after the busting of Malik Money Exchanger, Karachi, a company that was found involved in money laundering. The sources revealed that name of Iqbal came to light from the record of the said company and the Agency found that he had also been sending money abroad through that company. Malik Exchange Company was owned by Minister for State of Kashmir Affairs, Sardar Abdul Razzak, and a multibillion rupees money laundering scam came to surface in June this year that was committed by the said company.
It was then reported that FIA arrested many persons after tracing 21 secret accounts of fake companies those made illegal transactions amounting to Rs. 15 billion to abroad and more importantly moneys were also sent to tribal areas of Pakistan.

With the help of record of Malik Exchange, investigations are also underway against some bankers who assisted Iqbal in transferring money. The sources informed that interestingly Iqbal in his justification had written to the Agency that he did not know about the unauthorised status of Malik Exchange, adding, “We hope that we have clarified the matter and that the issue will be closed.”

An FIA spokesman has confirmed that the case exists, however he refused to give comments saying, “No comments at this stage can be given but the matter would be decided on merit.”


No ID no worry, get loans and get them written off also
Dawn December 5, 2009

ISLAMABAD: As if the generous writing off of loans worth Rs59.94billion during the General Pervez Musharraf reign wasn’t bad enough, now official documents show that hundreds of these borrowers were even given these loans with such casualness and deliberate neglect that not even the national identity cards of the borrowers were demanded by the banks, what to talk of other collateral and sureties.

The official record of these written off loans submitted to the National Assembly and available with The News revealed that in an unbelievable large number of cases the lending institutions, a bank and another (now defunct) financial entity, had issued huge loans to the individuals without even getting their National Identity Cards (NICs) as per prudential requirements.

The bank has not given any reason about how the loans were issued to these business parties and the individuals without getting their proper NICs as per requirements. One official has commented that this was not possible without the active collaboration of the bank officials as no bank could give loan to anyone without NICs.

The following cases reveal just another ugly aspect of this sordid plunder of national wealth where, barring a few genuine deserving cases, billions were siphoned away by hundreds of corrupt businessmen colluding with equally corrupt bankers. There were some genuine cases where loans were written off in accordance with the rules. In all cases listed below, none of the cited borrowers had been forced by the lending institutions to submit their ID cards, an otherwise basic requirement.

The ID cards of five directors of Ms Bawani Industries were missing. This loan was ultimately written off.

One foreign national Saral Dynamic Hardware Bobignv too managed to get a loan of Rs5.5million and later got his total outstanding Rs6.4million written off including the principal amount and Rs0.8million mark up. The loan was given in foreign currency to this foreign national.

The two banks wrote off billions of rupees during the Musharraf era and in one case, the defunct bank wrote off a loan of Rs137million outstanding against four individuals.

First Tawakal Modrab Karachi got Rs 628million written off while the borrowers—-Abdul Qadir Tawakal, Rafiq Tawakal,Ali Husasin Mooney and Abid Husain did not even bother submitting their NICs. Shahfa Corporation Lahore and its owners Saluddin Ahmed Sahaf, Wajiddin Mahmood Shaf also got Rs146million written off. Regnet Dyeing and Finishing Mills also got Rs 91million written including Rs50million principal loan. Fatima Foods Lahore also got Rs 80million written off with Rs 40million principal loan waived off. National Garments also got Rs 335million written off including Rs 140million principal amount. In Multan Mohib textile got Rs 1.17billion written off including principal amount of Rs546million. In Karachi Bawani Industries got Rs 70million written off including 11.3million principal amount. The names of the fathers of borrowers are not on official record of the bank who got this loan written off.

The papers show that even a London based n ex-employee of a bank, Abdul Haleem also got Rs 2.744million written off and now the bank says it did not have even the ID card of its own former employee available in record. His principal loan was Rs 2.7million which was written off.

