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KESC chief executive officer Naveed Ismail resigns
Business Recorder October 30, 2009

KARACHI (October 30 2009): Chief Executive Officer (CEO) of Karachi Electric Supply Company (KESC) Naveed Ismail on Thursday resigned due to, what he says, personal reasons. However, sources in the utility linked the resignation of the CEO to the persistent criticism of media over the management's failure to improve the distribution and supply system of the utility, failure to control the hours long continued load shedding, an unsupportive Board of Directors, who were critical of Ismail's power management policies and extravagant expenses.

According to the sources, the management under the outgoing CEO not only miserably failed to improve the fragile distribution and generation system of the company, but under him the utility suffered losses of billions of rupees during the last one year. Besides the harsh criticism of media, Ismail had also faced the ire of KESc's shareholders during the recently held Annual General Meeting (AGM) of the company.

The sources claimed that after the shareholders' meeting the directors on board of KESC asked him to resign. The shareholders, they said, had criticised him for the penalty imposed by National Electric Power Regulatory Authority (NEPRA) on the company under the present management over its failure to maintain power system.

They also questioned him as to why the company paid in advance millions of dollars to EGRICO, a Dubai based firm, for the rental power project of 50 MWs. The shareholders also raised the personnel expenditure of the CEO, who had unnecessarily burdened the company of millions of rupees while staying in a lavish suite of a hotel for months.

Though the company provided lucrative accommodation to its chief at its own well-furnished bungalow, spread over 1000 square yard, Naveed Ismail refused to avail the facility and spent around Rs 9 million from company's account on his private accommodation, they added.

Though, the sources said, there were fewer chances of changes in the managerial affairs of the company, the new chief was expected to bring some improvements in the company's power generation, transmission and distribution system. A notification of KESC said the utility's Board of Directors accepted the resignation of Naveed Ismail, who tendered his resignation with effect from November 2, 2009 due to personal reasons.

He, however, will continue to act as a director of the company. The Board has appointed Tabish Gohar, a director of the company, as the new CEO, effective from November 2. Meanwhile, the office-bearers of KESC Shareholders Association have expressed their hope that the new chief of the company would not repeat the same mistakes.


OGDCL managing director Zahid Hussain resigns
Business Recorder October 30, 2009

ISLAMABAD (October 30 2009): Managing Director of the Oil and Gas Development Company Limited (OGDCL), Zahid Hussain, has submitted his resignation to the Petroleum Ministry, well informed sources told Business Recorder. They, however, said the Petroleum Ministry had not accepted his resignation so far. "If the Petroleum Ministry accepts his resignation, it will be forwarded to the Prime Minister for formal approval," sources added.

The government had appointed Zahid Hussain as the new managing director of OGDCL in July 2008. They said he had earlier served as the National Investment Trust (NIT) head and also served as the ambassador of Pakistan to Kenya. Hussain had replaced Arshad Nasir.

Zahid Hussain is the first one who has submitted his resignation to the Petroleum Ministry after Dr Asim Hussain, former adviser to Prime Minister on Petroleum and Natural Resources, resigned. Zahid Hussain was tasked to expedite oil and gas exploration due to increase in oil prices in global market to make the country self-sufficient in energy. The sources said reshuffle in other public sector entities of the Petroleum Ministry was on the cards after Federal Minister for Petroleum and Natural Resources Syed Naveed Qamar took charge.


DHA/PHA Maymar projects: TIP appeals to people to protect their rights
Business Recorder October 30, 2009

KARACHI (October 30 2009): Syed Adil Gilani Chairman Transparency International Pakistan (TIP) has appealed to the public to protect their rights. According to The Sindh Buildings Control Ordinance, 1979 Section 12, following requirements are mandatory.

The builder shall maintain a list of buildings already constructed or transferred by him with full particulars as may be specified by the Authority, including the names, and addresses of the transferees, and the terms and conditions on which the buildings were transferred and shall, on demand of the Authority furnish a copy of such list or part thereof.

Transparency International Pakistan for the Implementation of these rules filed a constitutional petition CP No D 1559 of 2009 in the Sindh High Court. The Honourable HC has ordered on September 10, 2009 that following information shall be posted on KBCA website, within 1 week, and the advocate of KBCA has agreed to comply with the orders.

5.1 No objection certificates for sale of units in buildings, which shall include at least the following details; (similar terms are to be posted on website for plots under 5.2)

5-1.2. Contractor All Risk Insurance Policy.

5-1.3. Undertaking of the Developer/Builder/Professional.

5-1.4. Determination of Price and Cost Estimate.

5-1.6. Security Deposit.

5.1.10. Agreement with Allottee.

5-1.11. Payment of Instalment.

Accordingly, as the DHA City Karachi, and PHA-Maymar Tower, Karachi are two Public Sector Housing Projects in Gadap Town, Karachi, which falls under the jurisdiction of CDGK and are required to follow the Karachi Building & Town Planning Regulations, 2002.

The balloting for allotment on flats are being held shortly. Transparency International Pakistan requests all allottees to sign the KBCA Model Agreement Between the Builder and the Allottee, which shall protect the legal rights of allottees. The Model Agreement is available on KNCA website www.kbca.gov.pk.

TI Pakistan wants public to know specially following clauses of the Agreement: The payment of instalments shall be made by the Allottee through cross cheques/pay order in the name of builder/developer strictly according to the schedule of payment approved by KBCA (form DNP-1 Annexure-6) attached to the agreement.

In case of the cancellation of booking due to non-payment of instalments, the builder will cancel the unit and in case the cancellation is made before the execution of agreement, the developer shall refund the total amount paid till date by the Allottee within 30 days. However, if the agreement has been executed 4 percent of the paid amount shall be retained by the builder and rest will be refunded within 30 days.

That the allotee, if so wishes, can withdraw from allotment of the flat/shop/offices/house/plot on surrendering the original letter of allotment/allocation to the builder/developer, and in that event the DHA/PHA Maymar will refund all amount deposited till date time after deduction of 4 percent of the paid amount as establishment/service charges within 60 days. However, in case of further delay in refunding by the DHA/PHA Maymar a surcharge at prevailing bank rate shall be paid to the Allottee on the amount to be refunded.-PR


KESC’s affairs
Dawn October 28, 2009

KESC’s shareholders want answers and understandably so. The utility’s management was bombarded with questions at its annual general meeting on Monday as investors wanted to know the reasons behind the electricity company’s dismal performance and demanded an explanation about certain financial anomalies. The shareholders reflect the concerns of Karachi’s power consumers. Topping the agenda was why KESC has failed to provide uninterrupted power supply to the city. The meeting was told that the utility’s power generation capacity had decreased by 4.62 per cent, while there had been an increase in transmission and distribution losses over the previous year. If these are official figures, one wonders how high the actual ones are. What also irked shareholders was the KESC CEO’s reported hotel bill of Rs9m when the company maintains an official residence.

This sad saga of ineptitude is becoming too familiar. Things were not perfect when KESC was privatised in 2005, yet it seems that the situation has gone from bad to worse. Memories of the summer of discontent, when Karachi suffered from crippling blackouts in June and July 2009, are still fresh. For its part, the utility’s management has claimed that ‘influential’ people and government departments are involved in power theft. There is certainly some truth to this. Many ordinary citizens too indulge in power theft. But merely complaining about this practice is not enough. Action needs to be taken soon. KESC and the government must chalk out an effective plan to eliminate or at least minimise power theft. The government should start the campaign by disciplining its own errant departments. KESC also needs to set its house in order. All the electricity in the world will not end the power crisis until transmission and distribution losses, currently estimated at 36 per cent, are contained.


TIP holds poster painting exhibition against corruption
Business Recorder October 28, 2009

KARACHI (October 28 2009): Transparency International, Pakistan (TIP), organised 6th poster painting exhibition here on Tuesday to raise awareness among schoolchildren against corruption. The exhibition, with the theme of 'Child's view of Corruption' was sponsored by USAID held at Arts Council. Some 20 schools from across the province participated in the exhibition to portray their experiences and disastrous effects of corruption on the society.

Talking to Business Recorder after awarding certificates to the children, Dr N I Khowaja, Director, Projects, of TIP, said that it had been striving for long to eliminate this menace from society. For the purpose, TIP has taken on board the academic institutions, including schools, colleges and universities, to join hands in the war against corruption.

He said that TIP had organised several programs for youngsters in collaboration with City District Government Karachi (CDGK) and citizen foundation aimed at spreading awareness against corruption, which played vital role in their character building.

He termed corruption as a social evil, which could only be eradicated with joint efforts of every segment of society thus TIP incessantly engages youth through this sort of events to realise them about their obligations and also motivate them to pay their due responsibilities for the betterment of the society. He said that awareness of the masses against corruption is the best way to combat it, whereas the enforcement may be resorted as a last tool and this kind of event is one of the steps of awareness and prevention drive against corruption.


Hiring of PR firm: TIP seeks details of contract from MoIP
Business Recorder October 28, 2009

ISLAMABAD (October 28 2009): Transparency International Pakistan (TIP) has sought details of contract from the Ministry of Industries and Production regarding a contract with an Islamabad-based Public Relations (PR) firm to project the image of the ministry, official sources told Business Recorder. It may be mentioned here that Business Recorder has already carried an exclusive news item on this subject.

"Industries Minister Mian Manzoor Ahmed Wattoo received a letter from the TIP on Tuesday, asking him to provide evaluation report and contract agreement," the sources added. According to informed sources, Pakistan Industrial Development Corporation (PIDC), a Karachi-based subsidiary of the Industries Ministry, will pay the fee to the PR firm, which is about Rs 0.7 million, of which Rs 0.5 million lump sum will be monthly amount, in addition to other expenses of about Rs 0.2 million.

A three-member committee of PIDC has given 65 marks to the selected firm, but it is unclear, which mechanism was used for this purpose. The other two bidders had offered lower rates than the one selected. The TIP, in its letter, copy was obtained byBusiness Recorder from the Ministry, requested the Ministry to confirm the news on the appointment of the PR firm.

"In case the news is correct," the TIP letter states, "kindly provide the evaluation reports and contract agreement, which the TI Pakistan is requesting under the provision of Public Procurement Rules 2004, Rule No 47, Public Access and Transparency. "As soon as a contract has been awarded, the procuring agency shall make all documents related to the evaluation of the bid and award of contract public.

"All procurements are to be made according to Public Procurement Rules 2004 in accordance with SRO S.R.O. 432(I)/2004 issued on June 9, 2004, and for selection of firms for such services Rule No 36 (b) is applicable." The rules state: "After the evaluation and approval of the technical proposal, the procuring agency, shall at a time within the bid validity period, publicly open the financial proposals of the technically accepted bids only.

"The financial proposal of bids found technically non-responsive shall be returned un-opened to the respective bidder. The financial proposals of bids shall be opened publicly at a time, date and venue announced and communicated to the bidders in advance and the bid found to be the lowest evaluated bid shall be accepted.

"If this contract is above Rs 10 million, the PR firm shall sign the anti-bribery pacts "integrity pact," which shall be made part of the contract agreement," said the TIP in the letter. The TIP is of the view that information is required to check that rules have been complied with in the process of procurement, and any violation of Public Procurement Rules 2004 amounts to declaring the procurement as misprocurement under Rule No 50.




KESC creating artificial power shortage
Business Recorder October 22, 2009

KARACHI: The Karachi Electric Supply Company Limited (KESC) is deliberately avoiding clearing outstanding dues of the independent power projects (IPPs), roughly about Rs 7 billion, to create artificial shortage of power in the city.

KESC's reply to National Electric Power Regulatory Authority (Nepra) on the alleged purchase of power through rental power projects (RPPs), instead of its own thermal power plants, "thereby declaring the practice against the prudency of business", has been described as "total lie" by Transparency International Pakistan (TIP). Nepra had sought KESC's reply on TIP's complaint on the subject.

Syed Adil Gilani, Chairman of TIP, in a letter sent to Khalid Saeed, Chairman of Nepra, on October 17 said: though the copies of agreement of KESC 2005 and amended agreement of 2009 have not been supplied to TIP, which is a gross violation of Public Procurement Rules 2004, Rule No. 47, it is comfortable with the current actions taken by Securities & Exchange Commission of Pakistan (SECP) and Nepra. Heavy fine has reportedly been imposed by Nepra which is the regulatory authority on KESC for its failure in maintaining regular power supply and not utilising power from it own plants and those of IPPs.

The TIP chairman said that Gul Ahmed Energy Ltd has confirmed to him that KESC has not paid their outstanding dues of over Rs 3 billion which resulted in total stoppage of power in last three months on two occasions--once for five days and on another occasion for 15 days. KESC is only paying in installments of 4-5 days for fuel purchase to the two IPPs, i.e., Gul Ahmed Energy Ltd and Tapal Energy. The total outstanding dues of Rs 7 billion of the two IPPs have not been paid by the KESC, he said.

He asserted that in accordance with 2005 agreement, $ 400 million were to be invested in KESC for repairs, maintenance and operating expenses. When Abraj, the present owners, bought the shares and took over the management, they knew the agreement conditions, and were obliged to provide the funds.

Adil says that KESC is a willful defaulter. He has also mentioned in his letter to Nepra that KESC has been indulging in hiring "sons and daughters of ruling coalition legislators, at very high salaries, and using them as lobbyists". These allegations also need to be verified by SECP and Nepra.

KESC's denial that it is not seeking any rental power is contrary to the reports available with TIP. The RPP service contract between Walters Power International and Lakhra Power Generating Company Ltd at Korangi, Karachi, of Dec 24, 2008, for five years, confirms that KESC is the user of this 205 MW RPP. "It has been reported to TIP that KESC management is deliberately creating energy shortage by not paying the dues of IPPs and other energy suppliers to justify the setting up of RPP as urgent need, which will be at Rs 23 per unit."

TIP has requested Nepra and SECP to take up these issues with KESC. "Kindly take lesson from Competition Commission of Pakistan (CCP) which has imposed a fine of Rs 6 billion on cement cartel. Nepra and SECP need to take serious measures so that KESC performs its obligations towards users and strictly in accordance with the agreement terms of 2005, and avoids unethical practices as has been alleged by complainants".

In response to the letter written by TIP Chairman, SECP Chairman Salman Ali Shaikh, on KESC affairs, had assured TIP that the matter "has been taken up with the KESC by calling relevant information and comments/explanation to further probe the alleged irregularities". He was further assured that "the Commission is continuing its efforts to safeguard the interests of the shareholders", and thanked him "for bringing various issues to the notice of the Commission".

The KESC, in its reply sent to Nepra on Oct 5, had denied that it had not made payments to Gul Ahmed Energy Ltd as a result of which the IPP had stopped supply. "Gul Ahmed Energy Ltd continues to supply KESC with up to 125 MW of power, despite outstanding payment, which result from non-payment by other entities."

It also described as "factually incorrect" the allegation that KESC is seeking rental power projects which will be costlier than power supplied by IPPs. KESC is not seeking any additional rental power. KESC has 50 MW of rental power in place at the moment, which is provided at a highly competitive price, and is in fact cheaper than the current IPPs.

Truth is sour. To what extent KESC was irked by the complaint lodged by TIP with the SECP and Nepra, could be judged from the last para of KESC's reply to Nepra. It requested: "to treat any further correspondence received from Transparency International Pakistan as frivolous and without merit. Responding to such junk mail only confers a sense of legitimacy and self-importance upon individuals and entities of no substance".




Latif Khosa’s appointment as OGDCL attorney questioned
Dawn October 21, 2009

ISLAMABAD, Oct 20: The Pakistan chapter of Transparency International has expressed concern over Senator Latif Khosa’s appointment as attorney of the Oil and Gas Development Corporation when he was serving as the attorney-general of Pakistan.

Citing media reports, the Transparency International Pakistan asked chairman of the OGDCL to furnish the evaluation report, contract agreement and a copy of the ‘integrity pact’ under rule 47 of the Public Procurement Rules of 2004, besides confirmation that the contract was awarded based on Rule No2(c).

According to rule number 2, competitive bidding means a procedure leading to the award of a contract whereby all interested persons, firms, companies or organisations may bid for the contract and include both national competitive bidding and international competitive bidding.

In a letter to the OGDCL chairman Syed Zahid Hussain sent on Oct 20, TIP chief Syed Adil Gillani said that any violation of the Public Procurement Rules might result in “mis-procurement and the top law officer of Pakistan if found indulging in this violation, action under PPR rule No 2, (Corrupt Practice) may be taken against him and the OGDCL”.

Public Procurement Rules, he said, had eliminated “all discretions in procurement processes and avenues of corrupt practices in tendering”.



PPRA called for report on violation of PPR by PHA
Business Recorder October 17, 2009

ARACHI (October 17 2009): The Public Procurement Regulatory Authority (PPRA) has called for a comprehensive report and comments from Pakistan Housing Authority (PHA) regarding violation of Public Procurement Rules (PPR)-2004. Following a complaint received from Transparency International Pakistan (TIP), the information has been called by PPRA under section 5(2)(i) of the PPRA Ordinance 2002.

On October 5, TIP Chairman Syed Adil Gilani sent a letter to the Managing Director of PHA, Muhammad Abbas, relating to the allegations of violation of PPRA Rules in the process of making a Joint Venture with Maymar for PHA-Maymar Tower, Karachi. It was also pointed out that PHA has to abide by the building byelaws of Karachi Building Control Authority (KBCA).

TIP had sought modalities as to how PHA secured assurances that PHA-Maymar Tower shall not default on any of the KBCA byelaws. Since no response was received from PHA, another letter was written by TIP on October 15, highlighting that PHA-Maymar Towers was reportedly violating KBCA byelaws 5.1.9 & 10.

According to these byelaws, PHA-Maymar Towers shall confirm the allotment of a unit within 15 days of booking and shall sign agreement with 15 days of the issuance of allotment order. The allocation of the plot shall be confirmed by the developer through an allotment letter to the allottee as specified in Form DNP-2 annexure 14, within 15 days of booking.

The allotment letter shall specify the plot number, sector or block, general facilities, total price of the plot and details of other charges. If the allotment letter is not given within 15 days then the developer shall pay mark-up to the allottees at the prevailing bank rate.

Within 15 days of the issuance of allotment letter and before calling for other instalments in respect of the plot, the developer shall, in pursuance of clause 5(4) of the Ordinance, execute an agreement with the allottees as specified in Form DNP-4 in case of the failure of the developer he shall pay the mark-up to the allottee at the prevailing bank rate in addition.

The TIP letter said that PHA-Maymar project has reportedly received thousands of applications, with unkown advance payments with the application, but has not allotted a single unit yet. The applicants were supposed to get the allotment letters within 15 days of booking, which has not been done.

According to the byelaw 5.1.9, it is mandatory on PHA-Maymar Towers to pay bank interest to all such applicants who have submitted their applications. It is not confirmed from the advertisement of DHA that this mark-up will be paid by them.

The TIP letter said: "By the alleged violation of the KBCA building byelaws, PHA-Maymar project is making undue profits out of booking funds, and depriving the citizens of Pakistan their legal rights. The sample agreement form was sent for information which confirms that PHA-Maymar Towers JV are responsible for various commitments to be given to the allottees and, in case of default, heavy penalties are to be borne by them which means Government of Pakistan also." PHA has again been requested to respond on the factual position to its letters urgently.


Management blamed for PSM crisis
Dawn October 18, 2009

ISLAMABAD, Oct 17: The Senate Standing Committee on Industries and Production blamed on Saturday the management of Pakistan Steel Mills (PSM) for the financial crisis faced by it.

A meeting of the committee, presided over by its chairman Senator Ishaq Dar, asked the PSM management to renegotiate rates with raw material suppliers and freight companies in order to avoid such a crisis in future.

Mr Dar said that although a decline in prices of raw material and freight charges at the international level had caused huge losses to the PSM, these were part of routine business and the management had to be aware of the situation.

The committee asked the Ministry of Industries and Production and the PSM management to chalk out a roadmap to bring the company out of the current financial crisis.

Industries and Production Minister Mian Manzoor Ahmed Wattoo informed the meeting that his ministry had a supervisory role in the affairs of Pakistan Steel.

“PSM has its own board of directors to take decisions,” the minister said, adding that the ministry had been issuing directives to the senior management of PSM and warning it of financial losses “time and again”.

PSM chairman M.M. Usmani briefed the meeting on mills’ operations and presented an inquiry report on financial losses incurred by it.

Members of the committee opposed the idea of privatising PSM and observed that it had contributed a lot to the country’s economy.

Mr Dar assured the management that PSM would be provided all possible support to improve its financial position.

A sub-committee headed by Senator Haroon Akhtar Khan was set up to review accounts of Pakistan Steel in the light of the presentation given by its chairman.

The members pointed out that since the inquiry report had held the former chairman of PSM responsible for taking all financial decisions, action should be taken against him. They also recommended that the name of former chairman should be placed on the ECL and the audit should be completed as soon as possible.

The meeting was attended by Senators Adnan Khan, Gul Mohammad Lot, Mir Hasil Khan Bizenjo, Mrs Semeen Siddiqui and Haroon Akhtar Khan.


Inquiry into PSM affairs: Ministry may be grilled over report delay
Business Recorder October 15, 2009

ISLAMABAD (October 15 2009): The Ministry of Industries and Production is likely to be grilled by the Senate Standing Committee on Industries and Production on Friday for misrepresenting an inquiry report on the financial mismanagement in Pakistan Steel Mills (PSM), well-informed sources, close to Minister for Industries, told Business Recorderon Wednesday.

There was an emergency-like situation in the ministry after the Standing Committee directed the ministry to submit reasons as to why the inquiry report had not been placed before it within the stipulated time, the sources added. The sources said that committee Chairman Senator Ishaq Dar had also taken a serious note of the ministry's mis-statement over the report, which was scheduled to be discussed two months ago.

The Ministry of Industries had constituted a three-member committee to conduct an inquiry into the recent massive financial losses incurred by PSM and to examine its audited accounts for the last three years. The committee, headed by Chief Executive Officer (CEO) of Pakistan Industrial Development Corporation (PIDC), Karachi, comprised Joint Secretary (CS Wing), Industries Ministry and General Manager (Steel), and Engineering Development Board (EDB).

According to the notification, a copy of which is available with this correspondent, the committee was to make a presentation to the Standing Committee of the Senate on Industries and Production on August 28. However, on that day (August 28), the Industries Ministry indicated that the inquiry report was incomplete, and committed to submit it in a subsequent meeting, which is yet to be scheduled.

Official documents show that the Industries Ministry blatantly misinformed the Senate Standing Committee as to the inquiry committee's report's availability. Documents available withBusiness Recorder show that the committee's report was completed on August 26.

"The Industries Ministry has been asked to present the inquiry report pertaining to recent financial loss incurred by the PSM along with reasons for not submitting the report to the committee within the stipulated time," the sources added.

The ministry, the sources said, would also give a presentation of the last three years contracts awarded by the PSM, including the break-up of Rs 22 billion loss. The ministry will identify names of those officials, who signed for the purchase of new material, payments made and cash flow of last three years.

According to the inquiry report, the PSM earned profits from 2000-01 till 2007-08. The company incurred a gross losses of Rs 19.5 billion (59 percent of its net sales) during 2008-09. This loss was further aggravated by a mammoth rise of about 200 percent in general and administrative expenses in comparison to the previous year.

Thus pre-tax loss, suffered by the company during 2008-09 was Rs 22.1 billion as compared to a profit of Rs 3.6 billion during the preceding year. The main reasons for the colossal loss of the PSM for the year ended on June 30, 2009 were as follows:

-- Non-action by the management to safeguard the company's financial position in view of abnormal decrease in the international price of raw material and freight charges. In 2005-06, the former chairman had successfully negotiated a 25 percent reduction in the price of coal that led to the dilution of the negative effects of similar international price trends even after signing agreements with international suppliers, thus averting a loss.

-- Pakistan Steel did not adjust its price proportionate to the increase in international prices. For instance, in July 2008, the landed cost of imported billet was Rs 104,873 per ton, whereas the price of PSM billet was Rs 60,537 per ton. The price of imported billet was drastically reduced in July 2008 from Rs 99,555 per ton to Rs 47,000 per ton in October 2008, whereas the PSM, instead of reducing its price, raised it from Rs 60,537 per ton in July 2008 to Rs 63,036 per ton in October 2008, which resulted in piling up of inventories.

-- Record of the PSM Board of Directors meeting on November 26, 2008, indicate that the Board directed the management to constitute a high-powered committee to negotiate with foreign raw material suppliers and freight companies to adjust their prices by offering a discount equivalent to the differential amount of current prices.

-- These directives were not acted upon in letter and in spirit. The stand, taken by management, was that the PPRA rules do not allow for such actions. It is interesting that on a reference by the PSM at a later stage, the company's lawyers Aga Faquir Muhammad & Co rendered their opinion vide their letter dated April 4, 2009 that PSM can negotiate with international suppliers and freight companies and the PPRA rules need not deter the company from this action.

-- It also transpired from the record that the 'Baltic (Freight) Index' was dropped by almost 80 percent during 2008-09, but the management failed to avail of any reduction in freight charges.

-- If the rates of raw material and freight had been re-negotiated by PSM, then as per calculations made by the PSM Finance Department, billions of rupees would have been saved. It transpired that a note in this connection was submitted by the General Manager (F&A) of Pakistan Steel on January 6, 2009 for the Chairman's approval, but apparently the matter has lingered on.

-- Previously, on more than one occasion, the company had allowed huge upward revision of 50 percent to 70 percent in international freight charges when the international market rate increased. The reluctance to renegotiate prices of raw material and freight charges on the pretext of PPRA rules was a criminal act. It is interesting to mention here that under PPRA rules, there is no specific penalty for violation of any section of the rule.

The inquiry committee, in its findings, recommended that as per Articles of Association of Pakistan Steel, the Chairman, being Chief Executive, is accountable for all actions, ie administrative/operational/policy matters etc. Since the Chairman of Pakistan Steel enjoys complete operational autonomy, he can be held responsible for colossal losses suffered by the PSM. However, insiders in the Industries Ministry revealed that the key responsibility of the sacked Chairman was to deal with routine matters, as he was not allowed to take policy decision.


IMF to be approached for financing if Parliament opposes KLB
The Nation October 11, 2009

KARACHI - Federal Minister for Finance Shaukat Tarin has said that if the Kerry Lugar Bill is not approved by the parliament the government would have to approach the IMF to finance the country’s social sector spending and other projects.

He stated this while talking to news personnel here on Saturday after a seminar tilted ‘Corruption in the Private Sector-Causes & Remittances’ held at local hotel. The seminar was organised by Transparency International, Pakistan.

Tarin disclosed that in a bid to improve fiscal governance and broadening the narrow-based tax regime, the law draft of Value Addition Tax (VAT) will be submitted to the parliament by the end of December, 2009 for legislation as the Ministry of Finance and FBR are all set to introduce this programme from next fiscal year.

He said tax reforms are needed to make the economy less vulnerable. Tax administration reforms will broaden the tax base and improve tax efficiency and revenue collection.

He said, ‘It is an indispensable component of the tax reforms needed to achieve fiscal sustainability and to finance the needed increase in public investment without resource to external borrowing or crowding out domestic private investment.’ He also said that instalments of around $521m would be received from USA before Nov 15. He said Economic Advisory Council should be abolished if it is not prepared to play its due role properly however, Planning Commission should be strengthened.

He said Rs10-12 billion worth energy circular debt has left on the part of government and with the financing of Islamic banks Rs 15 billion will be provided to PEPCO to reduce its debt. With this support, Company’s utility debt will be vanished but its commercial debt totalling Rs 8-10 billion, is expected to remain in the book of PEPCO.


More IMF aid will be needed if KLB not approved: Tarin
Business Recorder October 11, 2009

KARACHI (October 11 2009): Federal Finance Minister Shaukat Tarin on Saturday said Pakistan will have to go to the International Monetary Fund (IMF) for more assistance if the US aid under the Kerry Lugar Bill is not approved. Speaking at a seminar on "Corruption in the Private Sector - Causes & Remedies," organised by the Transparency International Pakistan here, the minister said the US aid was a non-military support to be spent on the social sector.

"We don't want to ignore the social sector and the government has planned to allocate more funds for the development for this sector," he added. He pointed out that there is no plan to launch any amnesty scheme to whiten the black money. "I am totally against such schemes that promote corruption and badly hurt promotion of tax tradition," he said.

He said the next tranche of $521 million of the coalition support fund will be received by October 15. He pointed out that the government was slowly removing subsidies. Recently gas subsidy for general public and for the industry has been removed by 2.5 percent to 11 percent, respectively.

He said the tax to DGP ratio is very low in the country and it has to be improved. Presently it is around 8.8 percent while the government has set a target to increase it to 10.6 percent this year. He said tax to GDP ratio has to be increased, as it was stagnant at less than 10 percent for last 10 years. He underlined the need for a tax audit, but said it would be transparent and without harassment.

About Afghan Transit Trade Agreement (ATTA), the minister said it was a main issue and Pakistani government has suggested that the tariff in Afghanistan and Pakistan should be at par to discourage smuggling. He said the government will continue to pursue administrative reforms and encourage meritocracy.

He said the issue of circular debt has been resolved. The target to generate around Rs 90 billion has almost been achieved with the issuance of term finance certificates. He said there is no plan to give any bail out package for the steel sector. He said the government is committed to strengthening the Competition Commission of Pakistan (CCP) and its role as oversight authority is being expanded.

He was of the view that funding of the CCP is the responsibility of the government. According to him the mechanism of funding the CCP through charge of penalties is wrong. The minister said corruption is a scourge around the world. It has a direct bearing on the welfare - economic, social, and quite often, physical welfare too - of hundreds of millions of people in the world, especially in the developing countries.

He said corruption distorts economic outcomes, moving societies away from first-best results. It subverts "property rights" defined in the broadest and undermines the rule of law, weakening the institutional edifice of societies where corruption is endemic. He said corruption hurts the poor and vulnerable the most via higher inflation associated with sub-optimal policy choices, as well as higher costs and poor availability of social services and public goods. He said corruption imposes fundamental welfare costs upon society.

He pointed out that the government, in conjunction with the effort of civil society partners such as TIP, has tried to strengthen, admittedly with partial success in some areas, the institutional framework of economic governance in the country. He said some of the major policy measures include the formulation and ratification by the Parliament of the Public Procurement Rules 2004 - aimed primarily at increasing transparency and accountability of public sector purchases.

Some of the measures taken by the ministry of finance include the enhanced disclosure and transparency of public sector expenditure, particularly of defence spending; the adoption of a Medium Term Budgetary Framework (MTBF) under which budgeting by outcomes is being undertaken; a move towards greater adoption and use of Public Private Partnership (PPP) models to reduce project cost overruns and delays, and to ensure greater efficiency of the Public Sector Development Programme (PSDP) and the strengthening of parliamentary oversight via a quarterly presentation and review of budget and macroeconomic conditions to the relevant standing committees of the National Assembly and Senate. In addition, the leader of opposition in the National Assembly heads the empowered Public Accounts Committee.