Adamjee Industries also got Rs 48million written off including Rs168million principal amount. Farooq Sheikh, Mrs Shereen Farooq, Zafar Sheikh, Mumtaz Saleem, Tahir Sehikh got Rs 168million loan and got the whole principal wavied off. They also got the mark up of Rs225million written off too. Master Rubber Tyer owners Fayyaz Malik and Farooq Malik got 52m written off.

Even an industrial unit Ms Metropolitan National Textile Karachi owned by Sikandar Ali Jatoi, Mazhar Ali Jatoi, Jamal Hassan, SM Masood was given the loan without any NICs. A sum of Rs190million outstanding the Jaoti family was also written off.

The papers showed that even, the owners of Daweeo Corporation -Kim Woo Choong, Kim Joun Sung, Lee Woo Bok, Yoon Nuke Neon, Chug Myuong Kul did not submit their Ids at the time of obtaining Rs10.8million loan. Interestingly, the same amount was later written off by the bank. They got principal amount written off in addition to Rs2.3million mark up payable against this loan.

Even Ch Shujaat Hussain, Pervez Elahi and their family members who got Rs37.987 loan written off never produced their national identity cards.

Hearts International Rawalpindi got Rs0.9million written off while the bank did not have the IDs of Dr Major Gen retired Zulifkar Ali Khan, Dr Abdus Qudus Khan, Mohammad Rafi, Shamim Ashraf Khan, Naheed Mashud Kiani, Rahat Azfa. Johoson and Philips also got Rs 64 million loan written off and there is no record of NICs of the borrowers-Bilal Ahmed Qureshi, Raja Ahmed Khan, Habibulah Baig, Rasid Y Chinoy, Abdul Rehman Khan, Syed Abdul Noor. Johnson and Philips again got another loan of Rs26million written off and once again the same borrowers did not give their NICs. Ahmed Chemical limited owners Aftab Khan, Jehan Ara Khan, Mahjabeen Ahmed, Sabiuddin Ahmed, Iqbal Ahmed Khan, Iram Aftab, Aftab Ahmed Khan NICs are not available. They got Rs0.6million written off. Ksornos Corporation Lahore also got Rs 4.3million written off. Again NICs of Sh Abdul Hafeez, Sh Imran Hafeez, Sh Salman Hafeez, Sh Nauman Hafeez, Qari Khalid Mahmood, Shahbaz Murad and Zahida Hafeez are not available in the record. Zodesh Limited got Rs 40million written off. The borrowers Zoraia Lashari, Imrana Lashari, Ms Lubna Lashari and Hayat Khan did not give NICs.

GUJRAT: Mohammad Akram Rs 2.5m, Fazal Hussain Rs 0.6m, Malik Mohammad Akthar 0.5m, Yaqoob Brothers Rs 0.5m, Nisa Enterprise Rs 0.5m (Islamabad).

Mohammad Saleem Rs0.7m,

QUETTA: Abdul Qadir Rs 0.511m, Mohammad Alm Rs 0.4m, Haji Moula Dad Kalat Rs 0.5m, Mohammad Hassan Rs 0.5m, Mohammad Ramzan Rs 0.5m, Gul Mohammad Rs 0.5m,