He said the government has planned to restructure loss-making public sector entities such as PIA, Railways, Wapda and Pakistan Steel Mills. The restructuring of the Federal Bureau of Statistics will improve the accuracy, timeliness and credibility of official statistics.

The strengthening of AGPR and Auditor-General's offices and the placement of trained Finance Division staff in line with ministries, divisions and departments to improve fiscal discipline and financial governance by performing Chief Financial Officer (CFO)-type role.

He said Fiscal Austerity Committee will recommend measures to improve utilisation of taxpayer's money and effect savings in the government expenditure. "My aim as a finance minister is to be 100 percent compliant with the PPRA rules in force and with international best practice and to ensure the same standards in overall public sector purchases and spending.

He said the government has formulated and enacted Public Sector Purchase Rules 2004 to check corruption in the government and created Competition Commission of Pakistan to discourage cartels. He said much more needs to be done to eradicate the menace of corruption in the country. Sohail Ahmed, Chairman, Federal Board of Revenue said the FBR was not a party to roll back any reforms.

He said that TI Pakistan has not mentioned anything about underinvoicing. The FBR had improved over the years but there is still a long way to go. They had planned performance award for staff achieving targets. He stated that they are establishing a system such as action against taxpayers will not be taken on the whims of some official but all the cases will go through the system stein.

Competition Commission of Pakistan Chairman Khalid Aziz Mirza said the commission has found that trade associations have degenerated into cartels. There was a Mafia effectively working to destroy the law or weakening the commission. The supporters of the law were weak. He stressed on the need for the civil society, media and the government to understand the benefits of the law and give full support to ratifying the ordinance.

Chairman TIP Syed Adil Gilani dwelt on major issues regarding corruption and its wide practices in the private sector of the country. He highlighted the benefits of PPRA, which result in considerable savings as in one tender alone, application of PPRA saved Rs 1.87 billion in Port Qasim Authority. He recommended TI Pakistan suggestion for the application of rule of law across the board without discrimination in the FBR and suggested that the ministry of finance should stop funds of PPRA defaulting departments.

On behalf of TIP, he assured the minister that if PPRA Rules are applied across the board, the resulting savings will generate 30 percent of Development Budget of FY 2009-10 of federal, provincial, corporations and Armed Forces, ie Rs 1,500 billion ($5.5 billion). Arshad A Zuberi, Trustee, TI Pakistan suggested the rule of law across the board without discrimination. Akbar Sheikh, former chairman of All Pakistan Textile Mills Associations and Ehsan Malik, Chairman, Unilever Pakistan also spoke on the occasion


Tarin vows to strengthen CCP
News October 11, 2009

KARACHI: Finance Minister Shaukat Tarin vowed on Saturday to strengthen the Competition Commission of Pakistan (CCP) and expand its oversight.

He was addressing the concluding session of a seminar on ‘Corruption and the Private Sector — Causes and Remedies’, organised by Transparency International Pakistan at a local hotel.

“As long as I am here, I will make sure that CCP is strengthened and its role as an oversight authority is expanded,” he added.

He opposed the mechanism of funding CCP through penalties and said that it was the responsibility of the government.

He said that corruption destroyed economies and hurt the poor by way of high inflation, high cost of products and poor availability of social services.

He said the government had formulated and enacted Public Sector Purchase Rules 2004 to check corruption in the government and created the Competition Commission to discourage cartels.

Tarin, however, noted that more needed to be done to eradicate the menace of corruption in the country. “We have enhanced disclosures and transparency of public sector expenses and adopted medium-term budgetary framework and are encouraging public-private partnership to reduce project cost overrun and delays.

“We are also sharing quarterly macro-economic indicators with relevant committees of the National Assembly and the Senate,” he added.

The finance minister said that the leader of the opposition in the National Assembly had been made head of Public Accounts Committee to bring more transparency in government expenditures and public sector organisations.

“We are restructuring Federal Bureau of Statistics to ensure data accuracy and providing it total independence from the Ministry of Finance.

“We are seeking technical assistance from Canada and Germany in this regard as their bureaus are the best in the world,” he pointed out.

Tarin said that the oversight of the Auditor General of Pakistan was being enhanced to enable it to conduct management audit, process audit and programme audit so that it could have an ultimate oversight on government departments.

He pointed out that there were plans to restructure public sector organisations like PIA, Railways, Steel Mills, Utility Stores Corporation, PASSCO and NHA as they were a drain on the national exchequer.

He said “the prime minister has asked me to create a fiscal austerity committee to recommend measures for properly utilising taxpayers’ money.”

Tarin said that the government was trying to be 100 per cent compliant with the Pakistan Procurement Regulatory Act (PPRA) and “we want to adopt best practices in tendering process for purchase and sale.”

Responding to the points regarding cross-subsidies, he said that the government was slowly removing subsidies.

In the recent move, the government had reduced gas subsidy for general public by 2.5 per cent while the industry got a cut of 11 per cent.

He said that tax to GDP ratio has to be increased, as it was stagnant at below 10 percent for the last ten years.

He underlined the need for a tax audit, but said it would be transparent and without harassment.

Talking of Afghan Transit Trade (ATT), the Minister said that it was a main issue and Pakistani government has suggested that the tariff in Afghanistan and Pakistan should be at par to discourage smuggling.

Finance Minister Shaukat Tarin said that Pakistan can avail bridge financing from IMF to fund its development schemes in the budget, in case of delay in the signing of Kerry-Lugar Bill.

Replying to media questions at the seminar he agreed that the cancellation of this bill can affect our resources. Even in that case, the allocations for social sectors and poverty reduction will not be affected because these areas get insignificant investment. The infrastructure allocations might get the hit, he added.

He said that Pakistan was expecting to get a budgetary support equivalent to $850 to $875 million pledged by the Friends of Pakistan for this year. Kerry-Lugar Bill envisages $500 million for budgetary support.

Replying to a question about circular debt, the minister said that the government has cleared most of amount of Rs90 billion. “Only Rs8 to Rs10 billion are outstanding and that will be cleared in next few days. The PEPCO should only have the commercial debt and receivables on its books,” he noted.


KARACHI: Call for ending ‘public-private’ graft partnership
Dawn October 11, 2009

KARACHI, Oct 10: Speakers at a seminar on Saturday said that corruption was a joint venture of the private and public sectors, and unless civil society kept its strict monitoring, the menace could not be curbed.

Speaking at a seminar on ‘Corruption and the private sector — causes and remedies’, organised jointly by the Transparency International Pakistan and the United States Agency for International Development, they said mostly small fry was caught and the big fish was never touched, which eroded the moral authority of the state.

Federal finance minister Shaukat Tarin said the Competition Commission of Pakistan (CCP) would be strengthened so that it could work more effectively and ensure a level playing field for everyone. He said he was also making efforts so that the auditor-general of Pakistan could also play a more effective role in, for instance, handling issues like the current sugar crisis and ensuring transparency.

He said he was also taking up the Afghan Transit Trade Agreement issue with Kabul to help curb smuggling. He said he was aware that over 55 per cent of tyres and a major portion of tea being used in the country were those smuggled into the country.

He said the Rental Power Plants project had been stayed and the Asian Development Bank asked to conduct a third-party review of the entire process, and a decision whether to go ahead with the project would be taken on the basis of the ADB report.

Mr Tarin said that certain government organisations, such as Pakistan Railways, Pakistan International Airlines, Pakistan Steel and the National Highway Authority, were plagued either with inefficiency or corruption and were draining public resources. He said he had also asked some organisations to conduct surveys to know the public perception of these organisations.

He said he would not initiate any scheme to whiten black money as it encouraged people to evade taxes.

Federal Bureau of Revenue Chairman Sohail Ahmad said that over Rs700 billion tax was evaded annually and that the tax-GDP ratio was less than 10 per cent.

He said that whereas small businesses paid bribes to survive, huge organisations paid it to multiply their already huge profits. In this process, corrupt tax officials and greedy business houses profited at the cost of the state and the poor. He said that efforts were being made to enhance the capacity of the department to check tax evasion.

CCP chief Khalid Mirza said his organisation’s job was to provide a level playing field to every business house, and it had taken stern steps against cartels and monopolies and had fined many organizations found involved in malpractices.

He said the CCP had judicial powers and besides imposing heavy fines, it could also have the culprits imprisoned for up to five years. The CCP decisions could, however, be challenged in the Supreme Court, he said, and added that after action against the cement cartel, he was carrying out investigations into the current sugar crisis and once that report came, a further decision could be taken on it.

He also said the CCP had a provision to reward the informants, supporting and supplementing its investigations.

Ehasn Malik of Unilever Pakistan said that Pakistan’s annual tea consumption was 170,000 tonnes, but it imported only 100,000 tonnes. Similarly, Afghanistan’s annual tea consumption was around 18,000 tonnes, but it imported 85,000 tonnes, proving that about 70,000 tonnes of tea imported for Afghanistan was being siphoned back to Pakistan.

He said customs duty on one tonne of tea was Rs100,000, making the evaded duty on 70,000 tonnes of tea about Rs7 billion.

Akbar Shaikh, who is associated with textile industry and contractors associations, shed light on how the government carried out its business here. He said private a power plant in India, with imported coal, sold power at less that Rs4 per unit, but power plants being set up here would sell power at more than Rs15 per unit.

He said another unwelcome development was that organisations set up to meet the country’s strategic and social needs had become real estate developers. He said a World Bank report had shown that improper procurement procedures by government agencies might be causing a loss of around 15 per cent of the procurement value.

Adil Gilani of Transparency International Pakistan, Shamim Kazmi andArshad Zuberi also spoke.


Pakistan Steel audit reports called: Recession as reason for Rs22bn loss unacceptable: SC
Dawn October 8, 2009

ISLAMABAD, Oct 7: The Supreme Court summoned on Wednesday internal and external audit reports of the Pakistan Steel Mills for 2008-09 and refused to accept global recession as a major reason for the Rs22 billion loss it suffered last year.

A bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Jawwad S. Khawaja had taken up suo motu notice of the sacking of PSM chairman Moeen Aftab Sheikh on the basis of an article by Dr Ayesha Siddiqa which appeared in daily Dawn on Sept 11, without giving a show-cause notice.

In her article Dr Ayesha had mentioned Metropolitan, Amreli, Abbas Engineering, Al-Abbas Steel and Abbas Steel as main beneficiaries of the new sales policy of Pakistan Steel.

Mr Sheikh was fired by the Establishment Division on the advice of the Prime Minister’s Secretariat because of heavy losses suffered by the mills, a PSM law officer told the court.

The chief justice, who headed the bench which had reversed the privatisation of the PSM in August 2006, recalled that it was the most profit-making industrial concern when it was put on sale.

After rejecting the reply submitted by Deputy General Manager (Legal) Qamar Mehmood Sindhu, the court ordered both the incumbent and former chairmen of the PSM to submit para-wise comments on facts relating to the losses mentioned in Dr Siddiqa’s article.

The court directed the director general of FIA to submit findings of a probe conducted by the organisation into affairs of the steel mills and asked the industries and production secretary to file comments on contents of the article.

Mr Sindhu conceded that services of Mr Sheikh, who was chairman from May 26, 2008, to August 18, 2009, were terminated and he was blamed for the losses, but the PSM had nothing to do with it since the entire process was handled by the ministry concerned.

He said the losses had slowed down production of billets, but steel manufacturing was not stopped.

Referring to liquidity crunch being faced by the mills, the PSM official said the sale of billets had fallen to Rs1.13 billion in October 2008 from Rs5.5 billion in July 2007.

He said the prices of PSM products had dipped in the third quarter of 2008 because cheap imported products were available in the market.

He said the mills had been writing to the government, especially the finance secretary, to safeguard the interests of the PSM by levying anti-dumping duty.

The court rejected the reply and asked the PSM management to submit its response to the allegations made in the article that the steel mills was suffering losses because it was giving undue benefit to certain dealers.


Supreme Court calls for audit reports of PSM
Business Recorder October 8, 2009

ISLAMABAD (October 08 2009): Expressing dismay over the loss of Rs 22 billion incurred by Pakistan Steel Mills (PSM), the Supreme Court on Wednesday called for its internal and external audit reports for 2008-09 to ascertain who had been responsible for the loss to the national exchequer.

Chief Justice Iftikhar Muhammad Chaudhry disapproved a report/comments submitted before the court on behalf of MM Usmani, PSM chairman, over the issue and directed him along with former Chairman Moin Aftab Shaikh and Secretary Ministry of Industries and Production to furnish detailed comments.

In addition, Federal Investigation Agency (FIA), which is probing the matter, has also been asked to submit its inquiry report before the next hearing, which is scheduled for October 16. A bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Jawwad S. Khawaja issued these directions while hearing a suo motu case regarding Rs 22 billion loss incurred by PSM during 2008-09.

Chief Justice Iftikhar Muhammad Chaudhry had taken notice of publication of an article which hinted at corruption at PSM and removal of its chairman without an inquiry. On August 18, Prime Minister Yousuf Raza Gilani had sacked PSM Chairman Moeen Aftab Sheikh for alleged corruption before an inquiry was instituted or submission of any report detailing any wrongdoing on his behalf.

Meanwhile, the Ministry of Industries had constituted a three-member committee to conduct an inquiry but on the day of presentation of its finding before the Senate standing committee, it indicated that the inquiry report was incomplete, and its three-member inquiry committee would submit it in a subsequent meeting, which is yet to be scheduled.

According to provisional accounts, accumulated losses of the country's largest steel manufacturer mounted to about Rs 26 billion during last 15 months with the addition of Rs 4 billion losses during the first quarter of the current fiscal year mainly due to slow production.

On Wednesday, Qamar Mehmood Sandhu, Deputy General Manager (Legal) appeared before the court and attributed the loss of Rs 22 billion to global economic recession.

He said that steel prices fell by 68 percent due to which PSM reduced its prices by 35 percent. In addition, he enumerated various factors responsible for the loss that included decrease of sales by 26 percent, depreciation of rupee against dollar, issues related to electricity and gas (increase in tariff /load shedding), and closure of re-rolling units in the country due to load shedding.

In addition, he said, the PSM had entered into a long-term contract five years ago regarding procurement of raw material. Therefore, it was bound to import raw material at high prices. He said that the PSM management was stuck with an inventory of Rs 9 billion which it tried to dispose of by lowering prices. On court's query about PSM dealers, he said that Metropolitan, Amreli Steel, Abbas Engineering, Al Abbas Steel and Abbas Steel were among the major registered dealers through which PSM sells its products.

The article on which court took suo motu notice of the issue had said that lowering of prices was meant to benefit one of President Zardari's close friends, Riaz Lalji.

When asked whether any inquiry or show-cause notice was undertaken prior to sacking former Chairman of PSM for his alleged involvement in corruption, the PSM official said: "No such exercise was conducted, and the chairman was removed on the instructions of the Prime Minister". The court will again hear the case on October 16.



Corrupt practices in TCP: AGP detects losses of billions of rupees
Business Recorder October 8, 2009

KARACHI (October 08 2009): The Auditor-General of Pakistan (AGP) has detected losses worth billions of rupees due to corrupt practices in the Trading Corporation of Pakistan (TCP). Details of the irregularities/mismanagement have been given in the Special Audit Report-2009 (SAR) on TCP, compiled by an audit team comprising experienced auditors from the Directorate-General, Commercial Audit & Evaluation, Karachi (DGCA & E).

The AGP is now looking further into the stevedores' cartel which, according to Transparency International Pakistan (TIP), is the biggest corruption cell in TCP. TIP believes that AGP could detect at least another Rs 2 billion losses on this account.

In case corruption is found, under Public Procurement Regulatory Authority (PPRA) Rules of 'Integrity pact', these stevedores and transporters will have to pay 10 times the amount of corruption detected. According to TIP, this means that on Rs 4 billion corruption, AGP could recommend recovery up to 10 times, ie Rs 40 billion. The SAR says that the issues covered in the terms of reference were probed and further investigated.

The results of the audit scrutiny revealed some glaring facts as under:

-- Inflated transportation contract of wheat amounting to Rs 3020.780 million during 2007-08.

-- Expected loss of $10.512 million in cash foreign exchange equivalent to Rs 841 million on account of payment of demurrage on wheat carriers during wheat operations 2008-09.

-- Unjustified delivery of wheat at Gwadar port caused to extra transportation charges of Rs 1,087.582 million.

-- Loss of $1,114 million in cash foreign exchange equivalent to Rs 89.133 million on account of payment of demurrage on wheat carriers during 2007-08.

-- Loss of Rs 540 million on account of purchase of super basmati rice at inflated price.

-- Loss of Rs 222.50 million on account of purchase of super Irri-6 white rice at inflated price.

-- Unjustified changing in the tender opening date of rice and negotiations with other bidders after opening the tender (violation of PPRA Rules-2004).

-- Irregular/unjustified award of time for submission of tender documents against PPRA rules.

-- Loss of Rs 54.979 million due to import of sugar at higher rate.

-- Non-recovery of godown shortage of Rs 383.388 tons of sugar amounting to Rs 11.080 million from the custodian of TCP Pripri godown.

-- Loss of $229,240 equivalent to Rs 18.339 million due to payment of demurrage charges on imported urea.

-- Non-recovery of dispatch money from the suppliers of urea amounting to $99,281.05 million equivalent to Rs 8.042 million.

-- Loss of Rs 120.245 million due to burning of cotton bales at Rahim Yar Khan.

-- Loss due to weak security controls leading to theft of sugar from TCP godowns Rs 1,125,000.

The terms of reference related to:

COTTON: Repeated burning of cotton bales worth Rs 490 million at Rahim Yar Khan, and serious instances of irregularities of the TCP employees in recent purchase of cotton, while grading classes of cotton in field and during testing.

MANAGEMENT/SECURITY OF PIPRI GODOWNS: Large-scale theft and mixing of sand with sugar at Pipri godowns near Karachi, and irregularity in award of contract for renovation and rehabilitation of Pipri godowns.

RICE: Purchase of rice at grossly inflated prices in the last season (season starts from August).

FREIGHT/TRANSPORTATION OF COMMODITIES: Payment of $8.5 million demurrage to shippers due to incompetent TCP shipping, and inflated transpiration contracts of wheat awarded to the favourites in 2008. TIP says that stevedores' cartel comprises of 4-5 firms, who only own the handling equipment.

All of them have colluded for last many years, and whoever is awarded contract by TCP, one common person supervises the operation at KPT, PQA or Gwadar. He is authorised by all firms and given their equipment. This cartel made 300 percent of actual rates from TCP.

The supervisors have opened bank accounts in the names of five firms which are operated by them. By colluding with TCP, these supervisors got approved extra rates for ground handling of cargo at KPT and PQA and took payment from TCP at Rs 200 to Rs 350 per ton and distributed among TCP officers and supervisors Tax returns of stevedore firms would confirm that such amounts, received from TCP, have not been reported in the income tax by these firms.

Adil Gilani, Chairman of TIP, had written letters to the Chairman of TCP on January 23 and January 31 about the violation of Public Procurement Rules, 2004 in TCP procurements, and desired that all procurements in future be conducted in accordance with PPRA Rules or else TIP would withdraw from the MoU signed between TIP and TCP, and declare it through public announcement.

Since no reply has been received, TIP is likely to announce withdrawal from MoU any time. He had informed the TCP Chairman that the tender invited from enlisted firms for stevedoring & handling services for one million tons of wheat at Gwadar lacked transparency and violated Rule 15 of Public Procurement Rules 2004.

The procedure adopted by TCP is to award contracts in packages to various bidders at the lowest quoted rate. This system is known to all enlisted bidders, and is open to making a cartel. Adil pointed out that the procedure adopted by TCP in the procurement of commodities and services is against the rules and is causing colossal losses to the exchequer.


PSM inquiry report: MoI misinforms Senate body
Business Recorder October 7, 2009

ISLAMABAD (October 07 2009): The Ministry of Industries and Production has blatantly misinformed the Senate standing committee on industries, headed by Ishaq Dar, regarding an inquiry report on Pakistan Steel Mills (PSM), as revealed by official documents and sources exclusively to Business Recorder here on Tuesday.

The Ministry of Industries had constituted a three-member committee to conduct an inquiry into the recent massive financial losses incurred by PSM and to examine its audited accounts for the last three years. The committee was headed by the Chief Executive Officer (CEO) of Pakistan Industrial Development Corporation (PIDC), Karachi, and comprised Joint Secretary (CS Wing), Industries Ministry and General Manager (Steel), and Engineering Development Board (EDB).

According to the notification, a copy of which is available with Business Recorder, the committee was to make a presentation to the standing committee of the Senate on industries and production on August 28, 2009 in the committee room of Parliament House.

However, on that day (August 28), the Industries Ministry indicated that the inquiry report was incomplete, and committed to submitting it in a subsequent meeting, which is yet to be scheduled. Official documents show that the Industries Ministry blatantly misinformed the Senate standing committee as to the inquiry committee's report's availability. Documents available with Business Recorder show that the committee's report was completed on August 26, 2009.

The committee's inquiry report states that PSM earned profits from 2000-01 till 2007-08. The company incurred a gross loss of Rs 19.5 billion (59 percent of its net sales) during 2008-09. This loss was further aggravated by a mammoth rise of about 200 percent in general and administrative expenses in comparison to the previous year. Thus pre-tax loss suffered by the company during the year 2008-09 was Rs 22.1 billion as compared to a profit of Rs 3.6 billion during the preceding year.

The main reasons for the colossal loss of PSM for the year ended June 30, 2009 were as follows:

(a) Non-action by the management to safeguard company's financial position in view of abnormal decrease in the international price of raw material and freight charges. In 2005-06 the former chairman had successfully negotiated a 25 percent reduction in the price of coal that led to the dilution of the negative effects of similar international price trends even after signing agreements with international suppliers thus averting a loss;

(b) Pakistan Steel did not adjust its price proportionate to the increase in international prices. For instance, in July 2008, the landed cost of imported billet was Rs 104,873 per ton whereas the price of PSM billet was Rs 60,537 per ton. The price of imported billet were drastically reduced in July 2008 from Rs 99,555 per ton to Rs 47,000 per ton in October 2008, whereas PSM, instead of reducing its price, raised it from Rs 60,537 per ton in July 2008 to Rs 63,036 per ton in October 2008, which resulted in piling up of inventories.

(c) Record of the PSM Board of Directors meeting on 26th November, 2008, indicate that the Board had directed the management to constitute a high powered committee to negotiate with foreign raw material suppliers and freight companies to adjust their prices by offering a discount equivalent to the differential amount of current prices. These directives were not acted upon in letter and spirit. The stand taken by management was that PPRA rules do not allow such actions. It is interesting that on a reference by PSM at a later stage, the company's lawyers Aga Faquir Muhammad & Co rendered their opinion vide their letter dated 4th April, 2009 that PSM can negotiate with international suppliers and freight companies and PPRA rules need not deter the Company from this action.

(d) It also transpired from the record that the 'Baltic (Freight) Index' was dropped by almost 80 percent during the year 2008-09, but management failed to avail any reduction in freight charges.

(e) If the rates of raw material and freight had been re-negotiated by PSM, then as per calculations made by PSM Finance Department billions of rupees would have been saved. It transpired that a note in this connection was submitted by GM (F&A) of Pakistan Steel on 6th January, 2009 for the Chairman's approval but apparently the matter has lingered on.

(f) Previously, on more than one occasion, the company had allowed huge upward revision of 50 percent to 70 percent in international freight charges when international market rate increased. The reluctance to renegotiate prices of raw material and freight charges on the pretext of PPRA rules was a criminal act. It is interesting to mention here that under PPRA rules, there is no specific penalty for violation of any section of the rule.

The inquiry committee in its findings recommended that as per Articles of Association of Pakistan Steel, the Chairman, being Chief Executive, is accountable for all actions, ie administrative/ operational/ policy matters etc. Since the Chairman of Pakistan Steel enjoys complete operational autonomy, he can be mainly held responsible for colossal losses suffered by the PSM.


Transparency International Pakistan expresses concern over hiring of lobbyists in US
Business Recorder October 6, 2009

KARACHI (October 06 2009): Transparency International Pakistan has expressed concern over the hiring of a number of lobbyists in USA, costing millions of dollars to the exchequer. The Public Procurement Regulatory Authority (PPRA), who was sent a copy by Transparency International Pakistan of its complaint "against selection of lobbyists in USA procurement watch", in a letter sent on October 2 to the Secretary, Ministry of Foreign Affairs, has requested that "comments on the contents of the complaint may kindly be sent to PPRA at the earliest.

This information is being called by PPRA under the powers vested in the Authority under section 5(2)(i) of PPRA Ordinance 2002. "The latest hiring of M/s Cassidy & Associates by Pakistan at an incredible amount of US $700,000 plus expenses comes under the conflict of interest, not allowed in the Public Procurement Regulations (PPR) prescribed by Public Procurement Regulatory Authority (PPRA) because Robin Raphael, the newly appointed co-ordinator of all aid to Pakistan was an ex-partner in Cassidy & Associates, according to Transparency International Pakistan.

"It is not clear whether Mark Siegel, the current lobbyist, who is known to be a personal friend of Benazir Bhutto and took pride in claiming to be her personal lobbyist as well, would be retained along with the newly appointed lobbyist or shown the way out". Adil Gilani, Chairman of Transparency International Pakistan, in a letter sent on September 30, to Hussain Haqqani, Pakistan's Ambassador in Washington, had requested him to confirm the news on appointment of "so many lobbyists in USA".

In case the news is true, Transparency International Pakistan has requested under the provision of PPR 2004, Rule No 47 to provide the evaluation reports and contract agreement of all these lobbyists. This is desired to check that the compliance of rules has been observed in the process of these procurements, as any violation of these rules "amounts to declare the procurement as mis-procurement charge under Rule No 50."

Besides previous selections, the procurement of services of Cassidy & Associates as another almost a million-dollar lobbyist, has been made by Pakistan in Washington. Robin Raphael, the newly appointed co-ordinator of all aid to Pakistan, was a key partner in Cassidy & Associates until she got her new job recently. Gilani has quoted Rule 47 and 3 which read as under: Rule 47-Public access and transparency: As soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of contract public.

He has pointed out that all procurements are to be made according to PPR-2004 in accordance with SRO 432(1)/2004 issued on June 9, 2004, and their applicability is described in Rule 3 as under: Scope and applicability: Save as otherwise provided, these rules shall apply to all procurements made by all procuring agencies of the federal government whether within or outside Pakistan.

Such acts, Gilani said, may also come under the definition of "corrupt and fraudulent practices" described in Rule 2(g) and include the offering, giving, receiving, or soliciting of any thing of value to influence the action of a public official or the supplier or contractor in the procurement process or in contract execution to the detriment of the procuring agencies; or misrepresentation of facts in order to influence a procurement process or the execution of a contract, collusive practices among bidders (prior to of after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the benefits of free and open competition and any request for, or solicitation of anything of value by any public official in the course of the exercise of his duty.

Transparency International Pakistan Chairman has pointed out that all contracts above Rs 10 million (US $120,000) shall have anti-bribery pacts "Integrity Pact" signed by the lobbyist as part of the contract agreement. Copies of the letter have been sent to: Chairman, Public Accounts Committee, Chairman, National Accountability Bureau, Auditor-General of Pakistan, and Managing Director, Public Procurement Regulatory Authority.


Violation' of building bye-laws: TI Pakistan moves SHC
Business Recorder October 6, 2009

ISLAMABAD (October 06 2009): The Transparency International Pakistan has filed a constitutional petition in Sindh High Court (SHC) against Defence Housing Authority (DHA) Karachi and 'Emaar' for allegedly violating building bye-laws. Transparency International Pakistan had written a letter to Emaar Giga Karachi Limited (EGKL), local office of Dubai-based Emaar, on September 14, pointing to alleged illegal activity of Emaar, ie sale terms of apartments in Karachi Crescent Bay, which "are against the laws of Pakistan," seeking reply within seven days.

The case is fixed for hearing on Tuesday. Transparency International Pakistan argues that in case of failure to pay the regular instalments, builders' penalties are over and above what is allowed by law. In Emaar project Crescent Bay and Meinhardt Project Creel Marina, 30 percent of the unit prices/total price are being deducted although building bye-laws do not permit a penalty of more than 4 percent of the paid instalments in case of cancellation of the unit.

Thus, instead of deducting a penalty up to 30 percent of the value of the apartment (average Rs 9 million) on cancellation of booking, it should be 4 percent of instalment paid, eg if the instalment amount for a Rs 30 million apartment is Rs 5 million, the penalty should be Rs 0.2 million and not Rs 9 million. TIP has requested these companies to refund the excess penalties within 30 days.

Local as well as foreign builders from UAE and Singapore are active in these fraudulent practices in Pakistan. In many cases, builders make bookings for the same unit in the name of multiple buyers thus opening the scope of blackmail of those of the general public who invest with such builders, Transparency International Pakistan added.

Emaar (Crescent Bay) Meindhardt (Creek Marina) as well as DHA Karachi have failed to respond to Transparency International Pakistan letters sent to them. This forced Transparency International Pakistan to approach SHC for redressal. Emaar (Crescent Bay), Meindhardt (Creek Marina) have more than 500 clients in Karachi, and both projects have been on hold for 3 years (Creek marina) and 2 years (EMAAR), but buyers are forced to pay monthly instalments, or else pay penalty of Rs 9 million.

Transparency International Pakistan, in its prayer, has requested the SHC to take action on this petition and eliminate fraudulent practices by builders in DHA Karachi, regulated by DHA, and order that 'the builders in DHA eg Emaar project Crescent Bay and Meinhardt Project Creel Marina and others, charge only 4 percent of the instalments paid by buyer in case of cancellation of the booking either by buyer or the builder, and in case of delay builder shall pay to the buyer interest at the current bank interest rate on all amount to buyer for the period of delay."

It has also been prayed in the constitutional petition that builders should be directed to maintain registers individually showing the number of units/plots booked with the name of every investor against such unit and display such register at a prominent place in their site office for inspection at all times so to eliminate multiple booking.


Musharraf regime: NHA asked to submit records of contracts, authorisations awarded
Business Recorder October 3, 2009

ISLAMABAD (October 03 2009): The Public Accounts Committee (PAC) on Friday directed the National Highway Authority (NHA) to submit all the records of contracts and authorisations awarded during the tenure of former President Pervez Musharraf. The PAC, which met here with Chaudhry Nisar Ali Khan in the chair, reviewed the performance of the NHA and expressed serious concern over the mismanagement in the department.

The committee members raised voices that the contract for construction of roads, highways, bridges, repair, establishment of CNG and petrol pumps, service areas and other facilities were awarded totally on favouritism by the former president.

The PAC termed Islamabad-Lahore Motorway as a national asset and observed that NHA failed to look after this important asset of the country. PAC members pointed out that restaurants are overcharging passengers, repair work at motorway is substandard and other facilities are deteriorating and no care is being done.

PAC also asked the NHA authorities to present detailed report about how many vehicles of NHA are being used by the ministry officials, number of ghost employees, and details of its camp offices across the country. Secretary Communication and chairman NHA informed the PAC that due to the different contractual issues, the progress of completion of most of the motorway sections could not be completed.

It was also informed that a survey is being conducted along-with motorways to identify the encroachments and once this is completed strict action would be taken against illegal CNG and petrol stations and other construction. Meanwhile, the PAC commended the efforts of Karachi Port Trust management for its measures taken to safeguard the federal government's precious land at Karachi.


Pak pavilion at 2010 Shanghai Expo: MoC supports hike in cost of construction
Business Recorder September 30, 2009

ISLAMABAD: The Ministry of Commerce (MoC) is reportedly supporting the request by senior officials of Pakistan Embassy in Beijing for a 77.6 percent increase in the cost of an already awarded contract for Pakistan pavilion in World Expo 2010, Shanghai (China).

Official documents and insiders in the Commerce Ministry told Business Recorder on Tuesday that the original cost of the deal was 2.8 million dollars, which was being increased total four million dollars.

The contract was awarded to Far East Trading Company Limited (FEOTC) to construct the pavilion.

The sources said Chief Executive Officer (CEO) of FEOTC/ designated Deputy Commissioner General of the pavilion Abdul Wahid wrote a letter in April to Pakistan's Ambassador to China Masood Khan, who is also the Commissioner General of the World Expo, stating that the FEOTC 's initial proposal for the construction of Pakistan pavilion constituted aspects of designing, architectural drawings, structural engineering calculations, interior exhibition design, interior decoration, construction and other aspects of construction in Pakistan.

The letter said that the construction of the building was to be done on a pre-fabricated basis in Pakistan, which would then be transported and assembled on Expo 2010 site located in Shanghai.

"This aspect was discussed on a number of occasions in our face-to-face meetings with the TDAP officials and was also communicated to the Federal committees, which include high level representatives from the Commerce Ministry, Finance Ministry and TDAP," said Adbul Wahid in the letter.

According to him, after the contract was awarded to the firm during subsequent meetings with the Expo 2010 authorities, it was intimated to the firm that the stringent Expo requirements as well as the rigorous and unique building code of the Shanghai city government, coupled with the fact that there has been a considerable delay from Pakistan for its confirmation of participation in the Expo 2010, the company was not allowed to do any of the required tasks in Pakistan.

Furthermore, the contractor was informed to use only Shanghai based A-rated companies, approved by Expo authorities to ensure timely approvals of the relevant designs and thereafter to complete construction of the Pakistan pavilion in time, which is expected to be inaugurated next year.

It was made clear that any design made in Pakistan or any construction carried out in Pakistan would not be acceptable to the Shanghai government or to the Expo 2010 authorities due to the stringent codes and approval processes.

According to the letter, the firm had communicated that the total covered area approved originally was 2300 square meters, whereas the same has now been increased to 2417 square meters as per the requirements of the Expo authorities.

This means the contract had been awarded to the firm without finalisation of the pavilion's space.

It is to be noted that their initial construction proposal was 2,834,500 dollars, however, in view of the unavoidable constraints and unforeseeable restrictions raised by the Expo 2010 authorities, 2.2 million dollars may be provided additionally to the firm to complete the project, which is of national importance.

Consequently, Pakistan Ambassador to China Masood Khan approached the government of Pakistan for enhancement of amount, to be paid to the contracted firm without investigating the claims made by the firm. Earlier, the TDAP had pointed out that the government/ procuring agency will contribute 2.83 million dollars for the Expo 2010, whereas the event manager, Far East Oriental Trading Company Limited, will invest at least 2.09 million dollars from their own resources.

As for the payment schedule, the government was intimated that 15 per cent mobilisation advance is to be provided to the event manager after signing the agreement with the procuring agency, while second instalment of 25 per cent is to be paid at the time of completion of the plinth, the third instalment of 25 per cent at the time of completion of the roof structure of the pavilion and the balance 30 per cent after the completion of the pavilion.

It was also agreed that the event managers from their own resources will meet all expenditure over and above the amount committed by the government and no liability would accrue to the government of Pakistan. The sources maintain that the reason given, i.e. the tendered cost, was different for construction of pavilion in Pakistan, transported to China and erected there is completely untrue as the terms of reference (ToR) of tender were unambiguous in stating that the construction must be executed by the Chinese subcontractors from material to be procured in China. The estimated costs are also part of the tender's TOR.

"What has been written by the embassy to the government for increase in cost of the pavilion indicates that some officials are collaborating with the firm to make more money" assessed one of the officials on condition of anonymity.-MUSHTAQ GHUMMAN


Corruption eats up Rs500bn revenues
The News September 30, 2009

LAHORE: Corruption has been rampant in the country due to political, social and legal weaknesses resulting in a low tax to GDP ratio, depriving the exchequer of Rs500-600 billion revenues and misuse of 20-30 per cent development expenditure amounting to Rs120 billion per year.

Additional Auditor General of Pakistan Muhammad Ayub Tarin stated this while speaking at the media workshop organized by the ACCA at Lahore.

He said in order to curb malpractices the government would have to take all the stakeholders on board through education and awareness. He said accountability should be across the board and enforcement should be without any exception. On the political front, causes of ever-increasing corruption include weak political will, immature political culture, immoral electoral processes, immature political leadership and crisis of leadership.

He said on the social side “we have developed a culture of tolerating corruption.” The high consuming life style he added is appreciated in the country irrespective of the manner in which the wealth is accumulated. He said civil society is still in the formative stage to play a decisive role in eradicating corruption.

He said lower remunerations to public servants are also cited as a cause of petty corruption. He said this is a weak argument to justify extortion which is a crime. He said more than that the huge discretionary powers vested with bureaucracy are the major cause of corruption. Non-adherence to rules and regulations he added not only weaken the writ of the government but also promote malpractices. He said lack of accountability particularly the absence of internal accountability in most of the public sector institutions has provided the bureaucrats enabling environment for corruption.

Moreover, he added the office of the auditor general of Pakistan lacks capacity to audit all government expenditure and restricts itself to 5-10 per cent audit of institutions where the risks of malpractice are higher. He said inefficient judicial system also force the people to get the things done through speedy money.

Tarin said over regulation is a major cause of corruption in the public sector. Rules he added should be simple and clear to discourage corrupt practices. He said the public institutions should be strengthened more through strict internal accountability than depending on external audit where the auditing capacity is limited.

He said a proper check and balance mechanism is the most effective deterrent to transgression of public servants. The additional accountant general said that poverty, under development, widening gap between rich and poor is the direct result of corrupt practices prevalent in the society.

He said good governance and transparency are the main requisite for sustained and equitable economic growth. He regretted that Pakistan is always place among a few of the most corrupt countries in the world by the global institutions. He said though the office of the auditor general has been given an adequate autonomy in the constitution; however there is a need to remove certain irritants through fresh legislation that compromise on its autonomy.


Supreme Court take Suo Moto Action on PSM Corruption?
Business Recorder September 28, 2009

KARACHI (September 27 2009): The Supreme Court of Pakistan has taken a suo motu action regarding allegations of corruption in Pakistan Steel Mills Corporation (PSMC) and asked its management to submit comments, a copy of the SC notice available with Business Recorder says.

Sources in the corporation said that PSMC received a notice from Supreme Court of Pakistan on September 16 for comments on the corruption reports carried by a leading English-language daily. The management of Pakistan Steel is facing serious corruption allegations for the last two months.

These allegations led to the removal of Mueen Aftab Sheikh, Chairman PSMC, on August 18 by Prime Minister Syed Yousuf Raza Gilani. However, other team members of Mueen Aftab Sheikh are still working on their posts in PSMC and are said to be following the sacked chairman's policies, which caused billion of rupees losses to one of the prime national institutions.

Sources said the country's single largest steel producer has posted historical loss of over Rs 22 billion in fiscal year 2008-2009, while July-August losses alone reached estimated some Rs 3 billion mark. According to the sources, during the tenure of the former chairman steel products were sold under cost with special favours extended to some selected dealers. This was done despite a Rs 5,000 premium per ton on the supply of billet offered by some re-rolling mills.

The Supreme Court in its suo motu action notice (case no. 15 of 2009), sent by assistant registrar Muhammad Iqbal, has directed the chairman PSMC to submit its comments on the news reports till September 24, 2009. The acting chairman Rasul Bux Phalpoto confirmed toBusiness Recorder the receipt of the SC notice. According to him, the PSM management will be filing its comments in the next few days.

At present, Managing Director Rasul Bux Phalpoto is serving as acting chairman of the corporation as newly appointed chairman, M M Usmani, is now out of country. The sources pointed out that the public sector entity was a profitable organisation from fiscal year 2000-01 to fiscal year 2007-2008. However, during the last fiscal year, it posted huge losses.

The sources held the sacked chairman responsible for massive losses. The mega industrial unit registered less then target production and sales and import of raw material on high rates. Moreover, ineffective policies and non-technical management are also among the chief causes behind huge losses.

Pakistan Steel's provisional financial documents for the period ended June 30, 2009 show that Corporation faced a historical loss of Rs 22.143 billion during the July-June of fiscal year 2008-2009 as compared to a profit of Rs 2.375 billion in fiscal year 2007-08. The current liabilities of corporation mounted to Rs 28.129 billion in 2009, which stood at Rs 8.24 billion in fiscal year 2008.


TI report on Corruption Opposition parties urge SC to take suo motu notice
Business Recorder September 25, 2009

ISLAMABAD: Reacting to the Transparency International (TI) report regarding corruption, opposition parties demanded of the Supreme Court to take sun morn action against those involved in corruption.

They also called for setting up an independent accountability commission to eradicate the menace from the country.

Talking about the TI report Pakistan Muslim League Nawaz (PML-N) leader Senator Pervez Rasheed said his party had singed Charter of Democracy (CoD) with PPP to control and eliminate corruption from the country.

Underling the need of a fair and independent accountability commission, he said that every one including politicians, civil bureaucracy, print and electronic media, army generals and judges of the superior judiciary should be made accountable.

He lamented that the current government has even ignored the CoD, which was singed by slain PPP leader Benazir Bhutto and PML-N leader Nawaz Sharif. He added that PML-N is committed to implement CoD in letter and sprit, adding that he is not aware who was pressurising the PPP for not implementing the document.

Commenting on the TI report, Pakistan Muslim League (PML-Q) urged Supreme Court to take suo motu notice against those involved in corruption. PML-Q Parliamentary Leader in National Assembly Faisal Saleh Flayat said that there was no good governance in the country. “I have repeated many times that the government is involved in corruption. It has only one point agenda of exploitation and extortion,” he alleged.

He said that the government claimed transparency in its affairs and following the rules and regulations, but the TI report has exposed it’s good governance claim and capability.

He said corruption has plagued many departments of the government. Faisal said the people have pined hopes on Supreme Court and the apex court must demonstrate pro-active role in this connection. He claimed that the dejected people have no faith left in the presented government.


TIP report on corruption: A conspiracy to deprive country of FoDP aid, says Fauzia
Business Recorder September 25, 2009

KARACHI (September 25 2009): The ruling Pakistan People's Party (PPP) on Thursday lashed out at Transparency International-Pakistan (TIP) alleging that the international watchdog was becoming part of a conspiracy to deprive the crisis-hit country of the financial aid to be extended by the Friends.

Addressing a crowded press conference at Karachi Press Club, PPP's Central Secretary Information Fauzia Wahab termed the report of TIP and talks of corruption relating to the financial aid, pledged by the FoDP in Tokyo meeting, as a part of a conspiracy. "TIP's report about corruption in Pakistan is against our national interests... the objective is to influence the public opinion," she added.

In its annual report, "Global Corruption Report 2009", TIP on Wednesday rated Pakistan among one of the world's most corrupt nations on the eve of a high-profile meeting of FoDP scheduled to be held in New York on Thursday, September 24. Calling the TIP claim that no anti-corruption institution exists in Pakistan as incomprehensible, the PPP leader said the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) were working in the country to implement Anti-Corruption Act 1947 in letter and spirit. Fauzia said even the present government had not replaced the NAB chairman.

"Pakistan is a functional state, where all the departments are intact and working well," she said. Rejecting the findings of TIP, she claimed that the allegations of corruption against the present PPP-led coalition government had borne an ill-will that, she said, aimed at depriving the crises-ridden country of around $5.27 billion aid pledged by the FoDP. Questioning the patrons and financiers of TIP and the objectives of its reports, the PPP secretary information also cast doubts over the timing of the issuance of the report.

"Issuance of the report at a time when the FoDP meetings are under way is animosity with the country and... against our national interest." She said Pakistan was spending extensively on the international war again terrorism out of the taxes paid by masses of the country, an ailing economy of which could be bettered with the financial aid of the world's friendly nations. Calling for a probe into the affairs of TIP, Fauzia said the international anti-corruption agency reserved no right to become part of anti-Pakistan conspiracies.


Transparency’s corruption report anti-Pakistan: Fouzia
Dawn September 25, 2009

KARACHI: Central Secretary Information, Pakistan Peoples Party (PPP), Fouzia Wahab on Thursday strongly criticising a recent report of Transparency International Pakistan (TIP) about corruption in Pakistan has said the report is against our national interests.

Addressing a press conference at the Karachi Press Club, Fouzia Wahab said the objective of the TIP's report about corruption in Pakistan is to influence the public opinion.

She said the issuance of Transparency's report at such a time, when the meetings of Friends of Pakistan (FOP) are underway, is not only against the government, but it is also against the country and our national interests.

Rejecting the TIP report's alleged findings with regard to lack of accountability laws in the country, Fouzia Wahab noted that Pakistan is a functional state, where the departments are intact and the anti-corruption departments and Federal Investigation Agency (FIA) are also working.

She said we welcome the criticism but the people have given us their votes and we have to protect their rights.

The PPP leader raised a question as to why such a report had not been published in the past and its issuance at the time of the meetings of Friends of Democratic Pakistan (FoDP) is animosity with the country.

She also raised questions about the credibility as well as the aims of the patrons and financers of Transparency International.

She said the TIP's report about corruption in Pakistan is published simultaneously from New York and Islamabad with intentions against the country.


Call to ensure transparency in armed forces expenditures
Dawn September 25, 2009

KARACHI, Sept 24: The Transparency International (Pakistan) and the Public Procurement Regulatory Authority have asked the chiefs of the army and navy and the defence ministry to implement the Public Procurement Rules to ensure transparency, it has been learnt reliably.

According to sources, in its communication to army chief Gen Ashfaq Pervaiz Kayani on the subject of “Implementation of Public Procurement Rules in Defence Production division and Defence Housing Authorities at Karachi, Lahore and Islamabad” the TIP says these issues “need your special attention”.

TIP chief Adil Gilani, referring to reports of PPR violations, says “there is still a lot to be achieved in procurement in armed forces and handling of funds by DP division and DHAs need special attention”.

The letter adds that TIP does not want “Pakistan armed forces to get a bad name due to any irregularities and violations of public procurement rules 2004.”

In his communication to the Defence Production Division secretary, retired Lt-Gen Shahid Sadiq Tirmizi, on the subject of “National Corruption Perception Survey 2009”, the TIP chief points out that under the rules “all documents related to the evolution of the bid and award of contract” be made public as that would make the process transparent.

Referring to the exemptions for defence purchases, Mr Gilani said no “blanket exemption” was allowed to any organisation and the only “allowed exemptions to Defence Ministry and Defence Productions Ministry were for only those procurements for which the principal accounting officer of the ministry concerned (that is secretary of the ministry) has to certify in each procurement, that it was sensitive in nature, required for defence purposes and their procurement under PRA would not be in national interests.”

In his separate communications to the administrators of the DHAs in Karachi, Lahore and Islamabad, Brig Khalid Tirmizi, Brig Mohammad Aslam and retired Brig Javed Iqbal, respectively, he refers to the PPRA rule that says “as soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of the contract public” so that people had an easy access, and transparency was ensured.

Pointing to these rules, the TIP has asked the army men heading the DHAs to provide evaluation reports of all contracts that had been awarded from 2005 to 2009.

The DHA Karachi has been asked to provide details of the road rehabilitation project, which cost over Rs500 million and it implemented in coordination with the Cantonment Board Clifton. The TIP has, however, not sought details of the DHA’s controversial storm-water drain project that has cost over Rs2 billion, though originally it was estimated to cost Rs700 million.

From DHA Islamabad, the TIP has sought the details of its agreements with different organisations, particularly with Emaar Properties, Meinhart (Pakistan), Habib Rafiq (Pvt) Ltd, Bahria Town, etc.

Meanwhile, PPRA managing director Hafeez-ur-Rehman in his communication to Defence Division secretary Syed Ather Ali says that “despite repeatedly pointing out violations of rules, Ministry of Defence Production has not complied with Rules 12, 13 (10, 23 (1), 33 (1) of PP Rules 2004 while issuing 89 tender notices during April–May 2009.”

In his communication to Chief of the Naval Staff Admiral Noman Bashir, the PPRA on the subject of “corruption news of Naval Headquarters and requirement of public procurement rules” has referred to a TIP complaint.

PPRA deputy director Naeem Ahmed, in his letter to Naval chief Admiral Bashir, says that “a comprehensive report and comments on the contents of the complaint may kindly be sent to PPRA at the earlier. This information is being called by the PPRA under the powers vested in this authority under section 5(2)(i) of PPRA Ordinance 2002.”

Mr Ahmed, referring to the TIP’s complaint has also asked retired Brig Javed Iqbal of DHA Islamabad to send a “comprehensive report and comments on the contents of complaint to the PPRA at the earliest.”


'Illegalities' in Crescent Bay Project: TIP seeks explanation from Emaar
Business Recorder September 25, 2009

KARACHI (September 25 2009): Transparency International Pakistan (TIP) has expressed concern over the illegitimate activities of foreign builders and developers who are 'cheating' the public due to weaknesses in regulatory framework. TIP had written a letter to Emaar Giga Karachi Limited (EGKL), local office of Dubai-based Emaar on September 14, pointing to illegal activity of Emaar, ie sale terms of apartments in Karachi Crescent Bay which "are against the laws of Pakistan," seeking reply within seven days.

Since no reply was received within the stipulated time, TIP forwarded its concerns to Mohammad Al Abbar, Chairman, Emaar Properties Dubai regretting that "it is most unfortunate that Emaar's name is associated with breach of trust, and illegal acts in Crescent Bay Project at Defence Housing Authority (DHA), Karachi."

Legal experts believe that the refusal of Emaar to reply indicates that they have established their local office without subjecting themselves to the rules and regulations of local regulatory bodies, such as the Securities and Exchange Commission of Pakistan (SECP), and the Karachi Building Control Authority (KBCA). In the absence of their registration with local authorities under relevant provisions of local laws, they are answerable to none.

Acknowledging the email sent to Chairman, Emaar Properties by Adil Gilani, Chairman of TIP, Emaar Customer Care, Dubai apologised for delay in response due to Eid holidays. However, they appreciated him "for sharing with us feedback information which is valuable to us, and we assure you of our endeavour to provide the best service at all times."

They also assured that TIP's feedback "is being carefully looked into; Emaar Crescent Bay management will be providing you with further information with regards to your concern."

Adil Gilani in his letter of September 14 had informed that TIP is a civil society organisation, aims at building a coherent National Integrity System (NIS), to institutionalise efforts to curb corruption in public and private sectors, make Pakistan zero tolerant against corruption and make efforts that rule of law is supreme in Pakistan.

TIP said a number of allottees in the Karachi Crescent Bay, being built on DHA Karachi land in phase VIII, have sent their complaints to TIP that they are facing problems due to non-compliance of laws of Pakistan by "you in course of building the project." They have alleged that the selling terms of the units are in violation of the laws of Pakistan.

M/s. EGKL was granted the project, leased on October 3, 2007, in consideration with DHA entitlement of 10 percent of the profit after tax, and payment of US $12.99 million in four years instalments. DHA Karachi is, therefore, involved in the project officially.

The allegations of the complainants are that "you are not complying with the requirements of the Cantonment Act 2004, building by-laws which were issued by Cantonment Board Clifton (CBC) on February 3, 2007, and all builders of public sale projects have to comply with them."

The most serious allegation levelled by complainants is that "you are charging 30 percent cost of the apartment as compensation if the allottee cancels the booking, whereas under the law you can only deduct four percent on the amount of instalment paid by the allottee and refund the balance amount within 30 days."

In case the buyer has paid less instalments than the 30 percent cost of the apartment, Emaar has the right to go to the court against the recovery of balance payment. TIP had requested the Chairman, Emaar to comply with the law and amend the agreement terms of all past, present and future allottees in the project.


Auditors find over Rs18.4 billion irregularities in defence ministry
Dawn September 24, 2009

KARACHI, Sept 23: Financial mismanagement and irregularities adding up to a massive over Rs18.44 billion have been uncovered by the Auditor General’s office in the Defence Ministry’s accounts for the year 2006-07, with auditors adding that “little effort” has been made to improve the system even after the issues, including diversion of public funds, were identified.

The Rs18.44 billion in irregularities add up to more than 19 per cent of the total audited amount.

Some of the observations/objections pointed out in the report, prepared by the Auditor General of Pakistan, are: irregular and unauthorised expenditures; weak contract management and administration; diversion of public funds and other resources for purposes other than specified and to non-public uses; over-payments; non-realisation of receipts; and non-deposit of receipts into government accounts.

The Directorate General Audit, Defence Services, carried out the audit on a test-check basis and, tellingly, it covered just 12 per cent of the Defence Division’s total budget. The division controls the army, navy, air force, military lands and cantonments and other departments.

Eighty-seven per cent of the defence production budget was also covered, including procurement, research and development, etc of weapons and other goods.

The total audited amount, therefore, aggregated to more than Rs96.5 billion.

The report says that a lot of “observations” – meaning objections – remain unsettled owing to disagreements between the auditor and the auditee; inaction on the agreed lines and time-frame; and non-reporting of action taken, if any.

Land management issues – including commercial use of non-commercial land, its encroachment and non-deposit of receipts into government treasury – in cantonment areas continued while contract management and administration issues need to be reviewed and improved. Some of the major audit observations mentioned in the 118-page report are given below:

Lahore Cantt: Over 1,159 acres of Class A-1 land were being used for commercial purposes in Lahore Cantonment without the government’s sanction and the payment/rent and income — which, as calculated by the audit, comes to over Rs2.78 billion per annum — received from there was also not being deposited into the government treasury. Though the auditee said that commercial use of A-1 land would be regularised under the new policy, no progress was shown to the auditors till finalisation of the report.

Lahore MEO: According to the records of the Military Estate Office, Lahore, more than 55 acres of Class A-1 land had been occupied by the National Logistics Cell without the government’s sanction and the NLC, being a commercial organisation, was liable to pay premium and annual ground rent – totaling over Rs2.8 billion – which had not been done. The amount as pointed out by the audit needed to be recovered.

Hyderabad encroachments: Approximately 58,000 square yards of land, of different categories, in the Hyderabad Cantonment had been encroached upon by various civilians, but no action had been taken by the Military Estate Office either to reclaim or to regularise it.

The inaction on the part of the authorities had caused approximately Rs730 million losses to the state. Though the authorities said that efforts were being made to vacate or regularise the encroached land, no proof or indication of further progress was provided.

Similarly, over 120,450 square feet of Class A-2 and B-4 in the purview of the Hyderabad Cantonment Board were being used for commercial purposes without obtaining sanction of the government for re-classification of land, which caused a loss of over Rs151 million. At first the authorities concerned did not reply to the auditor’s queries, and later an irrelevant reply was provided. Finally, the authorities informed the audit that re-classification of land was under process. The audit, however, said that use of A-2 and B-4 land for commercial use without its re-classification was irregular and also needed to be regularised.

Peshawar hotel: More than 3.912 kanals of land in the Peshawar Cantonment, costing approximately Rs17.99 million, was encroached upon by a five-star hotel. When the audit raised an objection, the authorities said that the Peshawar Station Headquarters had been informed to take action. The audit did not find the reply convincing. Later, it was informed that a case for regularisation of unauthorised construction and allotment of encroached land by the hotel was under process. No further proof of progress was provided to the audit.

Multan Cantonment Board: Over 170 residential properties were being commercially used as shops and the Multan Cantonment Board had not regularised the land use change, which otherwise would earn over Rs217 million for the board.

Rawalpindi Cantonment Board: The Rawalpindi Cantonment Board had not regularised the residential properties that were being used for commercial purposes and had lost approximately Rs13 million that it could have earned as composition and other charges.

Procurement: The director general procurement (Army) spent more than Rs35 million extra to purchase daal channa and gram whole through local purchase instead of at the risk and expense of defaulting contractors. He also incurred extra expenditure of over Rs35 million due to delay in finalisation of contracts to purchase daal channa and gram whole.

TV licence: The GE (DP) Maintenance Taxila had paid television licence fees – Rs25 per electricity meter per month – totalling over Rs1.2 million that should have been charged from the occupants of 2,065 residential units under its jurisdiction. The amount was not recovered, as the auditee said that no account number of budget code was available, so no recovery was made.

Irregular payment: Many junior commissioned officers and members of other ranks working at the Heavy Industries Taxila factory, who according to the Military Accountant General were not entitled, were paid special allowances of 20 per cent irregularly. The total irregular payment came to around Rs31 million.

Free electricity: The Garrison Engineer Chaklala had paid over Rs15 million for the electricity being provided to the Air Force Officers’ Housing Colony, which was like any other private housing scheme, since 1977. The loss for just three years – July 2003 to June 2006 – came to over Rs15 million. The total losses over 32 years were yet to be calculated. While the audit wanted immediate disconnection and lump-sum recovery, the Chaklala authorities, according to the audit, were continuing their practice.

Guest houses: Over Rs2.69 million was paid on account of electricity bills for the VIP guest house at Chaklala and the rest house at Kalar Kahar between 2003 and 2005. The audit directed that total expenses – before 2003 and after 2005 – be worked out.

Swimming pool: Over Rs2.9 million was spent on a moveable roof for a swimming pool in Islamabad, which was not covered under the rules and the audit directed that the expenditure be regularised through ex-post facto sanction in relaxation of normal rules.

Welfare projects: Over Rs15 million remained outstanding in Karachi against welfare projects that were being run on commercial lines, an officers’ mess and the Manora Cantonment Board.

Sialkot and Sargodha Cantonments: The accounts for various contracts in the Sialkot Cantonment involving over Rs17 million were not finalised, owing to which the audit could not be carried out. Similarly, a contract involving Rs1.8 million in the Sargodha Cantonment was finalised without scrutiny and the payment was made without pre-audit.

Free arms: Ammunition valuing over Rs33 million from the Niaz Beg depot in Lahore was issued to the Pakistan Rangers (Punjab) on a gratis basis without the approval of the government during 2003-04. Similarly a sum of over Rs2.8 million remained unpaid by the IG Police (Sindh) against the purchase of arms and ammunition from the Malir Cantonment ammunition depot, which also did not get over Rs1.29 million from the Coast Guards for the ammunition purchased.

Hospitals: The five Combined Military Hospitals (CMHs) – at Lahore, Gujranwala, Jhelum, Abbotabad and Rawalpindi – had charged over Rs27.8 million from civilian non-entitled (CNE) patients but only around Rs14 million was deposited in the government treasury, while the rest was being distributed among hospital funds, doctors and staff as shares laid down by the defence ministry.

Interestingly, the hospitals were not all following the same formula, either. While four hospitals were depositing just 20 per cent of the CNE receipts to the government treasury, the Rawalpindi CMH was depositing 50 per cent. The audit pointing out that the defence ministry’s order was not in conformity with the Public Accounts Committee directive, Article 78 of the Constitution and financial regulations, and directed that the matter be clarified through the defence ministry and the auditor general, but it was not done.

Trees sold: Military Farms at Sialkot sold trees worth over Rs6.7 million, but rather than depositing the money in the government treasury, over Rs5 million was deposited in the ‘Tree Plantation Fund’, while over Rs1.67 million is wholly unaccounted for. Rather than giving a satisfactory reply, the authorities in Sialkot said that the trees were sold by HQ 15 Div, so they would respond. The audit directed that the amount be deposited in the government treasury.

Rs1.9 billion blocked: Spare parts worth over Rs1.9 billion had remained inactive for a long time – some of them given under US aid since 1958 – at the Central Mechanical Transport and Stores Depot in Golra, Rawalpindi, showing that the spares were purchased, or obtained as aid, without any genuine requirement, resulting in blockage of funds besides causing additional costs on account of storage and handling. It also suggested that the spare parts be disposed of.

Sugar purchase: The Station Supply Depot at Gujranwala purchased sugar worth over Rs5.2 million from Murzook International without getting the sanction or an NOC from the authorities.

Paint fire: Paint worth over Rs28.5 million that was kept at the Naval Stores Depot (Karachi) was destroyed in a fire, but even 18 years after the blaze, the loss had not been regularised or written off. In fact, responsibility for the loss was never fixed and the audit was also not informed about why such a huge inventory was kept and what the desired inventory level was. The Navy had also not recovered over Rs833,683 from three naval officials who had left the force illegally.

Free training: The Pakistan Air Force at Islamabad paid over Rs1.8 million for the training of 48 of its officers on rehabilitation courses at private institutions so that they could secure jobs as civilians after retirement, which was against Rule 6(d) of the Financial Regulations Volume 1, 1986 (Army & Air Force), which reads: “Government revenue shall not be utilised for the benefit of a particular person or a section of the community.”

Computer purchase: Some 660 computers were purchased for Rs11.88 million from the same supplier under three sanctions – of Rs 3.96 million each – on three dates – June 28, June 29 and June 30 – so that it could be dealt within the financial powers relating to local purchases of the chief of army staff (the COAS can authorise purchases up to Rs4 million). A consolidated cheque was issued for the three purchases, proving that the order was split to bring it within the powers of the army chief.

Illegal pension: The Pension sub office Engineering Centre at Risalpur records show that 17 junior commissioned officers and other ranks involved in fraudulent enrolment and other fraudulent activities were granted full pension benefits and were given over Rs6.9 million.

Newspapers: The Army High Altitude School at Rattu and 8 Sindh Regiment claimed Rs2,674 and Rs5,267 respectively for newspapers, but they were paid Rs427,230 and Rs427,270 respectively. The cheques were issued for credit in other bank accounts and not in their public account.

The auditor general’s report concludes that “the acceptance of suggestions remained restricted to particular instances and little effort has been made to improve the system, except for a new policy on the use of A-1 land for welfare and other projects and Canteen and Stores Department, the detailed framework for which is yet to be approved”.