KARACHI: Babar Rafiq Rs0/6, Mosar Ahmed Rs 0.5m, Qaisaurz Zaman Rs 0.6m, Sajid Husain Rs 0.570m, Nasir Rafique Rs 0.531m, Badar Ahmed Rs0.596m, Mazhar Fared Rs 0.683m, Khalid Mahmood Rs 0.653m, Saeed Ahmed 0.61m, Jawad Textile Industries 1m, Masnoor Yousuf Rs0.536m, Mohammad Ismail Rs0.595m, Amir Hashmi Rs0.5m, Sajid Ali Rs0.7m, Mushtaq Hussain Rs 0.579m, Tahir Ehtasham RS 0.6M, Mohammad Noman Bhatti Rs 0.54m, Saleemuddin Rs 0.522m, Anisuddin Rs 0.522m, Monbina Begum Rs0.639m, Miss Tabasum Shehnaz Rs 0.6m, Mohammad Yousuf Rs 0.665m, Mant Lal Mault Rs 0.674m, Athar Maqbool Rs 0.7m, Shahid Khan Rs 0.5m, Azaam Afridi Rs 0.633m, Syed Qasim Hussain Rs 0.539m, Abdul Qayyum Rs 0.681m, Mohammad Burhan Khan Rs0.825m, Syed Khurram Raza Naqvi Rs 0.543m, Hassan Shakeel Rs 0.825m, Ali Hassan Rs 0.534m, Mohammad Irfan Khan Rs 0.550m, Shafiq Ahmed RS 0.820M, Ali Hassan Hassan Rs 0.534m, Mohammad Irfan Khan Rs 0.550M, Khawaja Moin Hasan Rs 0.666m, Raza Hasan Rs0.528m, Syed Afaq Moid Rs 0.679m, Syed Mohammad Nasim Ali Rs0.680m, Syed Aslam Ali Rs0.67m, Asif Rehman Rs 0.665m, Asim Ilyas Rs 0.5m, Adnan Hassan Rs 0.820m, Syed Rasheed Ahmed Rs0.5m, Mobina Afzal Rs 0.7m, Kamran Rauf Rs 0.74m, Najma Akthar Rs0.825m, S Sharifuddin Rs 0.825m, Imtiaz Hussain Zaidi Rs 0.6m, Khalid Baig Rs 0.589m, Mohammad Awan RS 0.6M, Tariq Baloch Rs0.668m, Mohammad Mobin Sheikh Rs 0.614m, Ms Golden Paint industries Rs0.7m, Mohammad Arshad Shakeel Rs 1.441m, Altaf Hussain Shah Rs 0.5m, Mehmoodul Hassan Rs 0.548m, Mashuddin Rs0.9m, Atizaudin Rs 1.5m, Wajihuddin Rs1.5m, Ihtashamuddin Rs 0.557m, FS Aizauddin Rs 0.5m, FS Azauddin Rs 0.58m, Mrs Rubina Rs 0.655m, Abdul Azim RS 0.556M, Abdul Razakk Rs 0.5m, Akthar Hussain Rs 0.519m, Asif Soomro Rs 0.554m, Fayyaz Ahmed Rs 0.544m, M Saleem Rs 0.539m, Sadiq Bano Rs 0.54m, Moizudin Rs 0.562m, Abdul Haq Rs0.5m, Mrs Kasuar Perveen Rs0.514m, Mohammad Rafiq Rs 0.551m, Mohammad Saleem Rs 0.591, Rana Mohmmad Rs0.545m, Rukhsana Begum Rs0.504m, S. Rehan Shahid Rs0.560m. Hssan Khan Rs 0.503m, Kashan Ali Rs 0.624m, Saleem Medical Store Rs 1.5million, Ms Huma Electric Inds Nameem Ullsah Rs 1.4m, Ms Tariq Electric Inds Rs 3.2m, Ms New National Steel Inds Rs 2.5million, Ms Kashmir Industrial Corp Rs 1.1m,

Irfan Basharat Rs 2.1m, Jhangir Hadier Rs 6.5m, Mohammad Sadiq Rs 2.66m, Punjab Ceremaic owners Zahid Shkeel Rs 7.6million, Ms Gulberg Caters owned by Mohammad Aslam Rs0.9m.