Transparency indicts Pakistan at critical time
By Ansar Abbasi September 24, 2009

ISLAMABAD: In an obvious rebuke to President Asif Zardari’s efforts to seek massive aid from the world community, the global anti-corruption watchdog, the Transparency International, issued a stinging indictment on the eve of a high-profile New York meeting of the Friends of Democratic Pakistan, saying: “How can one expect from any donor to come forward to assist Pakistan from its current financial crisis, when there exist no law against corruption.”

President Zardari is to meet US President Barack Obama, British Prime Minister Gordon Brown and other world leaders at the Friends of Democratic Pakistan meeting in New York on Thursday but in its 2009 Global Corruption Report, released on Wednesday, Transparency International portrays Pakistan amongst the most corrupt nations in the world.

Releasing the annual report, the TI chief in Pakistan Adeel Gilani said anti-corruption efforts in the country had taken a 180 degree turn since Gen Pervez Musharraf issued the National Reconciliation Ordinance on October 5, 2007, 56 days after the ratification of the UN Convention against Corruption.

The timing for the release of the TI report would be embarrassing for President Zardari, whose government’s credibility is already seriously questioned internationally because of President’s own as well as many of his government’s key players’ past plagued by serious corruption charges.

Finance Minister Shaukat Tarin tried to soften the impact of the TI report by saying in his talks with US officials in New York, the US side had assured that most of the aid to Pakistan will be channelled through the federal government, although it is still not clear whether the US Congress will approve this.

A press release issued in Islamabad and New York, Syed Adeel Gilani, Chairman TI Pakistan, said the NRO has also granted further protection to the parliamentarians, as no sitting member of parliament or a provincial assembly can be arrested without taking into consideration the recommendations of the special parliamentary committees on ethics, which are not formed yet.

Gilani said over and above the NRO, the aims of the present government which has sent serious signals all over the world is that in Pakistan corruption will not be a crime if no accountability is held for three years. “The Draft Holder of Public Office Act 2009 prepared by the government to substitute the NAB Ordinance, under consideration of the National Assembly, gives further immunity to all against corruption from October 2010,” the report said, wondering, “How can one expect that any donor to come forward to assist Pakistan from its current financial crisis when there exist no law against corruption.”

The report said corruption is a serious problem in Pakistan, and this position is corroborated by a number of recent studies and reports. An assessment of Pakistan’s infrastructure implementation capacity was carried out at the request of the government, and the resulting report was published in November 2007 jointly by the World Bank and the planning Commission of Pakistan.

It states that approximately 15 per cent of the cost of corruption lies in procurement, costing the Pakistani development budget (2007/8) over Rs150 billion. Furthermore, the World Bank’s Control of Corruption Indicator in 2007 ranks Pakistan a mere 21.3 out of 100. The Global Competitiveness Report 2008-2009 ranked Pakistan 101st out of 130 countries and found that respondents pointed to corruption as the second most problematic factor for doing business in the country, after government instability.

The instability of the political situation in Pakistan cannot be underestimated as a factor in permitting corruption in the private sector to flourish. Despite Musharraf’s claim to be committed to fighting corruption, little headway has been made, and it is still considered to be ‘pervasive and deeply entrenched’.

Musharraf relinquished military power in November 2007, and his supporters were defeated in the February 2008 general election by a coalition of the Pakistan People’s Party and Nawaz Sharif’s Muslim League. Musharraf resigned in August 2008, facing impeachment for alleged crimes including gross misconduct and violation of the Constitution, it said.

The following is the Pakistan Chapter of the Global Report released on Sept 23: Legal and institutional changes: In a meeting with a delegation of TI Pakistan on 17 July 2007, the former prime minister, Shaukat Aziz, gave assurance that the Public Procurement Rules of 2004 would be implemented in all the federal government ministries. He also claimed that transparency was the ‘hallmark’ of government policy and that the government was promoting e-governance as a tool for more openness and in order to make processes more efficient. He claimed that the ëgovernment had made it mandatory that integrity pacts are signed for all government contracts over Rs10 million. Moreover, the adoption of the rules ëminimises discretion, gives priority to technical competence and ensures that award of contract is on the basis of lowest evaluated responsive bidder in the shortest possible timeí.

He also agreed with TI Pakistan that the Election Commission should ëhold the elections in the most transparent manner’. These commitments were undermined after the departure of the former prime minister in 2007. Under the caretaker government in 2008, complaints to the Public Procurement Regulatory Authority board were not acted upon.

The former president, General Pervez Musharraf, issued the National Reconciliation Ordinance (NRO) on 5 October 2007, fifty-six days after the ratification of the UN Convention against Corruption. In many ways this was a setback for anti-corruption measures in Pakistan, as all proceedings under investigation or pending in any court that had been initiated by or involved the National Accountability Bureau (NAB) prior to 12 October 1999 were withdrawn and terminated with immediate effect. The NRO also granted further protection to parliamentarians, as no sitting member of parliament or a provincial assembly can be arrested without taking into consideration the recommendations of the Special Parliamentary Committee on Ethics or the Special Committee of the Provincial Assembly on Ethics.

Public ills, private woes — the survival of the private sector during political instability: Corruption is a serious problem in Pakistan, and this position is corroborated by a number of recent studies and reports. An assessment of Pakistanís infrastructure implementation capacity was carried out at the request of the government, and the resulting report was published in November 2007 jointly by the World Bank and the Planning Commission of Pakistan. It states that approximately 15 per cent of the cost of corruption lies in procurement, costing the Pakistani development budget (2007/8) over Rs150 billion.

Furthermore, the World Bankís Control of Corruption Indicator in 2007 ranks Pakistan a mere 21.3 out of 100. In terms of the business sector, there are a number of measures that indicate that there is a serious issue of corruption. TI’s Global Corruption Barometer 2006 reported that the impact of corruption on the private sector was perceived as almost equal to corruption in the public sector; and The Global Competitiveness Report 2008ñ2009 ranked Pakistan 101st out of 130 countries and found that respondents pointed to corruption as the second most problematic factor for doing business in the country, after government instability. The instability of the political situation in Pakistan cannot be underestimated as a factor in permitting corruption in the private sector to flourish. Despite Musharrafís claim to be committed to fighting corruption, little headway has been made, and it is still considered to be ëpervasive and deeply entrenchedí.

The inauguration of the new president, Asif Ali Zardari, on 9 September 2008 ushers in a new era, but not one without challenges. The new democratically elected government will, therefore, require the immediate enforcement of good governance and transparency standards to counter the various dire problems facing Pakistan. There is an increased threat of terrorism, hyperinflation, a reduction in the Karachi Stock Exchange 100 Index, a sizeable depreciation of the currency, a substantial reduction in foreign currency reserves and a huge trade deficit inherited from the previous government.

Banking fines for cartels: the new Competition Commission: In Pakistan, monopolistic practices and cartels are perceived to hold sway in such businesses as banking, cement, sugar, automobiles, fertilisers and pharmaceuticals, to name a few. Although cartels distort market prices, they also create other anomalies. Existing players in an industry may firmly block the entry of new entrepreneurs through cartels, in order to ensure their own market dominance. This practice acts as a clear disincentive for the much-needed expansion of Pakistanís industrial base.

In October 2007 a new Competition Commission was set up under the Competition Ordinance 2007, in order to ëprovide for a legal framework to create a business environment based on healthy competition towards improving economic efficiency, developing competitiveness and protecting consumers from anti- competitive practicesí.

It was also meant to ërestrict the undue concentration of economic power, growth of unreasonable monopoly power and unreasonably restrictive trade practicesí, which are perceived to be ëinjurious to the economic well-being, growth and development of Pakistaní. In one of its first initiatives, the Competition Commission challenged the Pakistan Banks Association (PBA) on its decision to ëcollectively decide rates of profit and other terms and conditions regarding deposit accountsí. The PBA is a membership association to which only banks in Pakistan can be affiliated, and it advertised its decision openly in a daily newspaper on 5 November 2007. The terms of the agreement included a number of its member banks imposing ëa four per cent profit on Rs20,000 deposits and a Rs50 charge on less than a Rs5,000 balanceí on bank accounts included in the new Enhanced Savings Account (ESA) scheme. Furthermore, holders of basic accounts that met the criteria would have their accounts changed to ESAs without the prior instruction or agreement of the account-holders.

The Competition Commission considered this move by the PBA to be in violation of section 4 of the Competition Ordinance 2007, and, moreover, in acting as a cartel, the banks were alleged to have behaved anti-competitively. The implications of the changes included customers with balances of less than Rs5,000 having to pay Rs50 each month and the transfer of accounts without the account-holdersí prior permission.

On 24 December a ëshow-causeí was issued to the PBA and the banks, and they were asked to provide justification of their behaviour to the commission by 10 January 2008.

Both the PBA and the banks issued responses on 9 January, denying the charges of cartelisation, and on 28 February 2008 a further statement was issued, arguing that the commission did not have jurisdiction in this area and that, furthermore, the changes had been made ëat the behest of the regulator (the State Bank of Pakistan) in the larger public interestí. The PBA also argued that it could not be considered to be stifling competition as the deposit amounts affected by the ESA scheme amounted to only 2.25 per cent. The commission found later, however, that in terms of the number of account-holders affected the impact was much higher, constituting 45.12 per cent.

The final decision of the Competition Commission was made on 10 April 2008. The commission argued that the ëPBA has acted beyond its mandate...and has been instrumental in the formation of a cartelí. As a result, it had deprived small account-holders of the benefits they were otherwise earning on their savings accounts. The PBA and the culpable banks were ordered to discontinue the practice, not to repeat it and to pay considerable fines. The PBA was fined Rs30 million, and the seven banks involved were fined Rs25 million each.

The penalised institutions did have recourse to appeal to the appellate bench of the Competition Commission, but they failed to do so within the stipulated time. On 27 May the PBA did, however, appeal against the decision of the commission with the Sindh High Court, which ordered the commission not to take any action against the PBA before the decision had been adjudicated in court.

The commission appealed against the high courtís decision, and on 15 September 2008 the Supreme Court allowed the commission to proceed against the banks. The Competition Commissionís move against the banking cartel, as well as the support provided by the Supreme Court, is encouraging. It has sent the message that such practices by the private sector, including the maintenance of unreasonable power by monopolies and restrictive trade practices, will not be tolerated and that the institutions in charge of monitoring such practices have the power to act.

Privatisation of Pakistan Steel Mills: Corruption in privatisation in Pakistan is endemic: manipulation of the process can be found at all stages, from the evaluation of profits and assets of a company to the provision of kickbacks on completion of a settlement.

One of the most famous cases relating to privatisation involves the attempted privatisation of Pakistan Steel Mills. As Pakistanís largest and only integrated steel manufacturing plant, it is a private limited company, and 100 per cent of its equity is owned by the government. The plant is the biggest producer of steel in Pakistan and was installed in 1981, with the collaboration of Russia, by the Ministry of Industries, Production and Special Initiatives. In 1997 the government of Pakistan decided to privatise it, and, following the rules, secured approval from the Council of Common Interests.

In 1998 the privatisation of Pakistan Steel Mills was abandoned, and to make it profitable the labour force was reduced from 20,000 to 15,000.

As the steel mill had been designed, constructed and fitted out entirely by the Soviet Union, in February 2003 General Musharraf visited Moscow and signed an agreement to expand the production of the plantís steel from 1.1 million to 1.5 million tonnes. By December 2004, less than two years later, the privatisation of the plant was being discussed again, and by 10 February 2005 the decision to privatise the mill was taken by the government. The corporation, assessed at Rs72 billion, was sold to a consortium for Rs21.58 billion on 24 April 2006.

On 23 June 2006, the Supreme Court ruled against the privatisation, and Chief Justice Chaudhry prevented the sale of the state monopoly to the private investors.

The Supreme Court concluded that approving the award of the contract reflected disregard for the mandatory rules, as well as the information necessary for arriving at a fair sale price. The unexplained haste of the proceedings also cast reasonable doubt on the ethics of the whole exercise. While Chief Justice Chaudhry acknowledged that it was not the function of the court to interfere with the policy-making of the executive, the privatisation of the mills was ëvitiated by acts of omissioní and violated the mandatory provisions of laws and rules. The valuation of the project and the final terms offered to the consortium were not in accord with the initial public offering given through the advertisement.

This case had implications that still resonate today, as it is considered one of the causes of the dismissal of Chief Justice Chaudhry in March 2007, who was not reinstated until July 2008.

It is, therefore, partially responsible for a great civil society movement in Pakistan, which called for the restoration of an independent judiciary. There are also unanswered questions that still need resolution. In October 2006 a case was filed against the then prime minister, Shaukat Aziz, and ten other ministers, as well as the governor of the State Bank of Pakistan, alleging misuse of power ñ corruption as defined in section 9 of the National Accountability Bureau Ordinance 1999, which covers corruption and corrupt practices.

If found guilty, they would be subject to punishment, up to fourteen yearsí imprisonment, under section 10 of the ordinance for their involvement in the attempted privatisation of Pakistan Steel Mills. At the time of writing this report it was yet to be seen how the NAB, under the jurisdiction of the current government, will proceed with this case.



'Irregularities' in EOBI: TIP seeks copies of all past 3 years contracts
Business Recorder September 19, 2009

KARACHI: The Employees' Old-Age Benefits Institution (EOBI) is under close scrutiny following charges of corruption in the award of contracts and illegal consultancy by its wholly owned subsidiary Primaco.

Transparency International Pakistan (TIP), fearing loss of millions of rupees at stake, has requested Muhammad Asadullah Sheikh, Chairman of EOBI for copies of all contracts awarded by EOBI and its subsidiary Primaco during last three years. This is mandatory under the provisions of Rule 47, public access and transparency, which states: "as soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of contract public."

In the letter sent on August 29 by Syed Adil Gilani, Chairman of TIP, and Public Procurement Regulatory Authority (PPRA) reference has been made to the irregularities in the award of contracts in EOBI and illegal awards of consultancy contracts by its wholly owned subsidiary Primaco, "which were not based on the lowest cost basis, but on the technical weightage, at very high costs, against the provision of Public Procurement Rules 2004".

PPRA also requested the Chairman of EOBI that a comprehensive report and comments on the contents of TIP's complaint may be sent to PPRA. The information was solicited by PPRA under the powers vested in the Authority under section 5(2)(i) of PPRA Ordinance 2002.

Earlier, in his letter sent on August 5, to the Chairman of EOBI, Adil Gilani had referred to the stories published in newspapers relating to EOBI's move to buy a tower in the heart of Islamabad. It would be a Rs 6 billion purchase, if materialised. And, negotiations by EOBI for the acquisition of a shady five-star project in Islamabad, currently owned by a known business group of the Punjab. The EOBI has a huge management fund of Rs 160 billion.

He had highlighted that PPR 2004 have eliminated all discretions in procurement process and made corruption low profit and high risk business. He has also pointed out that since Primaco is a wholly owned subsidiary of EOBI, all procurement made by Primaco shall also be processed according to PPR 2004. TIP has received complaints that appointment of consultants by Primaco were not processed as per PPR, according to which all contracts are to be awarded to lowest evaluated responsive bidder, whereas EOBI and Primaco are using wrong process of quality-cum-cost based selection method, which is gross violation of PPR 2004.

Responding to PPRA's letter, EOBI had sent a detailed reply mentioning that in November 2008 it had received an offer to invest in the Corporate Office Tower, one of the four highrise towers of the project named 'Centaurus', Islamabad. After threadbare evaluation of the terms and conditions of the offer by Primaco, it was found as 'Not feasible', and EOBI's decision not to invest in the project was conveyed to the representatives of the project sponsors.

Regarding the acquisition of a stalled five-star hotel in Islamabad, the EOBI informed that the due diligence report, to be submitted by the consortium of consultants, shall form the basis of decision regarding future course of action on the proposal for investment in the Intercontinental hotel project.

PPRA has been informed by EOBI that Primaco had enforced a procurement policy and standard operating procedures in March 2007 which stipulates to adopt procurement procedures and rules as notified by PPRA and Pakistan Engineering Council (PEC).

All real estate investment projects of EOBI are evaluated against strict market-driven criteria. Assistance of third-party professional firms is obtained to avoid any conflict of interest. Decisions are made by the Board of Trustees of EOBI, which is a tripartite body, consisting of representatives of federal government, all provincial governments, representatives of employers from all provinces and representatives of employees of all provinces. Proposals finalised by the team of professionals are scrutinised by the Board of Trustees (BOT) and their fate is decided upon merit, the EOBI said.


Extension contract with Abacus PPRA asks PIA for detailed report
Business Recorder September 18, 2009

ISLAMABAD (September 18 2009): Public Procurement Regulatory Authority (PPRA) has sought a detailed report from Pakistan International Airlines (PIA) over the alleged illegal extension of contract for further 10-15 years to Abacus Distribution Systems Pakistan (private) Limited on negotiation basis, official sources told Business Recorder on Thursday.

Naeem Ahmad, a Deputy Director in the PPRA, has written a letter to PIA Managing Director Captain Muhammad Ejaz Haroon, who has also communicated a complaint from the Transparency International Pakistan (TIP) on extension of contract illegally. The TIP also urged PIA not to extend contract with Abacus Distribution Systems Pakistan (Private) Limited for 10-15 years on negotiation basis.

"A comprehensive report and comments on the contents of the complaint should be sent to PPRA at the earliest. This information is being called under the power vested in this authority under section 5(2)(i) of Public Procurement Regulatory Ordinance, 2002," Ahmed said in the letter.

The deal was reported by PIA in the press media in 2004 under which a company called Abacus Distribution Systems Pakistan was created which would be 90 percent owned by PIA within nine years, by which time the airline would have invested 50 million dollars in the company.

" How this BoT agreement was executed without processing the tenders of M/s Amadeus, M/s Galileo and M/s Worldspan - in 2004, according to the procedures prescribed under PPRA Rules, and the one sided contract conditions in favour of Abacus International Pte Ltd which does not even include " Integrity Pact", which are in violation of a number of rules prescribed under Public Procurement Rules 2004, mandatory since June 8, 2004," says the annexure of the letter sent to the Managing Director of PIA.


TIP urges PIA to extend Abacus contract up to 15 years
Business Recorder September 17, 2009

ISLAMABAD (September 17 2009): The Transparency International Pakistan (TIP) has urged Pakistan International Airlines (PIA) to extend contract with Abacus Distribution Systems Pakistan (Private) Limited for 10-15 years on negotiation basis.

In a letter to PIA Managing Director Captain Ijaz Haroon, the TIP said that it had received a complaint that PIA was processing extension of the BoT contract of Abacus Distribution Systems Pakistan (Private) Limited, executed on August 24, 2004 with Abacus International Pte Ltd, Singapore, disregarding rules for a period of about 15 years.

The deal was reported by PIA in the media in 2004 under which a company called Abacus Distribution Systems Pakistan was created, which would be 90 percent owned by PIA within nine years, by which time the airline would have invested 50 million dollars in the company.

The complaint revealed that the initial agreement was for a three- year period for PIA to be exclusively available on Abacus, after which PIA would make itself available on all reservation systems, however, this contract was later extended for an additional term of four years by the then Senior Vice-President, Sales, S. Kamran Hasan.

There was no meeting held if this extension would be in favour of PIA or may result in losses. The feasibility for extension of the agreement was never made. The end result was that the PIA incurred a loss and is still incurring major losses at the hands of Abacus.

The TI Pakistan further stated that it would like to have the clarification from the PIA on how this BoT agreement was executed without processing the tenders of M/s Amadeus, M/s Galileo and M/s Worldspan in 2004, according to the procedures prescribed under the PPRA Rules, and the one-sided contract conditions in favour of Abacus International Pte Ltd, which does not even include " Integrity Pact", which are in violation of a number of rules prescribed under Public Procurement Rules 2004, mandatory since June 8, 2004.

Had the tenders been invited according to the procedures prescribed by the PPRA, any of the four largest GDS companies, ie Amadeus, Galileo, Sabre, Worldspan, would have competed seriously, The TIP argued.

Complaint also says Abacus system uses Sabre as a host as they, till now, have not been able to create their own host, with a presence in just a few Far Eastern countries and do not even cover the entire Far Eastern region. The carriers that own major shares in the system themselves are available on all world-wide systems to have their seats accessible freely.

Abacus - a GDS with limited presence- has a history of failed projects, rolling back from airlines and shutting down distribution in countries. It was chosen as the exclusive distributor for the PIA. The allegation made is that the launch of Abacus Distribution Systems Pakistan with a 90 percent ownership of PIA might have seemed highly lucrative, however, the PIA in this event suffered two major losses.

Going exclusively with one GDS, the PIA has massively lost due to the unavailability on major GDS, in addition to not being able to be available on the Top Online Travel sites like Expedia, Orbitz, Travelocity, cheap tickets etc. According to the TIP, it is surprising that when trying to book through the online world leading websites, the option of booking PIA is not available as the PIA has bound itself exclusively to one particular system. The business and the reputation loss cannot be quantified, however, it is definitely substantial.

Saudia and Emirates follow the project of venturing for a GDS division, however, both carriers have not let this affect their prime functionality, ie transportation of passengers. These airlines have made themselves available in all possible locations so that they are accessible to all and sales can be maximised.

The model created by PIA, is extremely unique, which has resulted in PIA's booking factor going low due to its inaccessibility, thereby losses to PIA as an airline. The complaint reveals that against the projected profit in last five years, the JV Company has suffered losses, and PIA has not taken any measures to question M/s Abacus International Pte Ltd, Singapore.

Under the agreement, 100 percent management control remains with M/s Abacus International Pte Ltd, Singapore. It is to be further reported that PIA, due to the exclusive deal of sales through Abacus, incurred major losses in the Asian market, including in India and Far Eastern routes, as the market share of Abacus in these regions was very low. This resulted in low booked factor on PIA and suspension of flights due low payload, the TIP added.

It has also been reported that Abacus has violated terms of selling only PIA tickets instead Abacus has encouraged exclusive PIA locations to sell other airlines and even provides incentive at the cost of PIA business. The PIA management is overlooking these actions of Abacus and compromising of PIA interests, in return for personal gains.

Abacus is also reported to have breached the Agreement Clause 3.1.5a, "The Company shall not favour or discriminate among potential and existing subscribers on the basis of airlines patronage".

In spite of the poor performance of the Abacus, and their bad international reputation, their failure in Sri Lanka, India and Bangladesh where the project was rolled back by the airlines, which then made them accessible to all computer reservation systems, but PIA continues to engage Abacus.

And in spite of the loss in the fraud case filed by Worldspan where Worldspan were awarded 40 million dollars in damages, which were paid by Abacus, PIA is reported to be processing amendment in the agreement to further extend, with modified terms, for 15-16 years, the TIP further added.

The TI Pakistan, in its letter, stated that it would like to again inform PIA that under the pretext of prequalification, or proprietorship excuses, PIA is not allowed under Public Procurement Rules 2004 to award any contract by even public tendering for such a long periods, and the BoT contracts are to be dealt strictly under the terms of the agreement, and in case PIA is suffering continuous loss, remedial measures are mandatory on PIA to be taken against the JV partners under the prudent business practices and agreement terms. "We request the PIA Chairman to kindly examine the issues pointed out in the letter and confirm whether the allegations made by complainant are true or false," the letter concludes.


TIP clarification
Business Recorder September 14, 2009

KARACHI (September 14 2009): TIP has issued following clarification: Transparency International Pakistan has only quoted from the press reports. In order to obtain authenticated documents from public bodies, TIP has been writing to PPIB, NEPRA and WAPDA to provide the Evaluation reports and Contract Agreement to TI Pakistan.

In this regard, we invite every one to visit TI Pakistan website www.transparency.org.pk, where all correspondence with Privatisation Commission, PPIB, NEPRA WAPDA is made available for transparency purposes. On this website we have also posted all correspondence held with Pakistan Power Resources (PPR).

Monitoring implementation of law is one of the basic objective of Transparency International Pakistan. To achieve our objective, TI Pakistan has even gone to court, and the latest example is Court orders of Implementation of Karachi Building Control Authority Rules for Builder and developers as public is being harassed by builders and not giving the due rights of unit buyers.

A Constitutional Petition No D-1559 of 2009 was filed on 27 July 2007, and Sindh High Court (SHC) has ordered Karachi Building Control Authority (KBCA) to post all documents relating to building/development Projects on its website within one week. TI and its National Chapters have engaged in a wide range of advocacy activities across regions to contribute to the negotiation and adoption of several anti-corruption conventions.

They also promote signature, ratification, implementation into law, and translation into policy and practice of anti-corruption conventions in their respective countries. These activities have included letters to and meetings with government officials, press releases and press conferences, letters to the editor and newspaper articles, public release of surveys and reports, radio and television broadcasts, and public workshops.

All information which were discussed with the staff reporter are based on reported news in the print media. Like on 14th August Dawn published a report "The tariffs of rental power plants and of IPPs are almost equal,' he said, adding that whereas the projects of independent power producers took five years to get going, rental plants became operational within eight months.

In case of KESC news non payment of Rs 7 billion dues of Gul Ahmed and Tapal IPP, the press is reporting this again and again, and TI Pakistan has also written to KESC and SECP on this and other issues of KESC. Even SECP has taken action and issued notice to KESC, and informed TIP, vide their letter No EMD/233/401/02-33 dated 5 August 2009.

Walter Power Plant: the contract agreement states that the electricity will be for supply to KESC. How the contract agreement can have a clause regarding KESC as the user, without any commitment from KESC. The clarification given by PPR does not deny the provision of mobilisation advance, severance guarantee, the total tariff being 15.99 cents, with Rent as 4.27 cents, and fuel cost at 12. 66 cents, at RFO @ Rs 26,000 per ton. At current cost of RFO @ Rs 49,000 per ton, and $ at Rs 83, the selling cost comes tom Rs 23. 34.

It may fluctuate lower in case of rupee appreciation and reduction in RFO prices, and vice versa will be higher in case of rupee depreciation and increase in RFO prices. According to Public procurement Rules 2004, every Contract of over Rs 10 million, shall include no bribery pact: Integrity Pact". This contract document is reportedly does not have signed Integrity pact, which is a commitment by contractor that in case any corruption is found in future, contractor will pay 10 times the amount of corruption. The actual commitment is;

Notwithstanding any rights and remedies exercised by GoP in this regard, [name of Supplier] agrees to indemnify GoP for any loss or damage incurred by it on account of its corrupt business practices and further pay compensation to GoP in an amount equivalent to ten time the sum of any commission, gratification, bribe, finder's fee or kickback given by [name of Supplier] as aforesaid for the purpose of obtaining or inducing the procurement of any contract, right, interest, privilege or other obligation or benefit in whatsoever form from GoP.

According to Public Procurement Rules 2004, Evaluation Reports are to be given to the bidders 10 days before award of Contract, and after the Award the Evaluation Report and Contract Agreement are to be made public, and for this purpose PPRA has notified that they shall be posted on PPRA website. TI Pakistan has not found them on PPRA website. Another rule No 50. states that any unauthorised breach of these rules shall amount to mis-procurement.

For this reason TI Pakistan has replied to PPRA to abide by all the procedures and also convince their client to abide by the Public Procurement Rules 2004 and supply the documents to TI Pakistan. Public Procurement t Regulatory Authority has also written in this respect to WAPDA on 30 July 2009 to furnish the documents to PPRA for examination and also to be posted on their website. In order to eliminate corruption, the World Bank has also acclaimed TI Pakistan standing and expertise, and made TIP as observer in the SODA WSIP II Project, costing US $176 million, to make sure that all tenders are processed and awarded as per procurement rules, and report to World Bank its observations on each and every procurement. Even the Prime Minster and many procuring agencies have sought TI Pakistan rulings in tender evaluation and in one case TI Pakistan ruled that a Project worth US $3.5 Billion was not processed according to rules, and the tender which was provisionally awarded, was terminated on TIP's recommendations. The Three years rental sliding downward rates are also quoted from NEPRA documents. TIP confirmed whatever they have stated is based on facts and rules of PPRA.-PR


TIP's claims fraudulent, violating its own charter: PPR
Business Recorder September 14, 2009

ISLAMABAD (September 14 2009): Pakistan Power Resources (PPR) has strongly objected to the claims made by Transparency International Pakistan's (TIP) Syed Adil Gilani in an interview withBusiness Recorder and which were reproduced in the story, 'Claim that RPPs charges only slightly higher a myth: TIP' published on September 13. PPR has also accused TIP of violating its own charter.

"PPR approached TIP of its own volition volunteering information on the rental model in general and our projects in particular," states PPR in response to the story. "TIP, while appreciating our initiative, has repeatedly refused our offers. PPR has also supported TIP's requests to the relevant governmental organisations for information on RPPs." PPR states that TIP's claims do not comport with reality. "The expertness that is being feigned on the subject is nothing beyond highly irresponsible, ill-conceived and defamatory fiction. We are forced to respond to such wilful disinformation in the interest of setting right the public record."

PPR states: "Mr Gilani surprisingly claims that 'KESC has contracted' a five-year project with Walters Power International (WPI) 'with bank guarantee or LC' for the '202MW' Korangi Power Project which would sell electricity at 'Rs 23.34 to KESC'. He has further claimed that this is at a 'higher cost than IPPs' and that KESC is 'not paying cost of two IPPs, Gul Ahmed and Tapal, arrears of Rs 7 billion which has forced them to close down.' Mr Gilani then concludes that 'this is an illegal contract'. "These are unfortunate, wilful misrepresentations. WPI, which has a common shareholder with PPR, is setting up the 205MW Korangi Power Project. Mr Gilani has been informed through our letter of August 29 and is well aware that neither WPI nor PPR has no-repeat no-contract of any nature whatsoever with KESC. Furthermore, to date, no mobilisation advance or bank guarantee or sovereign guarantee has been extended to the project.

The signed, fixed tariff for the project is US cents 4.27 per unit not including the fuel cost. Mr Gilani would be well advised to verify his facts and to direct his concerns regarding KESC to that particular organisation.

"Mr Gilani further claims that the cost of power from RPPs being 'slightly higher' than the cost of power from IPPs is 'only a myth and wrongly advertised by the RPP companies in press and also quoted by ministers'. It is surprising that Mr Gilani can make his claims with such certitude when he himself has repeatedly bemoaned the non-responsiveness of the Government to his requests for documentation on RPPs and also repeatedly refused our offers to provide him with the information that we have available.

"Mr Gilani further claims as 'controversial' an RPP contract signed in '2007' for a '135MW project at Sheikhupura with Iqbal Z. Ahmed of Pakistan Power Resources, based on gas fuel for three years'. He further claims that the 'tendering process was not known; no advance payment was made, and the time of commencement of the project was 120 days'. "PPR wholly rejects this claim as spurious and mala fide. PPR's 136MW Power Plant and GE's 150MW Power Plant are the only two RPPs currently operating in Pakistan. Both RPPs are in District Sheikhupura, commenced production in late 2007, and were awarded through an internationally competitive bidding process. PPR was provided 7 percent mobilisation advance and a confirmed standby letter of credit, in accordance with its contract for the same.

"Mr Gilani's 'recollection' that WapdaA signed 'three agreements for rental power between 2006 and 2007 with Northern Power Generating Company' for a period of 'three years only' and that 'no advance payment was made under the agreements' is flawed. His claim that the 'fixed rental charges per kWh in those agreements were in descending order every year, ie, Rs 3.09 in first year, Rs 2.36 in the second year and Rs 2.35 in the third year' is completely inaccurate. Again, given his self-confessed lack of information on the subject, such claims are not only highly suspect but also entirely incorrect.

"The tariff for PPR's 136MW Bhikhi Power Plant is fixed at US cents 3.13 per unit. Furthermore, the actual cost of power per unit from this RPP to Wapda for the period December 2007 to December 2008 has been Rs 5.86. Of this, PPR has received Rs 2.48 per unit while Rs 3.37 is the fuel cost accruing to Sui Northern Gas Pipelines Company Limited (SNGPL). This is based on audited information which Mr Gilani would do well to independently verify.

"Mr Gilani also claims that 'very old plants' shall be employed as RPPs. Mr Gilani is well aware that all furnace oil based RPPs are contractually obligated to ensure an availability of between 85-88 percent while all gas-based RPPs are contractually obligated to ensure an availability of 90-92 percent. In case RPPs fall short of these mandatory availability requirements, they are subject to stiff financial penalties. However, Mr Gilani concedes that TIP's 'concern' is to review any 'post-tendering relaxations'. We understand that the Public Procurement Regulatory Authority (PPRA) is looking into this concern as is the Asian Development Bank (ADB). We unreservedly support this effort. In the meanwhile, Mr Gilani would be well advised to refrain from making claims that cannot be defended in a court of law.

"Mr Gilani also cites Julia M. Fraser's May 2005 report, 'Lessons from the independent private power experience in Pakistan,' for the Energy and Mining Board of The World Bank Group to draw the dyslexic lesson, as per his letter to PPR dated August 27, that 12 IPPs 'voluntarily reduced their tariff when corruption inquiry was conducted'. What Mr Gilani fails to mention is that the same report quotes the then US Secretary of Energy as describing the 1994 Power Policy as 'the best energy policy in the whole world' and then describes the tactics adopted by the succeeding government to negate this acclamation.

"The report states that 'excessive coercion, harassment and heavy-handed legal and other actions initiated by the [succeeding] Government to renegotiate tariffs or cancel contracts contributed to Pakistan's fall from grace in the eyes of the international private sector community'.

The report states that 'coercive tactics (eg arresting/interrogation of IPP company officers and sometimes family members) and threats of project cancellation were being used in attempts to obtain tariff reductions'. The report states that this strategy was 'unsuccessful'. Referring to cases of marginal tariff reductions, the report makes clear: 'In exchange for these tariff concessions, the term of their power purchase agreements was extended from around 20 years to 30 years'.

"In its letter dated September 3, PPR informed TIP: 'You are aware that we have through our letters of August 3, 17 and 29 repeatedly offered to provide you with documentation on rental power in general and our rental power projects in particular. We have done this of our own volition in order to introduce reason and responsibility into the discussion on rental power and to facilitate your work. You have through your letters of August 7, 27 and 30 repeatedly refused our offer. This is your prerogative. You continue to state that the Government is non-responsiveness to your requests. We have made requests on your behalf to the Government. Whether or not the Government provides this information to you, it is their prerogative. We shall now no longer be responding to any of your letters or queries.'

"PPR is a responsible corporate citizen. PPR believes that the sustainability of any project is only possible if the process of its award and implementation is transparent and unimpeachable. PPR also believes that Mr Gilani's statements are in violation of the Statement of Vision, Values and Guiding Principles issued by Transparency International's global office in Berlin. PPR shall not simply ignore personalized, baseless, and defamatory attacks against it, its officers or shareholders. PPR shall jealously guard the goodwill it has earned by setting up power projects in the shortest possible time to ensure the availability of affordable electricity for Pakistan."


US assistance for Pakistan's energy sector
Business Recorder September 13, 2009

EDITORIAL (September 13 2009): The United States Agency for International Development (USAID) Mission Director Robert Wilson has stated that under its Energy Efficiency and Capacity Building programme around 1500 MW of Pakistan's energy shortfall, the country's Achilles Heel, will be met within the next three years. To achieve this objective Wilson did not announce any additional financial support from the US, over and above the 1.5 billion dollars per annum for the next five years expected after the passage of the Kerry-Lugar bill.

Thus, those government circles who were expecting an addition to the already announced annual US package, specifically for our deficient energy sector, a perception that may have been inadvertently generated during Special US Representative for Afghanistan-Pakistan Richard Holbrooke's visit to this country in the middle of August, would be disappointed.

'We are going to now start working closely with your (Pakistani) government to come up with ways to assist you in strengthening the energy sector,' Holbrooke had promised in a press conference. According to statistics released recently by Raja Parvez Ashraf, the Minister for Water and Power, Pakistan is suffering a daily deficit of between 3500 and 4000 MW today.

Rental power projects of 2250 MW for a period of five years are expected to be installed by end December, with delays expected not to go beyond the current fiscal year, as a short-term policy measure. Medium to long-term projects that include enhancing the generating capacity, all require heavy investments for which the present government simply does not have the resources. But enhancing generating capacity was not mentioned by Wilson.

According to him 1500 MW would be generated through conducting an audit of energy firms, facilitating a shift to energy-efficient equipment, improving building codes and launching public information campaigns. The thrust of this US approach may well strengthen the general public perception that there is adequate generation capacity within Pakistan. However, the efficiency of the distribution and transmission systems leaves a lot to be desired.

Not mentioned by the USAID Director, though certainly implicit, was the large circular debt considered to be the prime reason for the sharp decline in the generating capacity in the country today. This was not considered necessary by Wilson as the elimination of this debt would remain the government's responsibility, as per the commitment it made with the International Monetary Fund (IMF) under its 7.6 billion dollars stand-by arrangement.

Another factor contributing to the current crisis in the energy sector is the inability of the Discos to collect dues from its consumers. Several government departments are notorious for not paying electricity bills, and disconnection is not an option for the supplier in their case. There is also a need to revisit the tariff structure, as in most other countries of the world, bulk users get a more favourable rate.

However, under the guise of lifeline consumers there are many who cheat the system by using multiple connections, a situation that the USAID Director was well aware of which led him to identify improving building codes as a means of enhancing energy within the existing system. Cross subsidisation too is an issue and the government would do well to provide subsidies to lifeline consumers, not from other consumers but from the budget.


Claim that RPPs charges only slightly higher a myth: TIP
Business Recorder September 13, 2009

KARACHI (September 13 2009): The claim that the charges of rental power plants (RPPs) are only slightly higher than independent power producers (IPPs) is only a myth and wrongly advertised by the RPP companies in press and also quoted by ministers, according to Transparency International Pakistan (TIP).

For example, TIP said, Lakhra Power Generation Company, which has been awarded contract for supply of 202 MW to KESC from its plant established at Korangi, would sell one kwh electricity at Rs 23.34 to KESC as against its current tariff of Rs 8 per kwh being charged from consumers.

Syed Adil Gilani, Chairman of Transparency International Pakistan told Business Recorder that "this is an illegal contract", awarded on modified conditions which did not meet the conditions specified in the tender documents. "This is not allowed under Public Procurement Regulatory Authority (PPRA) rules". It may be mentioned that the Chief Justice of Pakistan had cancelled the Pakistan Steel Mills contract on the same grounds in 2007.

The TIP Chairman, in a letter to Pakistan Power Resources (PPR) on rental power, recalled that more than 12 IPPs had voluntarily reduced their tariff when corruption inquiry was conducted. He quoted the World Bank report on 19902 IPP projects, which indirectly confirmed that the IPPs were not acquired according to the prudent practices.

The report said as under: "several important lessons can be drawn from the Pakistan experience. Setting a bulk tariff ceiling allowed Pakistan to alleviate its power shortage through power generation in record time; however, too much power was contracted with little regard for least cost expansion.

The scale of private investment in generation should be aligned with the country's state of development with respect to selector reforms and also social, economic, political and institutional governance. In addition, solicitation of IPPs should be on a competitive basis and staggered over a few years so that changes in international investors' assessment of country and contract risks could lead to declining bid prices.

Staggering IPP solicitation and scaling down large IPP capacity would also allow the utility to re-assess demand/supply conditions and adjust the contracted capacity and completion timing for subsequent IPPs accordingly."

It is being said by many experts that these recommendations are not adhered to by the Government of Pakistan for the present procurement of RPPs, and that IPPs should first be operated fully before considering the requirement of RPPs.

Like KESC has contracted in December 2008, a five year RPP contract with Walters Power International with bank guarantee or LC for five year rental, at higher cost than IPPs, and not paying cost of two IPPs, Gul Ahmed and Tapal, arrears of Rs 7 billion which has forced them to close down.

"It is prudent electricity generation and distribution business practice to ignore cheap electricity and buy costly electricity? SECP has issued notice to KESC for these acts," Adil said in his letter. The TIP Chairman recalled that Wapda had signed three agreements for rental power between 2006 and 2007 with Northern Power Generating Company.

These were for three years only, and no advance payment was made under the agreements. The fixed rental charges per kwh in those agreements were in descending order every year ie Rs 3.09 in first year, Rs 2.36 in the second year and Rs 2.35 in the third year. The net production was 88 percent, guaranteed for three years. Neither three-year LC was required nor WHT was exempted for the first year. Under force majeure it is not known whether fixed rental was to be paid to the seller or not. The time of commencement of the project was 120 days. Among the controversial tenders and contracts the TIP Chairman mentioned the following: In 2007 RPP was signed for 135 MW project at Shaikhapora with Iqbal Z.Ahmed of Pakistan Power Resources, based on gas fuel for three years. The tendering process was not known; no advance payment was made, and the time of commencement of the project was 120 days.

In 2008, two more RPP agreements were made, where the advance payment of 7 percent was provided in the agreement, but the duration of agreement was extended to five years with 88 percent net production for old RPP and 93 percent for new RPP. Similarly, five years LC was required and WHT was not exempted for first year.

Under force majeure conditions, fixed rental was to be paid to the seller. Time of commencement of the project is not known. It is stated to be based on competitive bidding by the Private Power Infrastructure Board (PPIB). The RPP contractors are Walters Power International and Karkey of Turkey and the time of commencement was eight months.

TIP's concern is why 7 percent advance payment, increase in contract terms from three to five years, and fixed rental to be paid even in force majeure conditions have been agreed in the contract.

If these conditions were included in the tender documents then who allowed the change from previous contract agreement made in 2006 and 2007. If these were not included in the tender documents, then the contract agreement under Public Procurement Rules 2004 are to be declared as misprocurement, according to TIP.

The PPIB had invited bids through international competitive bidding (ICB) on September 26, 2008 under two packages: (a) package-I (IPP and rental power projects to be commissioned by the end of 2009); (b) package-II (IPP projects to be commissioned by the end of 2010).

Under package-I, no bid was received for IPPs, while under package-II, three bids from the following bidders were received: (a) Engro Power Generation (Pvt) Limited - 527 MW net (b) Reshma Power Generation Limited - 137.11 MW net, and (c) Saba - 154.07 MW net.

After evaluation of envelope-I (qualification and technical bids) and envelope-II (financial and tariff bids) were opened on March 11, 2009. Among the 14 RPPs, circulated to banks for financing, all proposals are subjected to compliance of tendering procedures as prescribed by PPRA.

Only the Turkish proposal Karkay Rental Power is a foreign direct investment, and is also a new plant, whereas all the rest are very old plants, and are being financed by Pakistani banks, which are already under liquidity crunch for providing loans to other Pakistani ventures.


KBCA asked to post building/development projects documents on website within week
Business Recorder September 11, 2009

KARACHI (September 11 2009): Sindh High Court (SHC) has ordered Karachi Building Control Authority (KBCA) to post all documents relating to building/development Projects on its website within one week.

According to a press release issued by Transparency International Pakistan (TIP) on Wednesday, the Sindh High Court bench comprising of Chief Justice SHC, Sarmad Jalal Usmani and Justice Sajjad Ali Shah ordered KBCA to comply with the prayer (i) as per petitioner, TIP, conceded on Wednesday by Shahid Jamil, (Advocate of KBCA), and need full to be done within one week. A notice shall also be issued to ABAD for the posting of the information on the builder/developer website and also for action on prayer (ii), to be heard on 29 September 2009.

The Trustees of Transparency International Pakistan after considering the miseries of the public and blatant violation of laws by builders took an unprecedented decision to file a constitutional petition in the Sindh High Court. The Constitutional Petition No D-1559 of 2009 was filed on July 17, 2007.

Transparency International Pakistan (TIP) has been receiving numerous complaints on the unethical business practices of many builders and land developers. The public has suffered losses of their investments/properties. The illegal acts of the builders demanding extra payments, not allowed under rules, on the pretext of inflation, which sometimes amounted to even 100 percent of the booked cost of the units.

The petition requested that the interest of the general public, while dealing in real estate development be safeguarded by the regulatory authority KBCA. The public has lost trust in such development work by the various builders who have turned the development business into a criminal activity. Some of the builders who with the support of political and criminal influences, are not following procedures prescribed for transparent dealing in real estate.

In most of the cases, when buyers are not able to pay the regular instalments, the builders impose heavy penalties, which in some cases are up to 30 percent of the original unit prices. Local as well as foreign builders are active in these fraudulent practices in Pakistan. In many cases, builders make booking for the same units in the name of multiple buyers.

The petition also quoted from the Cowasjee's article published on 31 May 2009 that 'Criminal gangs with links to key political parties are terrorising the residents of Karachi, Pakistan's largest city, according to officials and victims. The most powerful is the so-called 'land mafia', who take over commercial plots, government land and even people's homes, the officials said.

The land mafiosi, who work out of legal fronts such as building, contracting and real estate businesses, derive their strength from political parties with constituencies in Karachi and other parts of southern Sindh province such as the MQM, the PPP, the ANP and the PML-Q and PML-Functional.'

All these wrong doings, TI Pakistan said, is being committed against the Karachi Building and Town Planning Regulations, 2002 and Karachi Building and Town Planning Regulations (Amendment) 2005, which protects the buyer's as well as builder's interest. TIP prayed to the court that unfortunately these regulations have never been truly implemented due to the influences and vested interests of powerful persons.

According to these regulations every builder/developer is required to take NOC from KBCA, deposit one percent cost of Project as performance guarantee with KBCA, sign an agreement with the buyer within 15 days of booking and deposit a copy with KBCA, complete the project within the time given in NOC, which is about 3 years, in case of a delay in construction shall pay buyer liquidated damages at the current bank interest rate for the duration of delay, KBCA shall allow any escalation of cost request by them in case the project is not completed within the 3 years NOC time period, in case of delay in payment of monthly instalments by buyers he shall pay penalty equal to current bank interest rate on the amount of delayed instalments, seller has right to cancel the allotment of the unit if three instalments are not paid, but has to issue notice of cancellation of 30 days with copy to KBCA.

The Builder/Developer shall not rebook the cancelled unit within 30 days of receipt of copy of cancellation letter by the Authority, provided that Developer shall publish the cancellation notice in the weekend addition of two leading newspapers (English & Urdu) in the classified advertisement section in a bold format under the heading of cancellation of flat/unit.

The most important rule is that in case of default of instalment or buyers own choice if the booking of the unit is cancelled and agreement terminated the builder/developer shall refund the total payment made so far within 30 days, after deducting only 4 percent of the instalments paid by buyer. In order to have Transparent Implementation of KBCA Rules, TI Pakistan went to the SHC with request that all the mandatory requirements under KBCA regulations, which are to be complied by builder/developers as well as KBCA like inspection and quality control certificate during construction shall be posted on the website of KBCA as well as the website of builder/developer.

Transparency International Pakistan prayer to the Court was: 

(i). The mandatory information as prescribed in the Karachi Building and Town Planning Regulations, 2002 Regulations 5.1 and 5.2, and Floor certificate issued by KBCA under Regulation 3.2.11, to be provided to KBCA by the builders/developers, shall also be posted on the website of the project by the builder, as well as on the website of KBCA by KBCA, for public knowledge and monitoring.

(ii) The register be maintained by each builder showing the number of units/plots booked with name of every investor against such unit/plot and to display such register at a prominent place in their site office for inspection at all times so to eliminate multiple booking.

The Independence of Judiciary and results of judicial reforms announced by the chief justice Iftikhar Mohammad Chaudhry for free and expeditious Justice can be seen in this petition, which was filed on 27th July 2009, and the orders were issued on 8th September 2009, in only 43 days.-PR


Court asks KBCA to put builders’ data online
Dawn September 11, 2009

KARACHI, Sept 10: The Sindh High Court in a constitutional petition filed by the Transparency International Pakistan has directed the Karachi Building Control Authority to post all relevant information on construction projects and builders on its website within a week for public knowledge and monitoring.

The order was passed by a division bench of the high court comprising Chief Justice Sarmad Jalal Osmani and Justice Sajjad Ali Shah on the constitutional petition (D-1559-09) filed by the Transparency International Pakistan against the KBCA and the Sindh government. The petitioner, Adil Gilani of the Transparency International Pakistan, said that interests of buyers and builders were protected under the Karachi Building and Town Planning Regulations-2002 and the KB&TPR (Amendment) 2005, but they were rarely followed, with the buyer usually losing his money in the process, particularly in case of default on instalments.

Under these regulations, the developer/builder is supposed to sign a prescribed agreement within 15 days of booking and deposit its copy with the KBCA. The builder shall complete the project in time –usually three years – given in the NOC and in case of delay shall pay liquidated damages to the buyer at the current bank interest rate and ask for escalation of price from the KBCA.

In case of any delay by buyers in payment of instalments, the law says, they shall pay a penalty equal to current bank interest rate on the amount of the delayed instalments. The seller can cancel the booking if three instalments are not paid after issuing a 30-day cancellation notice to the buyer and depositing its copy with the KBCA.

The regulations also bind builders not to rebook a cancelled unit within 30 days of receipt of the cancellation letter’s copy by the authority, provided the developer shall publish the cancellation notice in the weekend edition of two leading newspapers of English and Urdu in the classified advertisement section in bold letters under the heading of Cancellation of Flat/Unit.

If the booking is cancelled in case of default on instalments or agreement terminated on buyer’s own choice, the builder/developer within 30 days shall refund the total payment made to them after deducting four per cent of the in stallments paid by the buyers. In his petition, Mr Gilani of the Transparency International Pakistan had prayed to the court that all the mandatory requirements under the KBCA regulations, which are to be complied with by builders/developers and the KBCA like inspections and issuance of quality control certificates during the construction work, should be made available on the websites of the KBCA as well as of the builders/developers for public knowledge and monitoring. Besides, it was demanded that builders should ensure that a register with up-to-date information about number of booked units/plots and names of their investors be placed at a prominent position at all site offices to facilitate inspections so that chances of multiple booking could be eliminated.

Additional Advocate General Sarwar Khan and Shahid Jamil, who represented the KBCA in court, said that all relevant information would be uploaded on the KBCA website on the court order but the Association of Builders And Developers should be summoned in order to get the information posted on the builders’ website.

The court also issued a notice to ABAD and adjourned the hearing till Sept 29.


COAS asked to bring transparency in procurement and DHAs
Dawn September 7, 2009

ISLAMABAD, Sept 6: The Transparency International Pakistan has requested Chief of the Army Staff General Ashfaq Parvez Kayani to implement the public procurement rules 2004 in the defence purchase division and the defence housing authorities to make the army an exemplary and corruption free institution.

While drawing the army chief’s attention towards handling of funds by the defence purchase division and the defence housing authorities in Islamabad, Lahore and Karachi, the TI praised the army chief to bring professionalism and transparency in armed forces administration in general and pro curement in particular which it says were being acclaimed as good steps nationally as well as internationally.

“However, there is still a lot to be achieved in procurements by the armed forces,” says Chairman of Transparency International Pakistan Syed Adil Gilani in a letter to the army chief, copy of which was made available to Dawn.

TI does not want the armed forces to get a bad name due to any irregularities and violation of the public procurement rules 2004, Mr Gilani said in the letter.

“We request you to make army procurements corruption free. You may like to declare the army cor ruption free by declaring zero-tolerance against corruption.” The chief justice of Pakistan has committed to do it for judiciary.

The provisions, which have made the public procurement rules 2004 ideal and most transparent, are to provide prequalification/tender documents which shall include all relevant information including the detailed evaluation criteria and bid award method, specifications in the tender documents, signing of integrity pact and declaration of agent's agreement, evaluation of lifecycle cost for equipment, evaluation report to be provided to bidders 15 days before award for filing objections and also to be posted on PPRA website (except for procurements related to national security whose publication could jeopardise national security objectives). Contract for supply, works and consultants to be awarded only to the lowest responsive evaluated bidder, rights of bidders for complaint on evaluation report and reply by department within 10 days, and publication of contract agreement and evaluation report on the website after the award of contract.

Any violation of these rules is treated as mis-procurement. These were initially viewed as very unconventional rather biased against the client. But experience endor ses that call of a final price induces a very competitive bidding and pre-award disclosure eliminates opacity by providing an equal opportunity to any complainant without having to delay the process.

TIP has also written letters to the Defence Purchase Directorate and administrators of DHAs to provide it with evaluation reports of all contracts awarded between 2005 and 2009.

The Public Procurement Regulatory Authority (PPRA) was receiving requests from government ministries seeking exemption from operation of PPR of the PPRA Ordinance 2002. The Managing Director of PRRA, Hafizur Rehman, in a letter to all federal secretaries has stated that exemptions under “unavoidable circumstances must clearly mention that national interest was being safeguarded through proposed exemption.” The PPRA has been mandated to ensure transparency, economy, efficiency and accountability of the public sector procuring agencies through proper implementation and monitoring of PP rules 2004.

The PPRA managing director recently wrote a letter to the secretary defence that PP rules 2004 required all procuring agencies to devise a mechanism for annual planning in detail for all proposed procurements with the objective to realistically determine the requirements of the procuring agency within its available resources, delivery time, completion date and benefits that are likely to accrue to the procuring agency and shall proceed accordingly.

The annual requirements thus determined are also required to be advertised in advance on the authority’s website.

Unfortunately, response from procuring agencies in placing their annual proposed procurements on authority’s website since implementation of the Rules in 2004 has remained very poor.


NAB starts probe into TCP's irregularities
Business Recorder September 7, 2009

ISLAMABAD (September 07 2009): The National Accountability Bureau (NAB) is said to have started a probe into huge procurement and financial irregularities in Trading Corporation of Pakistan (TCP), a subsidiary of Commerce Ministry, official sources told Business Recorder.

They said that TCP's agreements with sugar mills, as well as contracts awarded for import of sugar, urea and wheat are the main focus of investigation. They said that at least two or three former heads of the TCP allegedly embezzled huge amounts of money by awarding contracts of sugar and urea at rates higher than in the international market. And, public procurement rules were frequently violated. According to sources, the latest scam is the transportation of imported wheat from Karachi to provinces at inflated charges.

A committee, headed by Minister for Food and Agriculture (Minfa), observed that TCP had incurred excessive cost in transporting imported wheat to upcountry areas. The proposal of the Minfa to allow the deficit provinces to lift their allocated wheat under their own transport arrangements was not accepted by TCP. This resulted in inordinate delays in transportation of wheat to meet shortages in the provinces. The Ministry has further conveyed that TCP has its own panel of truck owners with monopoly over wheat transportation, leading to delays and cost overruns.

Provincial governments also expressed similar concerns against TCP which, according to the committee's findings, is backing the transports mafia.

Based on consultation with the stakeholders the committee has made the following observations: (i) transportation of imported wheat by TCP is being carried out without consultation with the provinces; (ii) cost of transportation of the wheat is on the higher side compared to rates obtained by the Provincial Governments through open bids; and (iii) inordinate delays reported in transportation of wheat to the provinces due to stocking of wheat in TCP godowns at Pipri and Korangi with additional unnecessary expenditure incurred on account of wheat handling, loading and unloading. Lack of co-ordination between TCP and provinces also led to excess wheat transported to stations with lower allocations by the respective provinces.

Sources said that when the issue came under discussion in the ECC on September 1, 2009, the committee was informed that all wrongdoings in the TCP were now being investigated by NAB/FIA.

"ECC was apprised that complaints regarding irregularities in TCP are presently being investigated by NAB/FIA. Finance Minister desired that investigations may be expedited and report of investigations should be submitted to the ECC," sources added However, the ECC has expressed its satisfaction over the improvements introduced in TCP by the present management.

After hearing the debate, the Finance Minister advised the concerned authorities that as Railways freight is thirty-three percent lower than the private sector the TCP should utilise Railways as first choice for transportation of government stocks. Pakistan Railways has also been asked to aggressively market its freight service among the provinces.

Transparency International Pakistan (TIP) has also termed recent amendments in sugar import tender by the Trading Corporation of Pakistan (TCP) as 'corrupt and fraudulent', "the key purpose of which appears to be the benefit of one party".

Sources said that FIA's team is going through the files, which are related to local procurement and import of commodities.

There are also indications that the former Chairman of TCP may be taken into custody. However, this has not been confirmed by officials.


Rental power procurements: PPIB and Pepco avoiding to provide information to TIP
Business Recorder September 5, 2009

KARACHI (September 05 2009): The Private Power Infrastructure Board (PPIB) and Pakistan Electric Power Company (Pepco) are avoiding supply of evaluation report and contract agreements of rental power procurements (RPPs) to Transparency International Pakistan (TIP).

Adil Gilani, Chairman of TIP, in several letters sent to Pakistan Power Resources (PPR) since July 24 had been emphasising that according to the laws of Pakistan, it is mandatory on PPIB and Pepco to provide the information asked for by the TIP.

The failure of the Ministry of Water & Power and the procuring agencies to respond to TIP request is strengthening the doubts about non-compliance of rules, especially the post-tendering terms of fuel supply guarantee by Government of Pakistan (GoP), almost one year's rental being paid in advance and government's obligation in case of its failure to supply gas.

PPR is an Oklahoma-based US company, which is 65 percent owned and controlled by Lahore-based Associated Group. David Walters and his firm Walters Power International (WPI) is a minority partner (35 percent) in PPR.

TIP has made it clear that standard procedures are required to be completed by Wapda, PPIB and Pepco, and also the contractors in processing and award of any contract, and it is also the contractor's responsibility to comply with all procedures. Any violation leading to proof of corruption is to be dealt as per the Integrity Pact (mandatory on PPR also) signed by the contractor.

It was further stated that in case if any violation is detected in future in the award of RPP contract in any one of the 50 requirements of Public Procurement Rules 2004, the contract award may be declared as "mis-procurement". TIP has advised PPR in its own interest to ensure that all rules "have been completed by your firm". TIP aims at building a coherent national integrity system, to institutionalise efforts to curb corruption, and make the country zero tolerant against corruption.

Adil has pointed out in his letter that as there were frequent stories appearing in the newspapers pointing to corruption in tenders of rental power being acquired by the Government of Pakistan under the policy framed by the government to have immediate power to cover up the shortfall, TIP contacted the ministry concerned on July 24, 2009.

It had requested the Minister of Water & Power for the copies of the tender documents containing Terms of Reference (TOR) and GoP terms to confirm that all bidders were provided the information that GoP would make 7 percent to 14 percent advance payments, the evaluation criteria, evaluation report declared and given to bidders 10 days before the award of contract under Rule No 35, copy of the Integrity Pact signed by the bidders and contract agreements, evaluation reports, and compliance of Rule No 35 of PPR 2004.

He has emphasised that transparent competitive bidding process and only competitive bidding process are two different subjects. Under the laws of Pakistan, all bidding process by public sector shall be transparent competitive bidding, which are based on the following principles:

1 Terms of Reference and scope of work shall be clearly defined in the bidding documents, including the specifications, detailed evaluation criteria on which contract is to be awarded (in such cases as RPP, life cycle cost is mandatory as use of gas as fuel and furnace oil will make a huge difference in evaluated cost to the lowest bid).

2 Once the bids have been received and publicly opened, there can be no change in the specifications, nor in the terms of reference like government guarantees, mode of payment, advance payments, time of completion, etc.

3 For competitive bidding, the documents shall include the following: invitation to bid, instructions to bidders; form of bid, form of contract, general or special conditions of contract, specifications and drawings or performance criteria (where applicable); list of goods or bill of quantities (where applicable); delivery time or completion schedule. Qualification criteria (where applicable), bid evaluation criteria, format of all securities required (where applicable), details of standards (if any) that are to be used in assessing the quality of goods, works or services specified; and any other detail not inconsistent with the rules that the procuring agency may deem necessary, and any information that becomes necessary for bidding or for bid evaluation, after the invitation to bid or issue of the bidding documents to the prospective bidders, shall be provided in a timely manner and on equal opportunity basis. Where notification of such change, addition, modification or deletion becomes essential, such notification shall be made in a manner similar to the original advertisement.

Any post-tendering change in these terms renders the contract award as mis-procurement, and comes under the definition of corrupt practices, which are defined as "corrupt and fraudulent practices" and includes offering, giving, receiving, or soliciting any thing of value to influence the action of a public official or the supplier or contractor in the procurement process, in contract execution to the detriment of the procuring agencies; or misrepresentation of facts in order to influence a procurement process or the execution of a contract. Corrupt practices also include collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the benefits of free and open competition and any request for, or solicitation of anything of value by any public official in the course of the exercise of his duty. The Chairman of TIP has reiterated that PPR should use its good offices with the Ministry of Water and Power, PPIB and Pepco and provide the required documents.


2005-2009: TIP asks DHA to provide details of contract agreements
Business Recorder September 4, 2009

ISLAMABAD (September 04 2009): Transparency International Pakistan (TIP) has asked the Defence Housing Authority (DHA) to provide details of all contract agreements awarded from 2005-2009 as well as National Accountability Bureau's (NAB) evaluation, under Rule 47 of Public Access and Transparency.

The Public Procurement Regulatory Authority (PPRA) has written at least four letters to the Secretary Defence Ministry stating that it would be appreciated that the organisations under the administrative control of the Defence Ministry are directed to ensure strict compliance of Rules-8 & 9 of PP Rules, 2004 and furnish their proposed annual requirements of the financial year 2009 -10 for placing on Authority's website at the earliest.

TIP has noted from DHA Islamabad website that it has awarded contracts worth billions of rupees to different contractors. According to the Rules as soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of contract public.