Toll of corruption
Dawn December 5, 2009

With the NRO scandal the issue of corruption has been focused on in depth. But while all eyes have been directed in one place – that palatial presidency on the hill – occupied by a man widely perceived as corrupt, the fact is that corruption is a curse that is far more deeply rooted. Over Rs100 billion has, according to a report in this newspaper, been written off over the last decade. The trend was well-entrenched over the Musharraf government’s tenure, with the Chaudhrys in Gujrat emerging as the biggest beneficiaries. But during the two years of the PPP government, a sum of at least Rs15 billion has already been written off. From what we can see, more loans are probably being handed out each day – the beneficiaries confident they can simply use influence to have them written off. There is of course nothing especially surprising about this. We all know it happens. Reports have appeared before in the media, anecdotes are told each day, talk-show hosts discuss the matter with guests who all, virtually without exception, shake their heads and exclaim loudly over the tragedy of the situation. Lately we have also begun hearing comments from those who maintain that corruption is so deeply entrenched, and as such so much a ‘normal’ occurrence that it should not even be discussed as an issue.

That we are encountering such attitudes is a reflection of what amounts to a complete failure to address the issue. Simply because problems have been there a long time doesn’t mean they should be ignored. Indeed it is all the more imperative that they be tackled before further harm is inflicted. Corruption takes away from people more than the mere resources of the state. It takes away trust and breaks that vital social contract that binds a state and its citizens. The knowledge that the most privileged political families are corrupt acts, in many ways too, to build the idea that corruption is acceptable. Everywhere people argue that small-scale corruption is acceptable because, after all, it exists on a mega-scale as well. As citizens we need to find a way to take a stand. Studies from other countries show that corruption also means that the resources of a state – its oil, its gas, its crops – are not used in the interest of the people. The ministers and government functionaries who control them are too busy taking off the cream for their own use. Active watchdog groups in society can play some part in combating corruption. We need laws that can bring transparency in various facets of official life. Until we all decide to act, corruption will continue to erode valuable resources and leave us with rulers who consider their own good above that of all the 165 million people who make up Pakistan.


Introducing transparent financial apparatus: Gilani reiterates government resolve
Business Recorder December 5, 2009

ON BOARD PM’s SPECIAL PLANE (December 05 2009): Prime Minister Syed Yousuf Raza Gilani has reiterated his government’s resolve to streamline the system by introducing strict and transparent financial apparatus, and restructure white elephants, like Water and Power Development Authority (Wapda), Pakistan International Airlines (PIA), Railways and Pakistan Steel Mills.

"Soon after the Transparency International report, the government has constituted a committee, headed by Finance Minister Shaukat Tarin, to look into the matters of institutions as pointed out in the report and soon the institutions, which are burden on national exchequer, will be restructured," the Prime Minister said while talking to reporters on board his special plane, on his way back to Islamabad from his four-day official visit to Germany and the UK.

Gilani said that he raised the issue of an exit plan with British Prime Minister Brown and told him that the military solution was not a solution. "We need to win people through political empowerment, good governance and equal opportunities," he said.

"I announced an exit plan soon after the operation was launched in Malakand and released funds for rehabilitation and reconstruction in this insurgency-hit region", Gilani said, adding that over Rs 25 billion was required in Malakand for reconstruction of infrastructure, capacity building of institutions, particularly police and Frontier Constabulary.

He said that he made this amount available in four instalments and the first tranche of this amount rupees six billion had been released and the remaining was earmarked in the budget.

He said that with the launch of the operation, an amount was reserved for rehabilitation of internally displaced persons (IDPs) and rupees eight billion was immediately made available to provide Rs 25,000 per family. "People have helped the government as they shared the major part of the cost of the IDPs and provided them with all the facilities," he added.

The Prime Minister said that Pakistan withdrew all subsidies, set the tariff as per international standards to usher in financial discipline, reduced the fiscal deficit and ended dependency on foreign loans and domestic borrowings. "We took difficult decisions with the objective of taking the country out of isolation, fiscal deficit, economic disorder and now due to these tough decisions, including the withdrawal of subsidies, we are in a strong position where people trust us," he said.