TIP, in its letter to Brigadier Javed Iqbal (Retd), Administrator, Defence Housing Authority, stated that on May 28, 2005 Emaar Properties PJSC, a UAE based company, signed an agreement with DHA Islamabad to form a Joint Venture company, for constructing and managing residential houses, commercial premises, bridges etc in DHA Islamabad.

On August 9, 2005, Meinhardt (Pakistan) pvt Ltd, entered into another agreement with DHA for providing consultancy services on development of Phase II Extension. It had to undertake to develop 4,000 acres of land "project" of Phase-II extension DHA Islamabad. The project was envisaged to be high class development comprising residential and commercial plots, public amenities like schools, colleges, parks, playgrounds, stadiums, sports complex, town halls, community centres, club houses, libraries, mosques, utility buildings and other ancillary facilities.

An agreement had been signed with HRL on 18th of May, 06 for the development of Phase I-Extension and earth breaking ceremony was on 6th June, 06. Total area to be developed by HRL is 1,500 acres in phase-1 extension. Habib Rafiq (pvt) Ltd has been committed for all the development work in phase-I, II including roads, parks etc. Habib Rafiq (pvt) Ltd has successfully completed other ambitious projects.

On September 1, 2009, DHA in collaboration with the Bahria Town and Habib Rafique Limited (HRL) launched a low-cost housing project 'DHA Valley and DHA Valley Overseas Block'. Balloting for the project was held at the DHA Valley Expressway Phase II Extension. Addressing the gathering on the occasion, DHA Administrator Brigadier Javed Iqbal (Retd) said the project was designed for low-income people.

"We are determined to complete the project in time," he added. He stated that the project would have all basic facilities of life like schools, parks and shopping centres. Bahria Town Chairman Malik Riaz said they had taken care of public. "An ordinary person can only dream to have luxuries of life, but we made it possible in the DHA Valley. We have taken care of the salaried class and they will be having all world-class residential facilities in the project. In this phase, we have developed 5- and 8-marla plots. More than 90,000 people, both in Pakistan and overseas, have registered with us through this project," he said.

Malik Riaz assured the allottees that the project would be completed well before its time. The chief engineer of the project said the scheme would be a world-class residential experience. He said an American firm, OJMR-Los Angeles, has designed the project.

"We would like to remind you that as Director NAB Sindh, you and TI Pakistan worked tirelessly with NAB for transparent implementation of Public Procurement Rules 2004. We hope you will follow PPRA Rules 2004 in DHA Islamabad too, and change of posting from NAB to DHA has not affected your understanding," the TIP reminded Administrator DHA.


PML-N files adjournment motion to debate corruption
Daily Times September 2, 2009

ISLAMABAD: Pakistan Muslim League-Nawaz (PML-N) filed an adjournment motion with National Assembly Secretariat on Tuesday seeking debate on a Transparency International Pakistan report that claimed a 400 percent increase in corruption in Pakistan.

The motion has been signed by three PML-N lawmakers – Raja Muhammad Asad Khan, Nighat Mir and Malik Shakir Bashir Awan. The lawmakers have said the Transparency International Pakistan report showed a “stunning increase” in corruption in Pakistan. The PML-N members said according to the report, the quantum of corruption money had increased from Rs 45 billion in 2004 to Rs 195 billion in 2009.

They said the international organisation had mentioned that corruption could not be rooted out in the presence of the National Reconciliation Ordinance (NRO). They held the government responsible for the 400 percent increase in corruption.


PSMC posts historic loss of Rs 22 billion
Business Recorder August 28, 2009

KARACHI (August 28 2009): The country's single largest steel producer - Pakistan Steel Mills Corporation (PSMC) has posted historical loss of over Rs 22 billion in FY09 - first time in nine years due to ineffective policies, non technical management and global economic recession, Business Recorder learnt on Thursday. The government owned PSMC was a profitable organisation till FY08 as it was enjoying good profits since FY01, however it has been suffering massive losses since then.

Sources said the current loss has been registered during the tenure of recently sacked chairman Mueen Aftab and less than target production and sales, import of raw material on high rates, ineffective policies and non technical management are some of the chief factors behind the huge losses registered during last fiscal year.

They said that slow demand of steel products in the domestic market due to the global economic meltdown is also a major reason in the rising losses of the mill. Pakistan Steel's provisional financial documents for the period ended June 30, 2009 made available to Business Recorder revealed that the Corporation faced a historical loss of Rs 22.143 billion during July-June of 2008-09 as compared to a profit of Rs 2.375 billion in 2007-08.

Historical loss during the last fiscal year has been witnessed after eight years of constant profitability. As during FY01 the mill posted Rs 552 million profit, Rs 102 million in 2001-02, Rs 1.042 billion in 2002-03, Rs 4.852 billion in 2003-04, Rs 6.008 billion 2004-05, Rs 929 million in 2005-06 and Rs 3.19 billion in 2006-07.

Sources said despite production and operational losses, the management of PSMC led by Mueen Aftab adopted inefficient policies and purchased raw material on higher rates, which pushed up the losses of the corporation. PSMC was in profit in the first month of last fiscal year as it earned Rs 52.5 million profit in July 2008, however the corporation is posting loss since August 2008, when recently sacked chairman Mueen Aftab took the charge, they added.

PSMC registered a loss of Rs 55 million in August 2008, Rs 200 million in September 2008, Rs 660 million in October 2008 and Rs 4.1 billion in November 2008. In addition, some Rs 2.5 billion losses were witnessed in December 2008, Rs 2 billion in January 2009, again Rs 2 billion in February 2009 and Rs 2.1 billion in March 2009. The cumulative loss for the last fiscal year stands at over Rs 22 billion.

Sources said that PSMC entered an agreement for purchase of iron ore in April 2008, when the prices were at peak level. With a production capacity of some 1.1 million tons PSMC having some 20 percent share in domestic market, is now facing huge financial crisis due to consecutive losses in last fiscal years, they added.

Sources said that PSMC sales have also declined by 18 percent to Rs 33.154 billion in FY09 as compared with Rs 40.624 billion in FY08. PSMC management adopted an ineffective marketing policy, which pushed up the losses of the mill. With an aim to reduce inventory and enhance sales, the PS management sold some products under cost, which also enhanced the losses of the corporation, they added.

MS billet is one of the major products of PSMC, which was being sold some Rs 30,000 per ton less than cost. During FY08 with over Rs 3.543 billion profit PSMC also paid Rs 1.168 billion tax to the exchequer, while due to massive losses, the corporation has not paid tax in FY09.

Current liabilities of the corporation also mounted to Rs 28.129 billion in 2009, which stood at Rs 8.24 billion in FY08. When contacted, Managing Director PSMC Rasul Bux Phalpoto told Business Recorder: "Global economic crisis, rising commodity prices on international front and mismanagement are some chief reasons for huge losses in last fiscal year."

He said now the new management is taking several steps to improve the financial condition of the mill and it is expected that PSMC would post profit during the current fiscal year.

Prices of raw material and international shipping freight have declined sharply, which reduced the cost of production, he said and added, "earlier we were compelled to sell products under cost due to slow economic activities and decline in the international steel prices." He said that prices of iron ore have declined to 80-90 dollars per ton from 110-120 dollars per ton, while shipping freight has been reduced from 114 dollars to 34 dollars per ton.


TI-P seeks valuation report, contract agreement of RPPs
The Frontier Post August 28, 2009

KARACHI (PPI): Transparency International Pakistan has asked the Pakistan Power Resources (PPR) to supply the ‘evaluation report’ and ‘contract agreement’ of rental power procurement made by the PPIB and PEPCO so as to ensure there is no corrupt practices in the tendering process. In a letter sent to the Pakistan Power Resources (PPR), copies of which were also sent to the Chairman Public Accounts Committee, National Assembly; Federal Minister for Water and Power, Managing Director PPRA, Managing Director PPIB, Chairman Wapda and Auditor General of Pakistan, TI-P Chairman Syed Adil Gilani said the Transparency International Pakistan on August 7 requested the PPR to use its good offices to tell its clients, PPIB and PEPCO, to provide Contract Agreement/ Evaluation Report of all contracts to TI Pakistan, but it was not supplied the documents by PPIB and PEPCO, and instead it got another letter from director PPR. TI-P Chairman wrote: “It is felt necessary to reply this letter, as it contain s issues relevant to Transparency and Accountability of so-called often contradictory press reports of last three successive governments to bridge the power demand, and allegations that a ‘willful campaign to scuttle power projects of the sake of political point scoring’. “TI Pakistan has been informed that for the Rental Power Projects to be commissioned by end of 2009, in the evaluation report of PPIB dated December 1, 2008 at Eminabad, Gujranwala 80.50mw by Gulf Rental Power GRP, and at Gojra by IPL. The bid of IPL was evaluated as responsive with relation in the Net worth condition. The Rental Cost with Fuel RFO is Rs11.46 by IPL and Rs9.55 by GRP.” The TI further said against the electricity costs through rental power plant, Pakistan Power Resources (PPR) advertised in Dawn last week that the electricity for RPP, PPR is supplying at Bhikhi to PEPCO is at Rs5.86. “Your ad may be true, but why you are charging 100% more for Gojra?” TI said we appreciate your efforts with WAPDA, PEPCO and PPIB to supply the documents to TIP, which are mandatory on them under PPRA Ordinance 2002, and Regulations 2007 under SRO 805(I)/2008. “Your are a party to Contract Agreement, and it is in your interest that this requirement shall be met by Government of Pakistan (GoP). In this regard the TI-P quoted the relevant rule, Posting of contract awards on PPRA’s Website: All procuring agencies whether within or outside Pakistan shall post Contract Awards over fifty million rupees on PPRA’s website on the proformas as set out in Annexure-I and Annexure-II to these regulations. TI-P continued; “Another issue raised in your director’s letter is in the 44th paragraph, which states: ‘We are of the firm belief that the matter must be examined and reviewed dispassionately with the involvement and assistance of representatives of the previous and present governments, and the sponsors of rental power projects, without sanctifying what increasingly appears to be willful campaign to scuttle power projects for the sake of political scoring. You may be well aware of a similar campaign undertaken in the 1990s against IPPs and regrettable outcome of the campaign.’ The TI-P wrote without going into the merit of proposal by your director, it is fact the more than 12 IPP voluntarily reduced their tariff, when corruption inquiry was conducted. TI Pakistan quotes the World Bank report on 1990s IPPs projects, which indirectly conforms that the IPPs were not acquired according to the prudent procedures. The report says “Several important lessons can be drawn from the Pakistan experience. Setting a bulk tariff ceiling allowed Pakistan to alleviate its power shortage through private generation in record times; however, too much power was contracted with little regard for least cost expansion. The scale of private investment in generation should be aligned with the country’s state of development with respect to sector reforms and also social, economic, political and institutional governance. In addition, solicitation of IPPs should be on a competitive basis and staggered over a few years so that changes in international investors’ assessment of country and contract risks could lead to declining bid prices. Staggering IPP solicitation and scaling down large IPP capacity would allow the utility to re-asses demand/supply conditions and adjust the contracted capacity and completion timing of subsequent IPPs, accordingly. It is being said by many experts, continued TI-P, that these recommendations were not adhered to by GoP for the present procurement of RPPs, and that IPPs shall first be operated fully before considering the requirement of RPPs. Like KESC has contracted in December 2008, five year RPP with M/s Walters Power International (may be your partner), with bank guarantee or LC for 5-year Rental, at higher cost than IPPs, and not paying cost of two IPPs - Gul Ahmed and Tapal- arrears of Rs7billion, and they are closed. TI-P asked is it is prudent electricity generation and distribution business practice to ignore cheap electricity and buy costly electricity, adding SECP has issued notice to KESC for these acts. About 14 percent advance and exemption of 6 percent withholding tax, the TI Pakistan said that any condition allowed at the pre-tender stages in tender documents issued to all bidders, shall not be changed in the post-tender stage, and contract award shall only be made on the pre-tender conditions to the responsive, qualified and lowest evaluated bidder. Any such change or relaxation is a corrupt practice. ‘As has been stated in your letter that these conditions were known to all bidders at the pre-tender stage, then TI Pakistan has no objection. But documents have to be provided by GoP to TI Pakistan to verify your claim, said TI-P. Transparency International Pakistan reminded it is known to all that white collar corruption is very difficult to prove. Even famous Al-Capone was never convicted on his Syndicate crimes of extortion, murder, gambling, but was convicted only for income tax default of a few thousand dollars. ‘And in procurement, most of the money corruption occurs due to manipulation of procedures.’ It added however, in Public Procurement Rules 20044, it has been made quite clear that many violation of the 50 Rules amount to misprocurement. It said this is an important law, which has made corruption in tendering process a high risk activity. “This law was not available in 1990s. But since 2004 this is the law, and hence it is difficult to repeat pre-2004 corrupt practices in tendering.”


Accountability should start from top: minister
Dawn August 19, 2009

ISLAMABAD, Aug 18: Terming elimination of corruption from the society and ensuring merit as the only way forward for country’s progress, Minister of State for Information Syed Sumsam Ali Bukhari on Tuesday observed that accountability should start from the top.

Speaking at a seminar on ‘Ensuring Good Governance through Strengthening Administrative Justice and Accountability’, he said prevalence of corruption in the country was a shame for every Pakistani and all patriotic forces should join hands for a corruption-free society.

The two-day seminar has been organised by Wafaqi Mohtasib’s Secretariat in collaboration with United Nations Development Programme.

“If someone places us on the list of corrupt countries, then it should be a matter of shame for all of us. We all have to pull up our socks and go into the field and fight the menace of corruption, which is damaging the country as well as its reputation,” he said.

Stressing on the need for following merit, the minister said it was the only way forward. He said there were concerns from some parliamentarians regarding merit as they advocated quota system, however, majority favoured merit.

He said the government would soon introduce legislation providing for allocation of 15 to 25 per cent quota in schools for poor children. He said the legislation would be part of the efforts to provide maximum opportunities to the poorest of poor. “Unless we empower our people with knowledge, we will not be able to create an effective partnership with them for better and accountable governance, which is the essence of democracy,” he said.

The minister said media in the country was independent and the government had never asked Pemra to stop a channel from criticising the government and its policies.

“We realise that by setting up channels for communication and participation, the government opens itself up to criticism. But as we all agree today, dissent is the beauty of democracy and it serves as a corrective tool for government to keep itself finely tuned to the needs of the people whom it endeavours to serve,” the state minister said. He however stressed that there should be code of ethics for media too.

Senate Chairman Farooq H. Naek said the PPP-led government never used laws as tools to intimidate politicians and public like its predecessors. He said the previous rulers used National Accountability Bureau (NAB) for their political objectives by introducing specific amendments to target leaders like Benazir Bhutto and Asif Ali Zardari. “But our government never misused such laws,” he said.

About administrative justice, he said, its primary purpose was to keep powers of government within legal bounds and to protect citizens against their abuse.

Secretary Informaton Ashfaq Gondal said today, more than 60 private TV channels, approximately 100 radio channels and 1,600 newspapers and periodicals were thriving in a democratic Pakistan.

How free our media is today can simply be judged by the fact that the government and its representatives now face a round-the-clock pressure to justify and explain their every word and action to a 24-hour operating media cycle, he said.

Chairman Transparency International Pakistan Syed Adil Gilani called for bringing the army and judiciary under the ambit of accountability.

He observed that the freedom of information ordinance 2002 lacked a lot of necessary details and was restrictive in its scope due to a large number of exemptions provided in it.


The cost of corruption
The News August 17, 2009

EDITORIAL (August 17 2009): It seems that the cancer of corruption is spreading fast in all organs of the state. Speaking at a capacity building and training workshop, jointly organised by the Transparency International Pakistan (TI) and the Public Procurement Regulatory Authority (PPRA), Deputy Auditor General, Muazzam Hussain and the Federal PPRA Chief, Hafeez-ur-Rehman revealed the shocking reality that if 40 percent of the allocated funds were actually spent on the project, then it was considered to be executed in an "honest" way.

PPRA Chief, who had also served in Balochistan, said that some officials in the province had even obtained a fatwa (religious decree) that the "commission or kickbacks" they got on the contracts - which amounted to 60 percent of the deal - were "halal" (permissible), as it was given to them for the hard work they had done to negotiate the deal. However, the recent PPRA rules, which were based on fair competition, transparency and accountability, are a major improvement from the earlier procurement processes. With the uniformity of rules in place, the auditors could now carry out a better audit and ensure the judicious use of funds. Proper audit is as important as a post-mortem or forensic examination of a body.

This was not the first time that corruption at such a high scale was highlighted in the country. Earlier in 1996, the TI had declared Pakistan the second most corrupt country in the world. Such a ranking had caused an uproar in the country and some measures were, subsequently, taken to improve governance, with the result that the transparency score of Pakistan, rose from one out of a total score of 10 to 2.53 in 1997 and further to 2.7 in 1998, which proved to be the highest level.

During the much trumpeted period of better governance under Musharraf, the highest transparency score achieved by the country was 2.6 in 2002, which declined to 2.1 in 2004 and 2005. It, however, improved to 2.5 in 2008. At the transparency score of 2.5, corruption stood at a pathetic level of 75 percent. The National Corruption Perception Survey 2009, conducted by the Pakistan chapter of TI, indicates that overall, corruption increased from Rs 45 billion in 2002 to Rs 195 billion in 2009. The Police and Power maintained their ranking as the two top most corrupt sectors in the country.

Whether Pakistan is the second most corrupt country in the world or the corruption level is at 60 percent or 75 percent, is a matter of judgement, based on a variety of factors, including the persons interviewed and the methodology adopted for the survey.

However, what is clear from such exercises is that Pakistan is almost at the top of the corruption index and a large part of the development budget is pocketed by people involved in the execution of projects, at different stages. Such a position should be unacceptable for obvious reasons. Corruption and kickbacks dampens the spirit of entrepreneurs and is highly frustrating for the people of the country.

If corruption could somehow be eliminated, Pakistan would need only one-fourth of the present development budget for its annual development programmes, which would have a highly favourable impact on the fiscal position or the country could derive almost four-fold benefit from the existing amount of allocations. Even a modest reduction in corruption would be welcome. India and China were able to improve their score to 3.4 and 3.6 respectively by 2008, with a highly favourable impact on their economies. Pakistan, too, could improve by implementing certain strict policies and change the mindset of the persons involved.

PPRA could start by streamlining the procurement processes and audit regulations, but more needs to be done by changing the overall social setting in which individuals, indulging in corruption could be shunned and hated by society and properly punished by the law enforcing agencies. Such a job would not be easy in the present set up, but is a must if the country wants to attract a higher level of investment, increase its growth rate and reduce the level of poverty and unemployment.

In our view, it is good that organisations like TI and the Heritage Foundation continue to highlight the phenomenon of corruption in various countries. This increases the pressure on corrupt countries to do something about this menace and improve their standing in the Corruption Perception Index.



Rental power vs IPPs
The News August 11, 2009

1. Independent Power Producers (IPPs) take anywhere from two to five years to begin generating power while Rental Power Producers (RPPs) can be set up in less than a year.

2. The cost of electricity from RPPs stands at Rs14.65 per kilowatt hour while the cost of electricity from new IPPs is Rs11.77 per kilowatt hour.

3. As far as the cost of electricity is concerned, RPPs are 24 per cent more expensive than IPPs.

4. A typical second-hand, used 100 MW RPP sells in China for around $15 million while a brand-new 100 MW IPP by a reputable manufacturer costs around $100 million.

5. IPPs are mostly financed by foreign financial entities while the government is pressurising local banks and development finance institutions to finance RPPs.

6. Karkay Rental Power is the only RPP that is brand-new and is being financed by Turkish sources.

7. RPPs are paid a 'rent' that becomes a sunken cost while IPPs are under contract to handover their plants to the government after 30 years at a cost of Re1.

8. RPPs are being offered a 'machinery mobilisation advance' which is equivalent to a payment of 14 per cent of their five-year rental while IPPs are given no such advance.

9. IPPs are mostly brand-new while most RPPs are used, second-hand generators (up to 60,000 hours old).

10. IPPs come with warranties and performance guarantees while most RPPs are without warranties and performance guarantees.

11. RPPs run at an efficiency level of around 37 per cent while IPPs run at an efficiency level of around 45 per cent.

12. The government is bent upon extracting Rs214 billion from Pakistani financial institutions to finance RPPs while most banks consider RPPs as 'non-bankable' proposals.

13. Large network Pakistani banks -- including Habib Bank, MCB Bank Limited, United Bank Limited and Allied Bank of Pakistan -- are not prepared to finance used RPPs in absence of manufacturer warranties and performance guarantees (Sheikh Al Nahayan and Mian Mohammad Mansha, the owners of United Bank Limited and MCB Bank Limited, respectively, are both setting up their own IPPs).

14. In case of IPPs, the Private Power and Infrastructure Board (PPIB) derives a tariff that is based on project cost while in case of RPP tariff is not based on project cost.

15. The PPIB requires all IPPs to disclose detailed project costs while there is no such requirement for RPPs. 16. Annual fuel payment for a typical 200 MW RPP amounts to $211 million while the same for an IPP amounts to $174 million -- a difference of $37 million a year or Rs3 billion a year per RPP.

17. Annual capacity payment for a typical 200 MW RPP amounts to $79 million while the same for an IPP amounts to $60 million -- a difference of $19 million a year or Rs1.5 billion a year per RPP.

18. If the PPIB brings in 1,900 MW of rental power Pakistan will end up paying $2 billion a year in annual fuel payments.

19. If the PPIB brings in 1,900 MW of rental power Pakistan will end up paying $750 million a year in annual capacity payments.

20. RPPs are a $3 billion a year question.

The writer is the executive director of the Centre for Research and Security Studies (CRSS).

Email: farrukh15@hotmail.com



Workshop on capacity-building
The Nation August 11, 2009

KARACHI - Transparency International Pakistan (TIP) and Public Procurement Regulatory Authority (PPRA) held a Capacity Building & Training Workshop at a local hotel on Monday. Hafeez-ur-Rehman, MD PPRA, Asif Ali of World Bank, Tariq Anwar of Asian Development Bank, and Rizwan Ahmed MD SPPRA. Public Procurement Rules was discussed in the first session, Procedure, Bidding Evaluation Document was the topic of the second session, and Transparent Procurement, Audit and was the third session of the workshop.

Hafeez-ur-Rehman in his speech said that procurement systems while low overall efficiency and corrupt contractors and burrs are the major flaws. Poorly paid staff, inadequate record keeping, and preparation of bid documents were also the flaws of previous procurement systems, and there is no law providing effective against corruption and collection, thus the contractors end up over run the cost of projects, he added. But now there is a moral check and in the new regulations we took best international practices along with efficient and quick dispute resolution and highlighting value of money in public, it was further.

Muazzam Hussain, on behalf of Auditor General Pakistan Tanvir All Agha, said that PPRA and TIP’s collaboration was to serve the nation, and it was the responsibility of PPRA to establish rules besides extending efforts to eradicate malpractices.

Ali in his speech said that key challenges for PPRA are institutional development, overlapping jurisdiction with Pakistan Engineering Council (PEC), applications and interpretation of rules, sustainability of PPRA as regulator, and links with market which include links with contractor and great engagement with trade industry and associations.

While some next steps could be Independent second tier process. (procurement ombudsman and other modals); monitoring and evaluation (conduct baseline indicators, establish key performance indicators for quality and performance, benchmarking, monitor performance and apply to planning process); and capacity building (steps for procurement excellence, establish international linkages, procurement management institutes), he added.

Tariq Anwar of Asian Development Bank (ADB) said that ADB was one of the largest development partner in Pakistan as some US$800 million had been spent in the first seven months of the current year and it would be extended up to US$1.3 billion by the end of 2009. The key problem in Pakistan is weak capacity of handling procurement and dispersion, resultantly the delays by virtue of the cost refunds which is again a huge loss, however, we are also receiving our procedure through our innovative and efficient programmes for having harmony with the governmental procurement rules, he added.



TIP for display of public awarded contracts on websites
Business Recorder August 11, 2009

KARACHI (August 11 2009): Transparency International-Pakistan (TIP) has demanded of the government departments to put all the awarded contracts along with Bill of Quantity Rates on their websites with a view to ensuring fair play and transparency. The demand was made by TIP Chairman Syed Adil Gilani during "Capacity Building and Training Workshop" held here at a local hotel Monday with Auditor General of Pakistan Tanvir Ali Agha being its chief guest, who, however, could not attend the programme for certain reasons.

The daylong workshop, which was jointly organised by TIP and Public Procurement Regulatory Authority (PPRA), was also told that the preparation of Special Bidding Document for Goods and Services (SBDGS) was going on and would soon be published.

The three-session training moot was chaired by Deputy Auditor General (DAG) Muazzam Hussain, Managing Director PPRA Hafeez-ur-Rehman and KPT Chairperson Nasreen Haque with officials from government institutions like KPT, PQA, PIA, Pakistan Steel Mills, National Bank of Pakistan etc.

In his address, TIP chairman Syed Adil Gilani called upon the government institutions to place details of all the awarded contracts on their websites along with the Bill of Quantity Rates in compliance with Rule 47 of PPRA 2004. He briefed the participants about the TIP Corruption Perception Index, NCPS 2009 and different violations of public procurement rules in the country.

Introducing the corruption watchdog, Executive Director of TIP Saad Rashid highlighted its objectives and activities. DAG Muazzam Hussain gave an account of core values of PPRA, which, he said, had a direct impact on the economy and should, therefore, be strictly abided in the procurement processes.

Dwelling upon the role, responsibilities and efforts of PPRA in pursuance of its objectives, MD PPRA Hafeez-ur-Rehman put emphasis on capacity building in the procurement process in public institutions. Asif Ali of World Bank, highlighting importance of the formation of Country Systems for procurement, said PPRA underlined the key challenges PPRA was facing, like the application and interpretation of rules.

Tariq Anwar of Asian Development Bank (ADB) saw a weak capacity of the counterparts as a key problem in the procurement process and termed capacity building essential for the comprehension and compliance of PPRA rules. Terming the PPRA rules as of an internationally-accepted-standard Rizwan Ahmed, Managing Director SPPRA, explained the importance of his institution in the implementation of rules. He also said the preparation of SBDGS was under process and would soon be published.

Besides shedding light on the mandate of Auditor General of Pakistan, DAG Muazzam Hussain informed the workshop about various types and requirements of audit in the light of PPRA rules. In her concluding address, KPT Chairperson Nasreen Haque underscored the need for a strict compliance of PPRA rules in public procurement processes along with a regularly-conducted internal audit that, she said, would lessen the need for external audit.



Corruption eats up most uplift funds
Dawn August 11, 2009

KARACHI, Aug 10: Almost 60 per cent of the development budget in the country is generally pocketed by people involved in projects at their different stages, revealed a top auditor and a procurement regulator on Monday.

Speaking at a capacity building and training workshop jointly organised by the Transparency International Pakistan and the Public Procurement Regulatory Authority (PPRA), the deputy auditor-general, Muazzam Hussain, and the federal PPRA chief, Hafeez-ur-Rehman, revealed the shocking reality that if 40 per cent of the allocated funds was spent on the project, then it was considered to be executed in an ‘honest’ way.

Answering a question, they said that PPRA rules did not give a blanket exemption to any ministry or government department from declaring details of expenditure.

They said that for not disclosing specifications of procurements of the armed forces — which as a matter of routine are designated as “classified” — the defence ministry had to submit an exemption request to the prime minister through a properly laid down procedure. And the prime minister granted permission on a case-to-case basis, they added.

Auditor Muazzim Hussain said that the PPRA rules, which were based on fair competition, transparency and accountability, were a major improvement from the earlier procurement processes.

He said that these rules also had made the job of auditors much easier as earlier the auditors had to follow different sets of rules and regulations for auditing different departments.

Now with the uniformity of rules, they could carry out better audit and the public funds could also be spent more judiciously, he said.

Federal PPRA chief Hafeez-ur-Rehman said that the previous procurement system was flawed and conditions of pre-qualification and registration of suppliers and contractors were grossly misused and such conditions were now available only for highly specialised contracts.

Another favoured way of doing things was bid negotiation, which was not allowed under the PPRA rules, he said.

The federal PPRA chief who had also served in Balochistan said that some officials in the province had even obtained a fatwa (a religious decree) that the ‘commission or kickbacks’ they got on contracts — which according to him amounted to 60 per cent of the deal — was ‘halal’ (permissible) as it was given to them for the hard work they had done to negotiate the deal.

Asif Ali of the World Bank said that while giving training to procurement officials was important, the contractors and suppliers, who were also an integral part of the procurement process, should also be targeted and trained.

He said that audit was as important as a post-mortem or forensic examination. It could detect how or why funds had been misappropriated, he said.

The World Bank was stressing that the PPRA rules be followed so that funds were spent in a transparent and judicious manner, he added.

Tariq Anwer of the Asian Development Bank said that a blacklisting procedure was also laid down in the rules and it was suggested that the names of the defaulting contractors should be widely publicised so that other government departments could know about them and they did not give them any contract.

Adil Gillani of the Transparency International Pakistan, mentioning accountability procedures for different groups of people, like the armed forces and the judiciary, stressed that there should be one set of rules that should govern everybody without any discrimination.

The presentations were followed by a question-answer session.



Transparency International-Pakistan Scrutinizes Power Rental Projects
Tawani Portal August 10, 2009

Transparency International Pakistan (TIP) is an organization which investigates corruption issues. It has been working to find outif the power rental projects had any issues but the information gathering has been difficult. As is common in developing countries, not much information is shared by the government, although by law they are supposed to do provide such information.

TIP has sought help of Pakistan Power Resources (PPR), one of the rental power producers, to press Pepco and Private Power Infrastructure Board (PPIB) for provision of rental projects documents for thorough scrutiny. PPR had written to TIP, offering its full co-operation in reviewing the viability of rental projects.

“We had requested the Minister for Water and Power for the copies of the tender documents containing terms of reference and GoP terms (in order to confirm that all bidders were provided the information that GoP will pay 7 to 14 percent advance payments, the evaluation criteria declared and given to bidders 10 days before the award of contract under Rule 35, copy of the Integrity Pact signed by the bidders, and contract agreements, evaluation reports, and compliance of Rule 35 of Public Procurement Rules, 2004,” stated TIP in its letter to PPR.

“According to the laws of Pakistan, it is mandatory on Pepco and PPIB to provide necessary information to TIP. Failure of the Ministry and the procuring agencies to respond to requests is cementing doubts created by print and electronic media about alleged non-compliance of Rules, especially the post-tendering terms of Fuel Supply Guarantee by GoP, almost one-year rental being paid in advance, GoP obligations in case of its failure to supply gas,” stated TIP.

In the Friday session of National Assembly, Minister for Water and Power Pervaiz Ashraf vigorously defended government’s power policies by extensively detailing and rebutting the criticisms being made over the power crisis. The TIP letter to PPR is officially endorsed to the Chairman of National Assembly Public Accounts Committee, Federal Minister for Water and Power, PPRA Managing Director, PPIB Managing Director, Wapda Chairman, and Auditor General of Pakistan.