He said that stern financial decision had started paying dividends as Pakistan had come out of international isolation. "We are no more in isolation, we have friends round the globe who want to support Pakistan to overcome the challenges of terrorism, extremism and want to see Pakistan strong and stable," he added.

Referring to Pakistan’s the geo-strategic relevance, Gilani said the international community could not ignore this position or remain indifferent to Pakistan’s issues. "Besides being strategically important country, Pakistan is frontline state in war against terrorism and the world is realising this position," he said.

"Law and order problem is the main cause of reluctance of foreign investors to come to Pakistan and the government is making all out efforts to normalise the situation by addressing the root cause of the problem. It is not a one day job to maintain law and order situation under the present global circumstances, but we can get better results by addressing the root causes of terrorism and extremism and empower people to come into the mainstream," he added.

Citing the rise in terrorism in tribal areas, Prime Minister Gilani said that the previous government did not treat this cancer even though it was easy to handle the situation at that time. "The previous regime did not touch this issue, which helped terrorists expand their network, and as we started the operation, the reaction was a wave of terrorist attacks," he added.

Responding to a question regarding the new treaty "Agreement of the Encouragement and Reciprocal Protection of Investments’ (AERPI) with Germany," the Prime Minister said this treaty would replace the Bilateral Investment Treaty (BIT) of 1959 and pave the way for improved investment environment. He said the situation had changed during the last 50 years and it was imperative to evolve a system to give maximum protection to investors so that they felt comfortable.

Prime Minister Gilani said that Germany had agreed to facilitate Pakistan in making free trade agreements (FTAs) with the European Union member countries, besides providing Pakistan market access to the European markets. Under the AERPI, he said, the German government would help create conducive atmosphere and provide government guarantee to the German investors in Pakistan, besides providing them credit.

About international funding for rehabilitation and reconstruction of the operation-hit areas of Malakand and South Waziristan Agency, the Premier said the government had requested damage assessment with the World Bank and Asian Development Bank. "We decided to make Malakand a role model to attract people to come into the mainstream and the estimated cost of rehabilitation and reconstruction is 1.2 billion dollars, and we raised the issue of funding through government institutions," he said.

He said that the government assured complete transparency and refined infrastructure, saying that if the funds were utilised through the NGOs, then only 25 percent amount could be spent as the NGOs would utilise about 75 percent for their own purposes. "We told them to use our channels and we assure you of complete transparency. Besides, we have set up a Trust Fund," he added.


Purchase of bulbs at ‘high prices’: TI seeks government clarification
Dawn December 4, 2009

ISLAMABAD, Dec 3: While the Transparency International Pakistan has sought clarification from the government on reports about purchase of energy-saver bulbs at higher than market prices, the Ministry of Water and Power has defended the decision and said that a ‘very transparent process of evaluation’ has been followed in accordance with guidelines set by the Asian Development Bank.

Referring to a report published in Dawn on Dec 2, the Transparency International said it was a very serious allegation which concerned the Pakistan Electric Power Company as well as the ADB.

In a letter to Pepco managing director Tahir Basharat Cheema, TI’s Pakistan chapter chairman Syed Adil Gilani sought confirmation whether an “Integrity Pact” had been signed by the supplier, which is mandatory in all procurements made by federal governments, even on procurement made under ADB or funding by any international financial institution.

A spokesman of the Water and Power Ministry said the project aimed at procuring 30 million high-quality Compact Fluorescent Lamps (energy savers) through international competitive bidding followed by distribution to domestic consumers in exchange of 40-100 watt incandescent bulbs.

He said the contract would be placed after its approval by ADB, which was financing the project.

The PC-I document of the project contained only an estimated indicative cost of lamps delivered at stores designated by distribution companies (Discos), he said. The lamp cost only $1.37 apiece, besides duties and taxes, cost of containers, transportation, warranty requirements and other miscellaneous charges.

The spokesman said the actual cost per lamp would emerge after the international competitive bidding process was complete.