Corruption in Punjab, Baluchistan down: Transparency
The News August 4, 2009

KARACHI: Corruption in the provinces of Punjab and Baluchistan has declined while it has increased in the provinces of Sindh and NWFP, according to a recent survey conducted by Transparency International Pakistan.

A press release issued by Transparency International Pakistan (TIP) said that the survey carried out June- July 2009 in the four provinces regarding the citizens’ perception as to the level of corruption in the four provinces.

Compared to 2006, corruption perception in 2009 indicates that Sindh Province had surpassed Punjab Province as the most corrupt province. Corruption in the NWFP has perceived to have increased by 13%, Sindh by 5% while Punjab corruption is perceived to have decreased by 9% and Baluchistan by 10%.

On NRO, TI Pakistan has already said on 7th October 2007 that this ordinance was against the fundamental rights of the citizens of Pakistan, and is a negation of the United Nations Convention Against Corruption (UNCAC) ratified by Pakistan in August 2007.

The NRO has not only damaged the Pakistan image, but and the constraint of the NRO still damaging the credibility of Political Parties is the provision of the National Reconciliation Ordinance – 2007, “No sitting member of Parliament or a provincial assembly shall be arrested without taking into consideration the recommendations of Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics, before which the entire material and evidence shall be placed by the chairman NAB.”

The National Assembly has formed 41 Committees, but since last 17months, the Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics have not been formed, which is harming the image of political parties in general.



Corruption in Punjab, Baluchistan down: Transparency
GEO News August 4, 2009

KARACHI: Corruption in the provinces of Punjab and Baluchistan has declined while it has increased in the provinces of Sindh and NWFP, according to a recent survey conducted by Transparency International.

A press release issued by Transparency International Pakistan (TIP) said that the survey carried out June- July 2009 in the four provinces regarding the citizens’ perception as to the level of corruption in the four provinces.

Compared to 2006, corruption perception in 2009 indicates that Sindh Province had surpassed Punjab Province as the most corrupt province. Corruption in the NWFP has perceived to have increased by 13%, Sindh by 5% while Punjab corruption is perceived to have decreased by 9% and Baluchistan by 10%.

On NRO, TI Pakistan has already said on 7th October 2007 that this ordinance was against the fundamental rights of the citizens of Pakistan, and is a negation of the United Nations Convention Against Corruption (UNCAC) ratified by Pakistan in August 2007.

The NRO has not only damaged the Pakistan image, but and the constraint of the NRO still damaging the credibility of Political Parties is the provision of the National Reconciliation Ordinance – 2007, “No sitting member of Parliament or a provincial assembly shall be arrested without taking into consideration the recommendations of Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics, before which the entire material and evidence shall be placed by the chairman NAB.”

The National Assembly has formed 41 Committees, but since last 17months, the Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics have not been formed, which is harming the image of political parties in general. KARACHI: Corruption in the provinces of Punjab and Baluchistan has declined while it has increased in the provinces of Sindh and NWFP, according to a recent survey conducted by Transparency International Pakistan.

A press release issued by Transparency International Pakistan (TIP) said that the survey carried out June- July 2009 in the four provinces regarding the citizens’ perception as to the level of corruption in the four provinces.

Compared to 2006, corruption perception in 2009 indicates that Sindh Province had surpassed Punjab Province as the most corrupt province. Corruption in the NWFP has perceived to have increased by 13%, Sindh by 5% while Punjab corruption is perceived to have decreased by 9% and Baluchistan by 10%.

On NRO, TI Pakistan has already said on 7th October 2007 that this ordinance was against the fundamental rights of the citizens of Pakistan, and is a negation of the United Nations Convention Against Corruption (UNCAC) ratified by Pakistan in August 2007.

The NRO has not only damaged the Pakistan image, but and the constraint of the NRO still damaging the credibility of Political Parties is the provision of the National Reconciliation Ordinance – 2007, “No sitting member of Parliament or a provincial assembly shall be arrested without taking into consideration the recommendations of Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics, before which the entire material and evidence shall be placed by the chairman NAB.”

The National Assembly has formed 41 Committees, but since last 17months, the Special Parliamentary Committee on Ethics or Special Committee of the Provincial Assembly on Ethics have not been formed, which is harming the image of political parties in general.http://www.southasianow.com/?s=punjab



Scrutiny of contracts: RPPs offer to cooperate with PPRA
Business Recorder August 2, 2009

ISLAMABAD (August 02 2009): Rental Power Producers (RPPs) have offered full co-operation to the Public Procurement Regulatory Authority's (PPRA), that has decided to scrutinise contracts awarded by the government following receipt of information that some circles have shown "suspicion" on the transparency of the awards.

The rental power projects' issue and its implications on government credibility have also been discussed in the Federal Cabinet a couple of days ago on the hue and cry made by the opponents. "We welcome the involvement of PPRA in reviewing contracts awarded by the Pakistan Electric Power Company (Pepco) and PPIB for the setting up of fast-track rental power projects to help Pakistan meet its emergency power requirements," said one of the rental power sponsors who recently held meeting with President Asif Ali Zardari in Islamabad and apprised him of the situation at length.

The policy to set up rental power projects had been validated by three successive governments and contracts had been awarded following the laid down process, said the rental power producers. The tariffs of rental power plants were favourably in line with the tariffs for upcoming IPPs, and rental power plants required only six-eight months in commissioning whereas the IPPs took three-four years, he clarified.

"We are familiar with the achievements of PPRA and remain confident that the nature of the examination will neither be persecutory nor dilatory," he added. "The PPRA will and should review the process and recommend rectifications and corrective measures if and wherever necessary," he said, adding that rental power sponsors would cooperate fully with the organisation to allay any and all concerns.

The rental producers said the deferment of six percent withholding tax was a decision taken by the government and was consonant with other stimulus measures contained in the recently unveiled trade policy. They said that while several rental power projects had previously been delayed on account of Pepco and PPIB, not being able to abide by their contractual obligations on account of the economic difficulties being faced by Pakistan, most rental power plants were expected to be commissioned by end-December.

The announcement by rental power producers comes on the heels of the story broken by Business Recorder that the PPRA is expected to scrutinise PPIB-executed contracts for fast-track rental power projects in Pakistan. Transparency International's Pakistan chapter, in a letter dated July 24, complained to PPRA about the PPIB's non-responsiveness in providing details of rental power contracts it had executed with various local and foreign companies.

TIP has also asked Pepco to provide the detail of rental contracts signed with different investors. Power sector analysts are of the view that 14 percent advance payments and deferment of six percent withholding tax are post-tendering benefits, which may render these tenders suspicious under the procurement rules.



Rental power projects: PPRA to scrutinise PPIB-executed contracts

Business Recorder August 1, 2009

ISLAMABAD (August 01 2009): In a major development, Public Procurement Regulatory Authority (PPRA) has decided to scrutinise the contracts of rental power projects, executed by the Private Power Infrastructure Board (PPIB), mainly because of presence of a negative perception about them at different forums.

Power sector analysts are of the view that 14 percent advance payment and deferment of six percent withholding tax are post-tendering relaxation, which may render these tenders as suspicious under the rules. Some commercial banks are also reportedly resisting the government's pressure with regard to 14 percent advance payment, as several meetings on this issue have so far remained fruitless.

Deputy Director of PPRA Naeem Ahmed wrote a letter to the Water and Power Secretary on July 30, seeking a complete record of rental power contracts for evaluation. Official documents, available with Business Recorder, reveal that the PPIB recently acknowledged that the tariff of rental power plants was higher than the IPPs despite lower efficiency.

According to the documents, tariff for rental power projects are higher by 0.76 cents and 1.63 cents per unit as compared to the IPPs, although they consume more fuel than the IPPs. Basically, Transparency International, Pakistan, wrote a letter to the PPRA on July 24, complaining that the PPIB was not providing to it the details of the contacts of rental power plants.

"It is requested that a copy of evaluation report and contract agreement of rental power procurements made by the PPIB may be furnished to the PPRA at the earliest. This information is being called by the PPRA under power vested in this authority under section 5(2)(i) of the Public Procurement Regulatory Authority Ordinance, 2002," Naeem Ahmad said in the letter.

The TIP, in a letter to the PPIB titled " supply of evaluation report and contract agreement of rental power projects to evaluate the contracts and tariff" had stated that the TIP aimed at building a coherent national integrity system, to institutionalise efforts to curb corruption.

"Rule of law shall be supreme in Pakistan. The ultimate goal of this procurement system is to make corruption a "high risk" and " low return" undertaking said the TIP. According to the PPRA Ordinance 2002 and Public Procurement Rules 2004, all procurements, either buying equipment or renting equipment or products, shall be processed under Public Procurement Rules 2004.

Under the Public Procurement Rules 2004, Rule No 47, these procedures overrules even S.R.O. (I)/2001. The Freedom of Information Act 2002 Article 7 declares all Contracts as the public record:

-- Declaration of public record: Subject to the provision of section 8, the following record of all public bodies is hereby declared to be the public record, namely:

-- Transactions involving acquisition and disposal of properly and expenditure undertaken by a public body in the performance of its duties.

-- Information regarding grant of licences, allotments and other benefits and privileges and contract and agreements made by a public body.

In the letter, Transparency International Pakistan (TIP) requested for the copies of the tender documents containing ToR and GoP terms (in order to confirm that all bidders were provided the information that GoP will pay seven to 14 percent advance payments, as has been reported in the news report), the evaluation criteria evaluation report declared and given to bidders 10 days before award of contract under Rule No 35.

Copy of the integrity pact signed by the bidders and contract agreements, evaluation reports and compliance of Rule No 35 of Public Procurement Rules 2004.

Integrity pact: Procurements, exceeding the prescribed limit (Rs 10 million) shall be subject to an integrity pact, as specified by regulation with the approval of the Federal government, between the procuring agency and the suppliers or contractors.

Announcement of evaluation reports: Procuring agencies shall announce the results of bid evaluation in the form of a report giving justification for acceptance or rejection of bids at least 10 days prior to the award of procurement contract.

Rule 47: Public access and transparency: As soon as a contract has been awarded, the procuring agency shall make all documents related to the evaluation of the bid and award of contract public: "Any violation of any rule of the Public Procurement Rules 2004 may render these contracts as misprocurement under Rule No 50," the TIP maintained.

PPIB Managing Director Fayyaz Elahi briefed the Board recently that it had invited bids through international competitive bidding (ICB) on September 26, 2008 under two packages; (a) package-I (IPP and rental power projects to be commissioned by the end of 2009); (b) package-II (IPP projects to be commissioned by the end of 2010).

Under package-I, no bid was received for IPPs, while under package-II, three bids from the following bidders were received: (a) Engro PowerGen (Pvt) Limited-527 MW net, (b) Reshma Power Generation Limited-137.11 MW net, and (c) Saba -154.07 MW net.

After evaluation of envelope-I (qualification and technical bids), envelope-II (financial and tariff bids) were opened on March 11, 2009. The bid evaluation committee, while presenting the evaluation report, recommended that there was room for reduction in tariffs quoted by the bidders. Hence, the tariff reduction should be negotiated with all the bidders.



Rampant corruption causing collapse of govt organisations
Geo News August 1, 2009

KARACHI: Government decisions, in total disregard to merit, fair play and transparency, based on personal monetary gains for a few individuals in the government have grossly compounded the economic miseries of Pakistan and turned several government organisations into insolvent corporate entities, according to an investigation during which dozens of well-placed and informed sources in the government and corporate sectors were interviewed.

Positioning of several handpicked corrupt and incompetent officials in key appointments at the government-run companies, in many cases without an active approval of Prime Minister Yousuf Raza Gilani, has left a trail of incredible cases of corruption never witnessed before.

Many policy decisions with financial implications in the government-run corporations routinely carry an imprint of a few individuals, who maintained close personal and business ties with some of the most important people in the government between 1997 and 2008.

One of them, who was probed for his most shady commodity deals struck during the last tenure of the PPP government, now appears to be the main motivating factor behind the loss making ventures of Pakistan Steel and the Trading Corporation of Pakistan. His reach now extends to the National Bank of Pakistan, where his former employee now holds a key position.

The consequences of former President Pervez Musharraf’s National Reconciliation Ordinance (NRO) and an absence of a potent anti-corruption organisation in the country seem to have contributed to this fearless unbridled corruption that now plague Pakistan’s economic and business edifice. Following examples illustrate reasons that require an anti-corruption crackdown before it is too late:

Crash of Pakistan Steel Pakistan Steel, a sheet anchor in Pakistan’s infrastructure development, had a reserve of Rs 11 billion and an inventory of products worth at least Rs 6 billion in June 2008.

By the second week of the current month, in space of only 54 weeks, Pakistan Steel has almost turned into a bankrupt state institution with current liabilities of Rs 21 billion.

Most shockingly, the Pakistan Steel management, which opened new annuls of corruption during this period, has already consumed the entire amount of employees’ gratuity and provident funds besides swallowing the earnest money deposited with the organisation by its contractors and suppliers.

Blast furnace, the backbone of Pakistan Steel, is running at 15 percent capacity in the absence of quality iron ore while its main production units of billet mill and billet caster are standing almost idle delivering a negligible output.

Reams of documents are available with this correspondent that prove how this national treasure was plundered through irrational spot purchases of raw material and equipment, grant of freight contracts at the price 20 times more than the running rate, the sale of Pakistan Steel products at an amazingly lower rate than the cost of production in the past one year.

Such was the invisible control of a crony of a government high and mighty in the affairs of Pakistan Steel that his personal office in Clifton became the place where the suppliers and buyers of Pakistan Steel would queue everyday to negotiate any sale or purchase agreement related to Pakistan Steel.

No wonder that three directors left their jobs as Director Finance of Pakistan Steel during these 54 weeks and the organisation is now being run without a functioning director finance and director commercial.

The quantum of corruption at Pakistan Steel was accidentally revealed last week when a major real estate dealer of Dubai met a senior Pakistani security official during a reception in Islamabad and informed him that a senior Pakistan Steel executive had asked him to invest Rs 60 crore in an apartment complex before Dubai property meltdown began in September last year.

PIA faces bankruptcy

Pakistan International Airlines (PIA) is another example where a prime national institution is facing financial and administrative collapse. PIA suffered a loss of Rs 13 billion in the year 2007 that rose dramatically to Rs 40 billion in the year that ended in December 2008.

A member of the board of directors of PIA, while talking confidentially with this correspondent last week, admitted: “PIA’s balance sheet is a fit case to declare bankruptcy and shut the company down.”

He went on to predict: “With these losses and present number of employees, PIA will not be able to make any profit in the next 50 years at least.”

While the company is struggling to run its day-to-day financial affairs with half-a-dozen of its aircraft grounded just last week, PIA’s Managing Director Captain Ejaz Haroon, another personal friend of government high and mighty, came up with an idea of Rs 160 billion purchase of new aircraft for the airline.

Haroon met the PIA board members in June last to break the news of this mammoth purchase and desired that his early negotiations with the Airbus industry and Boeing to buy 27 narrow body aircraft be kept “secret” from PIA shareholders and, of course, the media.

Ignoring the fact that the airline was not able to foot its most essential bills, Captain Ejaz Haroon revealed that he had an understanding from “someone” in the government that the Government of Pakistan could provide a sovereign guarantee (another US$2 billion in national debt) if the Ex-Imp Bank and a major European bank were ready to lend PIA US$2 billion for this ambitious purchase.

Both Boeing in America and Airbus in France are facing an immense financial crunch and are seeking clients like PIA to keep their operations going.

Although, international prices had some contribution in tripling PIA’s losses for the year 2008, but the situation worsened, as documents available with this correspondent revealed, following a long trail of gross irregularities in purchases such as Rs30 crore worth of Zamzam water for Hajis at the cost of Rs 450 per can, a price around five times more than the previous purchases of Zam Zam water by the PIA.

Manipulations of ticket sales and cargo handling through travel agents in Pakistan and abroad left PIA with more losses that run into tens of crores of rupees.

PIA’s woes are aggravating as the management appointed on political reasons continues to oblige their masters by letting the PIA’s payroll to swell. While facing a record financial crunch and ever rising losses last year, PIA managing director obliged the PPP government by inducting 6,000 workers in the airline, which already had the highest employees per aircraft ratio in the world.

By adding 6,000 persons to its list of permanent employees, the PIA set a unique example in the airline industry worldwide because that was the period when even the most profit making airlines of the world were either laying off their staff or negotiating salary cut agreements with its employees.

“This was the last nail in PIA’s coffin,” said a member of the PIA Board of Directors, who had vigorously opposed the idea of fresh induction into the airline.

Merit has no play in either postings or transfers or even roster setting for flight crews in the airline but the worst display of flouting of transparency, rules and regulations was displayed when the PIA decided to induct fresh air hostesses a few weeks ago and inducted 12 air hostesses at the recommendation of PPP office-bearers of interior Sindh.

In total disregard to discipline and fair play, some of the employees who were thrown out of PIA on criminal charges were graciously reemployed and offered foreign postings.

TCP jolt exchequer

Unprecedented and fearless corruption plagued the Trading Corporation of Pakistan (TCP) and with it the national exchequer as the country lost billions of rupees when an influential federal minister, along with the same friend of the government high and mighty, manoeuvred the appointment of an income tax officer as the TCP chairman in the second half of last year.

This appointment preceded a well-hatched strategy to plunder the government’s trading activity such as procurement of fertilisers, sugar and wheat from international market and a blatant attempt to re-nationalise export of rice from Pakistan by procuring rice locally at an inflated price.

Simultaneously, the new handpicked chairman introduced non-transparent procedures, mostly through backroom deals, to import commodities and their shipping at grossly inflated rates and these imports were timed as such that the local markets could also be played for maximum profits.

To further maximise the profits to the loss of Pakistani national exchequer, new contracts to handle cargo (stevedoring) at ports were awarded at a price that was often thrice the price paid by the TCP for the similar job in the previous year.

Inland transportation agreements with private transporters were so lucrative that they some time hired the government’s own National Logistics Cell (NLC), which incidentally failed to win the TCP work, for transportation of commodities from ports to destinations all over the country.

“These contracts were so lucrative that the favoured contractors some times outsourced their work and still made hefty profits notwithstanding the profit they shared with the TCP top management and their masters,” a well-informed TCP source said.

The situation took such a serious turn last year that Prime Minister Gilani had to intervene to stop the TCP, aided by a friend of high and mighty also the central figure in Pakistan Steel corruption, from an attempted informal re-nationalisation of the rice export from Pakistan by procuring rice from the local market at an inflated price.

“The rice operation alone cost the country about Rs 3 billion,” according to a TCP insider. But several TCP sources confirmed that an estimated loss of about Rs 20 billion was caused to the national exchequer by engineering ill-conceived, non-transparent import of Urea in the country last year.

The TCP sources pointed that the race to make quick money was so fast early this year that the TCP chairman routinely ignored objections of Transparency International Pakistan and parliamentary committees in awarding contracts to handpicked that had formed a cartel to monopolise the TCP work in blatant contravention to the government rules governed under the PPRA.

The corrupt TCP management apparently hit a jackpot when the government instructed the TCP to energise the Gwadar Port by ordering some commodity imports at the new port.

“A cursory examination of cargo handling contracts awarded for wheat imports at the Gwader Port will show that sums allowed for the work was five times more than the market price,” a knowledgeable TCP source said, while giving documentary evidence of incredibly low offers that were available to the TCP for the same job.

The stocks available with the TCP and import orders were manoeuvred with the sole idea of benefiting the vested interest with no remorse for the suffering of population. That’s why people of Pakistan are these days forced to buy sugar at an all-time record high price of about Rs 50 per kg. This price situation on sugar would run well into the month of Ramazan.

As the pie of corruption keeps expanding, so was the greed of the top TCP official and his masters until April this year when Minister for Commerce Makhdoom Amin Fahim in consultation with the prime minister decidedly removed the TCP chairman but without ordering probe into his actions.

National Bank jolted

The National Bank of Pakistan (NBP) is another national institution facing doubts about its health and deals concerning government linked individuals, companies and projects.

“On the face of it, the National Bank of Pakistan is seen as financing government backed projects or troubled public sector entities but at the back influential, politically-linked individuals and contracts benefit from this financing,” said an informed NBP official.

For example, a recent decision by the NBP-led consortium to provide an emergency financing of Rs 10 billion to corruption ridden Pakistan Steel may eventually benefit private individuals who are calling shots in Pak Steel affairs from their private office.

The National Bank’s role and interest in enhancing its exposure and affairs of some sugar mills of Sindh and their links with powerful political individuals has left many questions unanswered.

The NBP, which also serves as the treasury for Government of Pakistan, is being curiously watched for its role and growing interest in controversial rental power plants scheme of the government.

The bank, it seems, is ready to take a big exposure in the scheme and had already agreed to finance at least two of the projects.

A whopping Rs 21 billion worth rental power projects have already run into controversy because of the government’s mysterious inability to fully utilise the already-installed electricity generation capacity in Pakistan and armtwisting of other Pakistani banks to finance the shady scheme.

It remained no secret that all top bankers of the country were summoned to the State Bank of Pakistan head office in Karachi early this month. There they had taken the impression that they had no choice but to finance the rental power scheme.

Port Qasim sinks

The Port Qasim Authority (PQA) is a prime example of influence peddling by politically-linked people in getting posted to lucrative positions. A few weeks ago, an intense controversy swirled around Afsar Talpur who was made PQA’s acting chairman. The port authority was already in the middle of charges regarding illegal allotment of land and huge corruption in contracts on port related work.

As it surfaced that the acting chairman, already an official at the PQA, was himself at the centre of many of the charges, the top offices of the government were told that though posted on the orders of the elderly father of an influential personality, the case may create a major embarrassment for the government.

For several days, in the month of May this year, several directors jockeyed for lucrative assignments as the alleged corrupt acting chairman was asked to resume his previous assignment. An intense battle to win the most lucrative positions at the port authority continues to date.

But there was no substantial inquiry to probe the charges involving the allotment of Port Qasim lands through non-transparent procedures and into questionable contracts that have the Port Qasim as one of the most “lucrative” government departments.

A senior government official, however, termed the reports about the malpractices in Pakistan Steel, PIA, TCP, NBP and Port Qasim a mere propaganda. He said such kind of information was totally wrong and politically motivated. He said opponents of the present government were out to level allegations against the present set-up without any foundation. He said in all the above mentioned organisations, merit was followed as part of the government policy. However, detractors of the government continue to raise baseless objections.



Procurement rules: TIP wants Punjab to consider proposals
Dawn July 25, 2009

RAWALPINDI, July 25: The Transparency International Pakistan (TIP) has forwarded a set of proposals to the Punjab government for consideration in the upcoming public procurement rules for 2009 currently being drafted by the provincial government.

The Punjab government has assured the TIP that its proposals would be considered in the new law which it was drafting in order to introduce a fair and transparent public procurement regime to ensure efficiency and accountability.

Punjab Chief Minister Mian Shahbaz Sharif has himself responded to the TIP and in his reply he stated that the proposed amendments would remove most of the structural lacunae in the existing law.

The TIP has suggested that the Punjab government should use the standard bidding document of Pakistan Engineering Council (PEC), World Bank and the Asian Development Bank till the Punjab Public Procurement Regulatory Authority (PPRA) issues its own standards.

Other proposals include definition of corrupt and fraudulent practices; provision of lifecycle cost evaluation criteria for goods; signing of no bribery pact and declaration of agent’s agreement; evaluation report to be provided to bidders 15 days before awarding the contract for filing objections and also to be posted on procuring agency’s website and the system of scores awarded to bidders.

It suggested publication of contract agreement, including rates, and evaluation report on the website after the award of contract. This rule amounts to complete transparency, thereby eliminating corruption from the procurement process.

The contract for supply, works and consultants should be awarded only to the lowest responsive evaluated bidder, the TIP said.


The stigma of high corruption
Business Recorder July 25, 2009

EDITORIAL (July 25 2009): Productive in many ways was the Seminar on the private sector's compromise with corrupt practices, which was jointly organised by Transparency International Pakistan (TIP) and the Site Association of Industry (SAI) in Karachi, on Tuesday. Speaking on the occasion, Federal Tax Ombudsman (FTO) Dr Shoaib Suddle rightly stressed the need for the simplification and reform of tax laws.

As it was, the event appeared to have brought to the fore, once again, the rather subdued urges, not only of the businessmen, but also of many others from the various other segments of civil society. For, although the FTO as an institution, had distinguished itself for many an instance of timely relief, accorded to harassed taxpayers in various parts of the country since its creation, it had also exposed the overbearing nature of the behaviour of taxation officials.

Be that as it may, the manner in which the FTO has disposed of the cases brought before it, has made some dent in the flawed functioning of the taxation system. This certainly will be seen to have been made possible by its unmistakable approach in diagnosing the ills, investigating, redressing and also rectifying the injustice rampant in the Customs, Sales Tax, Central Excise and Income Tax departments. Owing to its efficacy and the dedication of this institution in Pakistan, India too, unhesitatingly, decided to emulate. Pakistan can certainly take legitimate pride in this, while determinedly, making all possible efforts to wipe the stigma of rampant corruption.


Rabbani demands probe into KESC privatisation: Senate witnessed stormy scenes
Business Recorder July 25, 2009

ISLAMABAD ( 2009-07-25 04:50:55 ) :The Senate on Friday witnessed some stormy scenes when Senator Raza Rabbani of Pakistan People's Party (PPP) lost temper over the worsening power load shedding in Karachi and bitterly criticised former president Pervez Musharraf and ex-prime minister Shaukat Aziz over this state of the affairs.

The treasury senators gave standing ovation to Rabbani by thumping desks, shouting full-throated anti-Musharraf-Aziz slogans, blaming the duo for the privatisation of Karachi Electric Supply Company (KESC) and demanding of the government to deal them with iron hand.

Raza Rabbani, in a hard hitting speech at a point of order drubbed those holding the reins of power for failing to finalise the re-nationalisation of KESC and demanded of the government to constitute an inquiry commission to probe into the privatisation of KESC.

He said by privatising KESC, the previous regime, particularly, former prime minister Shaukat Aziz pushed the city of Karachi into darkness through regular power outages, which brought the industrial wheel to nearly complete halt. He reiterated his previous demand of nationalising the KESC, accusing its private management of having failed to streamline the affairs of the corporation thus producing power less than its capacity. "The government should immediately ask Nepra as a regulator to nationalise KESC as it has failed to perform according to standards set by it and appoint an operator," he maintained.

Rabbani said, "Following are the main reasons for which the KESC failed to perform: The service quality and the systems under new management are going down; the total quantum of electricity generated by the KESC is on the decline; no new investment into KESC or the system is made (in violation of the sale deed); at the time of privatisation, it was promised that the management will invest $361 million to improve the system which till date has not been done and the government has written off Rs 40 to 50 billion and yet the KESC has failed to perform."

He said the privatisation of KESC was just meant to cripple the industrial sector in Karachi and create monopoly of multinational companies instead. Speaking at a point of order, leader of opposition Wasim Sajjad asked the government to give a timeframe when the people would get rid of load shedding.

"It has not only affected the life of a common man but has also damaged the business, agriculture and industries to a point of no return," he added. The government should pay the circular debt of IPPs and focus on building more water reservoirs, he said, adding that the nuclear power plants should also be set up to resolve the power issue once for all.

Tahir Hussain Mashhadi of MQM said the government should pay back circular debt to IPPs as rental power stations would in no way benefit the country due to their high prices. Without re-nationalising KESC, he added, the economic condition of the country would not improve as the industrial units in Karachi were facing closure due to power shortage.


Judiciary must be fully independent: SHC Chief Justice
Business Recorder July 25, 2009

KARACHI (July 25 2009): For the rule of law the judiciary shall be fully independent and there should be no discretion in any administrative decision taken by the government servants. This was stated by Chief Justice of Sindh High Court (SHC), Anwar Zaheer Jamali, while talking to a delegation of Transparency International Pakistan (TIP) which called on him on Thursday.

The delegation, comprising TIP Chairman Syed Adil Gilani and Advocate Nazia Butt, Deputy Project Co-ordinator of ALAC, also met Justice Mushir Alam, the senior most judge of SHC. On the occasion the TIP chief presented a copy of the National Corruption Perception Survey 2009 to the judges besides felicitating the CJ on reducing corruption remarkably in judiciary from November 3, 2006 to 7th in 2009.

According to a press release issued by TIP here on Friday, the role of judiciary with highest integrity was emphasised by the CJ. The TIP delegation was informed on the measures taken by the CJ like suspension of five judges of the District Courts last week on the grounds of corruption and appointment of financial expert four months ago in SHC, who was professionally controlling the finances in transparent manner, which had resulted in monthly savings of over Rs 10 million.

Another matter discussed was that of the appointment of a Registrar of the Sindh High Court. The Chief Justice briefed the TIP delegation that the said appointment was posting a highly professional and senior officer of outstanding integrity, as the post requires unbiased treatment to all cases, and was purely an administrative decision taken by Sindh High Court. The selection was made by a committee of five judges of SHC headed by the CJ.

Another pressing matter discussed was that of appointing the judges at various levels of district courts based totally on merit. In order to eliminate the avenues of 'test paper leaking', the Chief Justice himself prepared the examination paper the night the test to be held, carbon copy of the answer papers kept with the office administering the test to prevent 'over writing', and declaration of results within 72 hours. These measures guarantee that all candidates were offered the same chance to succeed.

Furthermore, quotas would be set for the appointment of magistrates from different localities and the highest scoring 100 candidates shall be offered positions within the judiciary. Currently there were over 800 applications for 80 civil judges' vacancies (10 out of which are for DJ's and 70 of which are for ADJ's).

TIP delegation appreciated the measures taken by the SHC, and proposed to the Chief Justice to preside over a seminar to be held by the TIP on 16th August 2009 on the Judicial Policy announced on 16th May 2009, and effective measures to have Rule of Law based on merit in Pakistan. The Chief Justice, Anwar Zaheer Jamali appreciated TI Pakistan's efforts to enhance awareness against corruption, and its endeavours to have good governance measures in place. The CJ agreed to preside the seminar proposed by TIP.-PR


Efforts to curb corruption urged
The Financial Daily July 22, 2009

KARACHI: Federal Tax Ombudsman (FTO) Dr Shoaib Suddle said an out of the box solution is needed with transparent checks and balances to get rid of the rampant corruption. He said this while speaking as chief guest in the seminar on "Why Private Sector Compromise on corrupt practices" jointly organised by The Transparency International Pakistan (TIP) and Site Association of Industry (SAI) held at a local hotel on Tuesday.

"It is a gigantic and tough job with a long road to travel but I am confident that with the guidance and proposals of stakeholders we can reach to our destination", Dr Suddle remarked.