He said it was a normal practice in foreign-funded projects that international price of equipment and material was taken in the PC-I for estimation. Subsequently, this cost was placed as ‘in-built’ in the programme which was designed by the ADB, he added.

The spokesman said that under the project, the specification required purchase of lamps of high quality and long life and with standard harmonic distortion.

The lamps will have a life span of 10,000 hours, two years’ warranty and total harmonic distortion of less than 30 per cent. All these features are not there in any brand available in the market.

The Transparency International also requested Pepco to clarify the rules under which Rs225 is being paid for a bulb available in the open market for Rs140, causing a loss of about Rs3 billion to the exchequer, as reported by Dawn.


Govt buying energy saver bulbs at high rates
Dawn December 2, 2009

ISLAMABAD, Dec 1: In the midst of severe energy shortfalls, the government is learnt to have decided to procure about 30 million energy saver bulbs for free distribution at rates much higher than in the retail market.

The Central Development Working Party headed by Planning Commission’s Deputy Chairman Sardar Assef Ahmed Ali last month approved the Rs6.7 billion national compact fluorescent lamps (CFLs) project for free distribution of about 30 million CFLs as a measure to conserve energy. About Rs5.3 billion will be borrowed for the project from the Asian Development Bank.

Energy experts are of the opinion that the government is adopting an old CFL option which is environmentally less viable than the new technology of LEDs (light-emitting diodes) and compromising on transparency by paying Rs85-100 more than the market price at the cost of national exchequer.

The cost of the project could be brought down by Rs2.5 to Rs3 billion by negotiating a better price.

Documents made available to Dawn suggest that the CFLs would cost about Rs225 per bulb. To be procured at about Rs165 per piece ($1.97) by the Pakistan Electric Power Company (Pepco), the bulb is available at less than Rs140 in the retail market and shopkeepers readily agree to Rs135 per bulb if purchased in bulk.

The government could have further reduced the price of CFLs by negotiating bulk purchases with manufacturers.

The documents suggest that the project was approved only on the premise of an estimated energy saving of Rs17 billion despite certain objections raised by the Ministry of Water and Power — the parent organisation of Pepco.

The ministry’s adviser had pointed out that “keeping in view the production of higher order harmonics in CFLs working, which may heat up the feeders and distribution transformers, sponsors (Pepco) may consider the future technical problems after adding these CFLs in the system”. He said that the quality of CFL was a serious issue and, therefore, quality/warranty mechanism adopted by sponsors might be clarified.

According to him, Pepco claimed that the project was being implemented after approval by the prime minister, but it did not provide any evidence of the approval. The adviser said that the basis for per unit cost of the bulb at $1.97 had not been justified nor had the economic analysis of efficiency and energy saving for the existing tube-lights been furnished.

“Transparency of the entire project is doubtful,” said Arshad H. Abbasi, an energy expert and consultant for the United Nations Development Programme on water and power. He said that CFL was not a sustainable energy conservation solution but a waste of public money.

He said there were certain people who wanted to make money in the name of energy savings. He said the government should have made power companies responsible for loss reduction and developed cheap hydel power projects, instead of monitoring quality of foreign CFLs manufacturers.

Faridullah Khan, managing director of Enercon (ministry of environment), agreed that LEDs were more environment friendly, economical and efficient than CFLs, but said the introduction of CFLs was the first step in the emergent situation and LEDs could be adopted subsequently. He also agreed that targets set under the five-year plan for reduction of pilferage and technical losses could not be met.

Planning Commission’s spokesman Muhammad Asif Sheikh defended the project and said it would help conserve energy. He said the sponsors had also been asked to look into local manufacturing of CFLs.

When asked that companies like Philips and Osaka were selling CFLs at much lower prices than approved by the Planning Commission, he said the quality of Pepco-sponsored CFLs would be better.

The director general of Pepco’s energy conservation could not be reached for comments despite requests made through its public relations department.