He said that to eliminate corruption we have to severely punish few big fish in order to make them an example for the rest of the society. He said that we also need to encourage the honest individuals to make them as role model to be followed by others.

Earlier, in his opening remarks President TIP Syed Adil Gilani said that Transparency International Pakistan is fighting corruption with progress in achieving success so far and urged FTO to look into the cases of over 5 years of the tax departments.

During the seminar member customs FBR Muneer Qureshi provided the details about the efforts to make it transparent and viable. Advisor to Sindh Chief Minister on Investment Mohammed Zubair Motiwala in his address said that present laws with discretionary powers of bureaucracy are the main reason of rampant corruption.

Chairman All Pakistan Textile Processing Mills Association (APTPMA) Nisar Shaikhani highlighted the flaws in the tax laws which are the main reason of manipulating corruption.

President Pakistan Tax Bar Association Abdul Qadir Memon on the occasion urged that the tax reforms process undertaken by FBR should continue to make the tax system transparent.


FTO for simplifying, reforming of tax laws
Business Recorder July 22, 2009

KARACHI (July 22 2009): Federal Tax Ombudsman, Dr Muhammad Shoaib Suddle has emphasised the need of simplifying and reform of tax laws. Speaking at seminar on "why private sector compromises on corrupt practices" organised jointly by Transparency International- Pakistan (TIP) and Site Association of Industry (SAI) on Tuesday, he advised business community to point out ambiguities in law so that they should be examined and sent for consideration of authorities with due recommendations.

He said that the laws should be made in a way that every one should understand them." There is lot of insensitivity in officers handling tax matters", he added. He also sought suggestion for making Federal Tax Ombudsman organisation more effective.

Referring to corruption, he said that corruption is there wherever bureaucrats have also excessive discretionary power. Discretionary power should be minimised, he added. Shoaib Suddle said besides TIP, World Bank, and United Nations also publish reports on corruption in Pakistan.

He said that TIP in its national corruption perception survey 2009 noted that corruption in the country has surged by whopping 400 percent in the last three years. The ombudsman recalled that some years ago Pakistan was ranked as second most corrupt country of the world. Corruption prevails in federal, Provincial and other agencies of Pakistan.

He said that white collar crime is ten times more than any other crime prevailing in the country. Shoaib Suddle said that in white collar crime, just manipulating an SRO could involve billions of rupees. He was of the opinion that big fish should be punished more than the small pay.

He said that there is no country in the world where corruption is not prevailing in one form or the other. He said that in India some organisations carried out a survey of corruption in various government departments and published name of most corrupt officers. Such practices should be adopted in Pakistan, he emphasised.

About implementation of law in its true sense, he sited example of a judge in USA and said that the judge was returning home after spending holidays and carrying one more bottle of wine than permitted limit. The customs officers stopped him and examined his luggage and found the bottle and prosecuted him. The judge tenders his resignation next day.

He said corruption can only be eradicated when law is implemented in its true sense and no body is spared even if he is a judge, minister, MNA, MPA prime minister or Ombudsman. Member Customs, Federal Board of Revenue (FBR), Munir Qureshi said corruption has become a way of life in Pakistan.

He said that accountability should be started from highest level. Misinterpretation of law and tax evasion culture, over regulated economy, easy availability of funds and discriminatory power are some of the reason of corruption. Chairman, Site Association of Industry (SAI), M.A. Jabbar emphasised the need of separating tax judiciary from administration. He said that tax law should be simplified in a way that every one should be able to understand them.

He said that people are afraid of coming in tax net due to complicated law. Chairman, All Pakistan Textiles Processing Mills Association (APTPMA), Nisar Sheikhani termed that low salaries, discriminatory power, lack of checks and balances, are some of the reasons of corruption in government departments.

Advisor to Chief Minister Sindh on Investment, Zubair Motiwala estimated that around Rs 3 billion tax embezzlement occurred due to ongoing under invoicing from China. He said that Afghan Transit Trade is one of the biggest source of smuggling in the country which renders local products non-competitive in local as well as in international markets. He said Pakistan has to seek the agreement of 44 land locked countries to draft new transit trade agreement with Afghanistan. He emphasised the need to bring reforms in tax laws.

He termed NEPRA and OGRA as white elephants and stressed that these organisation must be revamped. Motiwala said that making changes in law for improvement is most difficult job as bureaucrats did not like reforms and they always create hurdles

He said that the government has saved Rs 21 billion after zero rating textile sectors. Chairman TIP, Syed Adil Gilani quoting TIP survey and said that corruption has increased by 400 percent in last three years in the country. He said that he would like the tax ombudsman to investigate cases of those companies which have been subjected to total audit in all past 5 years.


Bureaucratic set up main hurdle in eradicating corruption
The News July 17, 2009

Judges, lawyers and participants of a seminar said that the bureaucratic set up in the country and an expensive judicial system are the main hurdles in eradicating corruption from the country the seminar on “Advocacy and Legal Advice Centre” was organized by Transparency International Pakistan (TI) at a local hotel on Thursday. Former tax ombudsman Justice (Retd) Salim Akhtar, former ombudsman Justice (Retd) Haziqual Khairi, senior lawyers Sohail Muzaffar and Amarnath Motumal read out papers while prominent citizens attended the seminar Speakers suggested that protection of victims of corruption was the basic requirement and there was a need for legislation in this regard. Justice (Retd) akhtar stressed the importance of the rule of law and accountability and was of the view that democracy would be meaningless without accountability. He said that corruption had spread to such an extent that international financial institutions in their agreements with developing nations incorporated safety clauses against corruption.

Justice Khairi, who served as federal ombudsman, said that the institution of ombudsman both in the centre and provinces was very friendly for the poor in providing relief and justice to them. He said that poor people could complain to the Ombudsman without any fee and charges. This would strengthen this institution and would be helpful in eradicating corruption. He said that bureaucracy misguided the president and governor, and created the impression that this institution was creating problems for the government.

Sohail Muzaffar, a trustee of the TI, said that the Advocacy and Legal Advice Centre wanted to empower citizens to make and pursue corruption-related complaints, for which legal advice and assistance would be provided to the poor. Motumal Advocate said that the court must take suo motu action in resolving problems of the people, including transport, price hike, housing and encroachments, and draw the attention of the government towards these problems.

During the question and answer session, participants pointed out problematic areas in eradicating corruption from society and complained that people generally avoid lodging complaints as they felt that there will be no protection accorded to them if they lodge a complaint against corrupt authorities.


Call for Sweden-like 'parliamentary' form of ombudsman system
Business Recorder July 17, 2009

KARACHI (July 17 2009): Urging the bar associations to also raise voice in favour of public interest, a group of former judges and lawyers at a seminar, held here at a local hotel Thursday, called for a Sweden-like poor-friendly "parliamentary" form of ombudsman system to maintain rule of law in the corruption-hit country.

The speakers at "Advocacy and Legal Advice Centre" (ALAC), organised by Transparency International-Pakistan (TIP), also blasted the successive governments and bureaucracy for denying the judiciary freedom of work in the best interest of justice.

The speakers included former Justice Salim Akhtar, former Justice Haziqul Khairi, Advocate Sohail Muzaffar, Advocate Amaranth Motumal and Saad Rashid of TIP. The seminar was also told that ALAC, which was launched by TIP in March this year to provide legal assistance to the common man, had received a lukewarm response from the masses, as since its inception the Centre had received only 12 to 13 complaints.

The speakers declared that all assurances of the judiciary to the general public were based on "falsehood" and no concrete work was being undertaken, neither now nor in future. "The President and Governor (the two executives to whom the federal and provincial ombudsmen are respectively responsible) are flanked by a strong bureaucracy, who mislead them about the just decisions of ombudsmen," claimed former Justice Haziqul Khairi, former Ombudsman of Sindh and Chief Justice of Federal Shariat Court (FSC).

Referring to Sweden, where the ombudsmen are appointed by the parliament and not by the President and Governor, the retired judge said decisions of the two executives should be made subject to the scrutiny of Supreme Court. "The supreme and high courts should strengthen and patronise these institutions," he said.

The TIP's trustee was also positive when asked whether the institution of ombudsman should be made independent of the executives and proposed that the ombudsman, who according to Khairi is aptly called as the poor man's court, should be answerable only to the parliament.

Highlighting significance of FSC, he stressed the need to formulate procedures for the appointment of "Aalim" (religious scholar) judges to the Shariat Courts instead of letting it on the sole discretion of executives. He also criticised the government for its "derogatory" treatment towards the judges of FSC, where the Chief Justice, unlike his counterparts in supreme and high courts, was not more than a "silent spectator" to a game of musical chairs in the appointment of judges in his court.

Terming democracy sans accountability as "meaningless", Justice (R) Salim Akhtar, Honorary Director General Supreme Judicial Academy, stressed the importance of rule of law and accountability in the country. He said the corruption had spread to such an extent that international financial institutions, like the World Bank, in their agreements with developing nations were incorporating safety clauses against corruption.

Sohail Muzaffar, Advocate of Supreme Court and a TIP's trustee, underlining the achievements of ALAC said the progress of centre was unfortunately slow in Pakistan, where the NGOs were uncooperative and the people expect legal advice only from the courts."We had invited a number of NGOs (to this seminar) but we can see one or two of them only," he lamented.

Later, Nazia Butt, ALAC's Deputy Project Co-ordinator, toldBusiness Recorder that since March 2009 the Centre had received only 12 to 13 complaints, of which at least seven were from Karachi. Amarnath Motumal, Advocate High Court and Member Human Rights Commission of Pakistan (HRCP), terming the lawyers movement based on "self-interest" urged the bars to voice against the government's highhandedness towards masses.

"I dare to say that the bars acted in self interest as an achievement for the bench is achievement for the bar... the bars and bench is inseparable," he said adding that "where are those bars of districts, supreme courts, high courts and the NGOs? Why don't they challenge the government's anti-people measures like carbon tax in the courts".

Talking on "Human Rights and Legal Aid" Motumal stressed the need to address the infringement of human rights, which, he said, in turn would affect corruption. The speakers proposed measures, like social boycott of the corrupt people, regeneration of the country's morals through brainstorming, rebuilding of the nation etc to rid the country of corruption.

Earlier, during his introductory speech Executive Director of TIP Saad Rashid described efforts of the international watchdog to fight corruption in Pakistan. Engineer M.A Jabber, Chairman Site Association of Industries, lauding efforts of the retired judges and lawyers presented plaques to them that winded up the seminar.


KESC privatisation: PC refuses public disclosure
Business Recorder July 8, 2009

ISLAMABAD (July 08 2009): The Privatisation Commission (PC) is reported to have refused to make public the deal to sell Karachi Electric Supply Corporation (KESC), with the argument that public disclosure may result in complications in future transactions, especially in the power sector, according to official documents available with Business Recorder.

Transparency International Pakistan (TIP) had asked for various documents/contract agreement and evaluation report regarding the transaction of KESC. "The requested documents are very sensitive in nature, and their public disclosure may result in complications for further transactions, specially those in power sector, as a number of power sector companies are on active privatisation list at this point of time," sources quoted the PC as saying.

Officials in the PC are of the view that Regulation 3, 2003 of the Privatisation Commission (confidentiality and secrecy of documents) "allows treating certain documents (including "all assignments, deeds executed during the course of privatisation including sale agreements, sale or conveyance deeds, financial advisory agreements") as confidential.

According to documents, the PC has also sought advice of the Ministry of Law and Justice regarding the relevance of Public Procurement Rules 2004 in respect of the documents requested by Transparency International Pakistan. The PC is of the view that the regulations mentioned above allow it not to provide the documents requested by TIP.

The documents further show that Ministry of Law and Justice, in its comments, stated that the case may be taken up with Public Procurement Regulatory Authority (PPRA) for approving documents for withholding the same from public disclosure.

The Ministry of Law and Justice, in its comments, clarified that Rule 47 of the Public Procurement Rules 2000, having been made under section 26 of the Public Procurement Regulatory Authority Ordinance 2002 (XXII of 2002) provides for public access and transparency regarding contracts awarded by a procurement agency. Rule 47 ibid reads as follows: "47.

Public access and transparency. As soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of contract public: Provided that where the disclosure of any information related to the award of a contract is of proprietary nature or where the procuring agency is convinced that such disclosure shall be against the public interest, it can withhold only such information from public disclosure subject to the prior approval of the Authority".

The Privatisation Commission (Transparency and Secrecy of Documents) Regulations, 2002, by invoking the provisions of section 41 of the Privatisation Commission Ordinance 200 (LII of 2000), and under Regulation 3 enumerates the documents that are considered confidential: clause (g) ibid says that agreements, deeds executed during the course of privatisation included the sale agreement, sale and conveyance financial advisory agreement are confidential documents.

The proviso to Rule 47 supra clearly allows for non disclosure of any information related to award of a contract where the procurement agency is convinced that its disclosure shall be against public interest and it can withdraw any such information from public disclosure subject to approval of the Procurement Regulatory Authority.

Therefore, the object can be achieved by requesting the authority to approve the documents mentioned in regulation 3 of the aforesaid Regulations for withholding the same from public disclosure as provided in the proviso to rule 47 ibid.

In response to the letter sent by Transparency International Pakistan in connection with National Corruption Perception Survey (NCPS) 2009, with the objective of informing the public as to how many organisations are following procurement law, TI Pakistan has received contract agreement and evaluation reports from most of the organisations. A number of organisations like Ministry of Health, PQA, Pakistan Steel, KPT, etc, are posting or are in the process of posting their contracts and evaluation reports on the websites.

However, the PC is not posting the contract agreement and evaluation reports on the website, and has also not supplied the documents to TI Pakistan. This information was requested by TI Pakistan in March 2009, the documents further disclose. According to an insider in the PC, PPRA has also asked the PC not to make confidential documents public.


Body set up to finalise Public Procurement Rules for Punjab
Business Recorder July 7, 2009

KARACHI (July 07 2009): A high powered committee has been formed by the Government of Punjab to finalise Public Procurement Rules (PPR) 2009 for the province with input from PPR 2004 which eliminates all discretions in procurement process.

The decision was taken at a meeting held in Lahore on July 4 between the Chairman of Transparency International, Pakistan, (TIP), Adil Gilani, and Punjab Chief Minister Shahbaz Sharif, Chief Secretary Punjab, and Principal Secretary to Chief Minister, Punjab, Managing Director, Public Procurement Regulatory Authority (PPRA), Punjab, and Joint Secretary Minister of Law. The Chief Minister had summoned the meeting following a letter written to him by Syed Adil Gilani proposing to set up e-Complaint Centre at Chief Minister's Secretariat. TIP has been made member of the committee which shall finalise the rules.

Other decisions included:

-- To ensure that complaint centres of Punjab government in all local government offices are in operation.

-- The system will be inspected by TIP for transparency and efficient working.

-- TIP will give a report, and suggestions, if any improvements are required.

-- Chief Minister Punjab agreed that TIP will monitor the complaint centres and code for all the complaint centres.

-- All decisions and monitoring will be time based to avoid delays, and a monthly report of performance of each complaint centre will be prepared by TIP and sent to Chief Minister Punjab.

TIP in its letter had explained to the Chief Minister Punjab that its recommendations would enable Punjab government to save at least 15 percent of the development budget of Rs 160 billion for FY 2008-2009, which will be Rs 24 billion, and all contracts would be awarded to the lowest evaluated responsive bidders within maximum time frame of 28 days from the date of opening of tenders. In response to this suggestion, which was made on June 24 by TIP, it was agreed that Punjab PPRA will adopt PPR 2004 immediately.

According to TIP the setting up of e-Complaint Centre at Chief Minister Secretariat would enable easy and free access to all citizens of Punjab for lodging genuine complaints by either internet, or phone or personally. The complainant will get a complaint number and he himself will be able to track the progress on internet. The Secretariat would be able to monitor the progress directly and the system of accountability and efficiency of public officials would enable fulfillment of PML (N) priority item of its manifesto, to address public grievances in the most efficient manner.

TIP has developed the necessary software for e-Complaint based on the SQL open source platform for the City District Government Rawalpindi (CDGR). This complaint centre has been developed under the 'OPEN' system or Online Procedures Enhancement (OPE) for civil applications to achieve transparency in the city administration by reducing unnecessary delays or prevent unjust handling of civil affairs.

The web based OPEN system allows -citizens to keep an eye on how applications are dealt with, especially in the area where irregularities are most likely to occur. The Government of Sindh had adopted the PPRA, Public Procurement Rules 2004 from November 1, 2006 to improve transparency in procurement of goods, services and consultancies.

Accordingly, guidelines were issued for strict compliance by all departments/attached departments, autonomous semi-autonomous bodies, all offices and subordinate offices of the Sindh government, district governments/TMAs/UCs and all establishments associated with the Government of Sindh. PPR 2004 has eliminated all discretions in procurement process. The vital rules which have incorporated checks and balances in discretion-free procurement system are:

-- Standardisation of procurement process and tender documents, advertise all prequalification or tenders over Rs 100,000 thousand on procuring agency website as well as on the website of Government of Sindh and in at least one English and one Urdu national daily minimum 15 days in advance.

-- Provide prequalification and tender documents to bidders which shall include all relevant information, including the detailed evaluation criteria, bid award method, signing of integrity pact, rights of bidders for complain on evaluation report prior to award, standard conditions of contract, specifications which shall allow the widest possible competition and shall not favour any single contractor or supplier nor put others at a disadvantage, and elimination of culture of gallop/short tender etc.

-- Announcement of the results of bid evaluation in the form of a report giving justification for acceptance or rejection of bids at least 10 days prior to the award of procurement contract, and bidders are allowed to submit their comments/objections within 15 days, and no negotiations with the bidder having submitted the lowest evaluated responsive bid or with any other bidder.

-- Finalising of the evaluation report after examining all complaints.

-- Award of all contracts to consultants, contractors and suppliers only to the responsive lowest evaluated bidder.

-- PEC procedure to award consultancy contract to top ranking bidder eliminated.

-- The evaluation report and contract agreement to be made public (on website) after the award of contract. Procurement is the engineering term for all purchases, supplies, tendering of construction works, turnkey projects and consultancy services. PPRA definition of contractor as contained in Public Procurement Rules 2004 clarifies this in more appropriate manner; "contractor" means a person, consultant, firm, company or an organisation who undertakes to supply goods, services or works.


Institutional decline in Pakistan
Business Recorder June 28, 2009

EDITORIAL (June 28 2009): Transparency International Pakistan (TIP) has voiced deep concern over Pakistan's accountability institutions being almost on the verge of collapse, and has called for improved enforcement of Public Procurement Regulatory Rules and effective working of Public Procurement Regularity Authority (PPRA) to combat corruption in public sector spending.

TIP chairman Syed Adil Gilani, speaking at the annual members' meeting at a Karachi hotel, disclosed that TIP has been trying to sell the idea of PPRR for adoption by provincial governments, and has also been pressing for the establishment of PPRAs in all the provinces to fight corruption. Utilisation of the huge PSDP and other budgetary allocations made by the governments in development and non-development spheres, need to be regulated through a transparent mechanism for the procurement of goods and services.

Elahi Baksh Soomro, a former Speaker of the National Assembly, while speaking on the occasion has claimed that corruption in Pakistani politics emerged in the wake of the 1958 martial law and prior to that, no Pakistani Prime Minister was corrupt. According to him, martial laws and military regimes have, in fact, laid the foundations of corruption in the country, because they had to pick up politicians to become what he called their "front men," with a view to gaining legitimacy.

Soomro has rightly observed that the cancer of corruption could be combated only through good governance. Arshad Zuberi, TIP trustee, said that TIP must seek the support of parliamentarians for the implementation of public procurement rules, and also convince them for the establishment of accountability bodies.

Exemptions are justified in exceptional cases where secrecy has to be observed. However, exempting Wapda and the Ministry of Defence from engaging in commercial activities might not be justified. Engr. M.A. Jabbar, chairman of SITE said the present taxation system negates the spirit of the Constitution, which requires the executive to be separated from the judiciary.

But in taxation, the prosecutor is also the adjudicator, and the Finance Bill presented by Minister of State for Finance and Economic Affairs Hina Rabbani Khar manifests the worst examples of amendments, whereby judicial forums are being tamed by the executive machinery. Whatever its causes and motivations, corruption and embezzlement in the public and private sectors, in its myriad forms and guises, including "commission" (which has since gained respectability), has come to be almost accepted as a way of life in the country, which is very unfortunate.

There is a need to distinguish between bureaucratic corruption, which can be likened to only a "small change" as compared to the perceived mega corruption in the higher echelons of power. The TIP meeting in Karachi seems to have focused on bureaucratic corruption, which, incidentally, is a result of the institutional decline occasioned by bouts of non-representative rule in our country, though the so-called representative dispensations have, at times, been no less guilty of pursuing questionable agendas at the cost of the long-term interests of the country.

Almost every government in Pakistan, whether representative or non-representative, has claimed "accountability" and the provision of prompt and inexpensive justice as its major goal, and has used the dragnet to catch the corrupt elements, though they have mostly succeeded in netting only the small fish. Secondly, the first target of all non-representative governments in the country, as elsewhere in the Third World, has been the Constitution, which lays down parameters for the functioning of state institutions, and also regulates the conduct of holders of public office.

There have been instances where even the elected holders of public office committed gross legal and constitutional transgressions, causing no less harm to the country. The modus operandi has been to create a legal or constitutional vacuum in which to operate. Widespread tax evasion and misuse of bank loans have been the most visible forms of financial corruption in Pakistan. According to a rough estimate, the annual tax evasion in Pakistan amounts to around Rs 218 billion.

Another revealing statistic is that about 90 percent of all defaulted loans are concentrated among a small number of influential individuals and families in the top 10 category. Ironically enough, loan write-offs, termed by some as "a bank robbery," have come to be accepted as a fact of life. This is one side of picture. On the other side are those living below the poverty line whose number is said to have mounted to over 50 million. Obviously, they are the victims of the free run on national resources.

Such distortions have generated most of the problems we are facing today. Good governance implies a capacity to turn public income into human development outcomes - a yardstick we have yet to measure up to. The most effective antidote against corruption, whether bureaucratic or non-bureaucratic, is good governance and rule of law, while selective application of law and favouritism lie at the root of all that ails Pakistan today.

Systemic weakening and erosion of national institutions over the years has done incalculable harm to the country. This is a major reason why institutions of accountability in Pakistan are on the verge of collapse today, as pointed out by TIP. There is an urgent need to curb the element of discretion. Corruption and misgovernance will automatically disappear.


Institutions of accountability in Pakistan on the verge of collapse: TIP
Business Recorder June 26, 2009

KARACHI (June 26 2009): Transparency International Pakistan (TIP) is worried that institutions of accountability are on the verge of collapse in the country. This was stated by TIP Chairman, Syed Adil Gilani at the annual members' meeting held at a hotel here the other day.

Speaking on the scourge of corruption in Pakistan, he said the instruments which TIP considered necessary tools to combat corruption in public sector were the enforcement and implementation of Public Procurement Regulatory Rules (PPRR) and effective working of Public Procurement Regulatory Authority (PPRA) itself. He said TIP had been trying to sell PPRR for adoption by provincial governments and asking for the installation of PPRA in all the provinces.

"Sindh has already signed a MOU in this regard and the Punjab is our next target. We are trying to convince the government that major corruption in public procurement could be restrained by transparency which is available in the PPRR," he said.

The huge Public Sector Development Programme (PSDP) and the overall budget spent by the government on all the development and non-development spheres needed to be founded on transparent procurement of goods and services, he said. "NAB ordinance needed reforms and there appears to be reforms but there still appears to be no consensus among parties for giving birth to effective accountability establishment," he observed.

Gilani said TIP was worried about the continued exemptions for PPRR and also equally worried that in the absence of any accountability body, the whole country would have to be witness to misuse of resources. The absence of any venue for taking cognisance of misuse would also be a disaster for the country's future to improve its rating in the transparency and become a nation with least questionable conduct of its performance which was evaluated by least corruption in the country, he added.

Elahi Buksh Soomro, ex-speaker and member advisory committee of TIP said he had often heard that most of the politicians were corrupt, so there was need to analyse the situation about corruption, adding that he was convinced that corruption in politics emerged after martial law of 1958.

"I can say it for the brevity that no prime minister prior to 1958 martial law was corrupt," he said and took the names of all those prime ministers and asserted that they carried no stains and were noble men. According to him martial laws and military regimes laid the foundation for corruption because they had to pick up from amongst the politicians to become their front men who bartered this favour for being allowed to make money.

At a later stage these politicians when elected opted to first collect money which they spent on elections and later on for further and following elections. On the basis of his experience, Elahi Buksh Soomro said the 90 percent of the parliamentarians did not know what they were doing and so the ministers relied on bureaucracy. "We need good bureaucracy as a solution for governance and eliminating wide scale corruption we are confronting," he added.

He said, "People representing people should be responsible to people and probably the activity of civil society would be best seen if we were to spend enough on social sector which includes education and health." Arshad Zuberi, Trustee, TIP and Deputy Chief Executive, daily Business Recorder participating in the discussion said TIP must apprise parliamentarians and seek their support for the implementation of public procurement rules and convince them for the establishment of accountability bodies.

The World Bank had been very receptive to PPRR and the country should be proud of it, he added. He criticised the Ministry of Finance for having access to allowing exemptions on projects for observing the Rules. He said in exceptional cases where secrecy had to be observed exemptions were justified but exempting the WAPDA and the Ministry of Defence engaged in commercial activities might not be justified.

Engr. M. A. Jabbar, Chairman of the SITE Association of Industry, who has also been inducted as Trustee of TIP, said institutional framework for combating corruption needed to be examined with an outlook for a solution. "We must think about as to how the accountability institutions should be founded which are influence-free and which provide us reasonable assurance against plundering of domestic resources," he added.

He said, "Embezzlements have led us to look outward for managing the affairs of the government." He said, "Non-performance, non-judicial and highly questionable working of accountability bureau and now FIA and provincial anti-corruption agencies are due to non-tenure positions of the functionaries." Merit alone should be the yardstick for recruitment and functionaries should depend on the system evaluated performance instead of relying on godfather politicians or unscrupulous bosses who would play hell with them if they were to take up independent investigations, influence-free and without dictation, he suggested.

"We must sell to the legislators that they should consider themselves for fair treatment being for both treasury and opposition. If this advocacy works out, then the politicians may live to reality and give effect to the birth of accountability bureaus, which will be influence-free and independent with functionaries working their way on merits with constitutional guarantee of job and assurance of tenure postings."

Referring to the finance bill, he said the changes in the statutes affect the business and most of the time enhance discretion of bureaucracy and tax officials. "We have already identified the reasons of corruption contributed by discretionary powers and misuse thereof," he added.

Engr. Jabbar said, "The present taxation system negates the Constitution which requires executive to be separate from judiciary. In taxation the prosecutor is adjudicator and the present finance bill has manifested the worst examples of amendments whereby judicial forums are being tamed by executive machinery." He said.

"The present finance bill announced by the Minister of State for Finance surprised everybody. It says that tribunals are barred from taking decisions with regard to interim relief against coercive actions of tax administration." How come the tax laws could talk of limiting the jurisdiction of high courts, he questioned. He suggested that TIP should also discuss the tax laws as well as finance bill.

Wajid Jawad, member advisory committee, TIP fully supported the suggestion and sought the concurrence of members to accept his proposal. Barrister Shahida Jamil favoured an independent body for accountability. Others who spoke sought discussion on possible ways and means to stop questionable transactions in stock exchanges and suggested discussions on how to regulate capital markets.


TI Pakistan holds meeting
The News June 24, 2009

The Annual Meeting of Transparency International (TI) Pakistan, was held last evening at a local hotel in Karachi.

The meeting was attended by members TI Pakistan as well as the board of trustees. New trustees that were elected to the board were introduced by the chairman at the start of the meeting. Those who were given membership included Justice (R) Haziqul Khairi, ex-Chief Justice of the Shariat Court, Justice (R) Dr. Ghous Mohammad, ex-Justice of Sindh High Court, Engr. M.A. Jabbar, Chairman SITE Association of Industries, Sohail Muzaffar, Senior Advocate of the Supreme Court and industrialist Javed Farooq.

A presentation was delivered by Saad Rashid to inform the gathering of the organisation’s activities during the past year. This was followed by a presentation on the Anti-Corruption Project Pakistan Phase II. Syed Adil Gilani presented the highlights of the NCPS 2009 and Advocacy and Legal Advice Center (ALAC), describing the challenges that were faced.

The executive director presented the audited report of the period ending from June 2008 followed by the budget for the next financial year. He also presented the strategic plan for the period 2008-2011 as well as answered the queries of the members on the audit report, budget and strategic plan.

At the conclusion of the meeting, an open forum was held where members exchanged their views and offered their suggestions on the various issues discussed. They also presented their views on how TI Pakistan should tackle corruption in the country.


CCP to issue show-cause notice to Pakistan Steel
Business Recorder June 3, 2009

ISLAMABAD (June 03 2009): The Competition Commission of Pakistan (CCP) has decided to issue show-cause notice to Pakistan Steel Mills (PSM) for providing extraordinary favour to Abbas Group in provision of billets, according to official documents obtained from the Commission.

"Based on the documentation provided to the Commission as well as analysis done on the NOR data taken from the PSM website, it appears that the allegation that a large allocation of billets, specifically of category SAE 1008, SAE 1010 and WRS is being made to Abbas Group at the expense of other customers of said billet is true," the Commission said in its inquiry report.

The CCP took suo motu notice of shortage/problems in the provision of steel billets by PSM based on articles in the media on 12-14 February 2009. The issue had also been submitted to the Commission in the form of a complaint by Frontier Foundry (Pvt) Limited on 18 February 2009.

"Over-allocation of billets to Abbas Group has had ramifications on the workings of many re-rolling mills in Pakistan as PSM is their primary source of material. The shortage of material has forced many of them to reduce operations and lay off workers," the Commission further observed. In view of the foregoing, it is concluded that PSM is prima facie abusing its dominant position and is in contravention of section 3(3)(g) and (h) as it has refused to deal with purchasers in relation to low carbon steel billets, despite its own admission that it was holding considerable raw material and finished goods and by doing so, excluded " other undertaking(s) from the production, distribution or sale of any good", in this case, downstream products made from steel billets.

According to documents, there has been a protest by local consumers of steel billets who, despite having offered to buy the product at Rs 5,000 more than the price at which they were being sold to certain buyers, were still not given the raw material. As per another news item, the former chairman of the Association has been quoted as saying that "only 6 to 8 rolling steel mills out of 63 are operating in Karachi these days while others have temporarily stopped work owing to shortage of raw material."

Transparency International Pakistan (TIP) has also expressed concern over the fact that PSM is "not selling its products in a transparent way and is unnecessarily delaying rise in the prices of billets for reasons best known to it."

According to the news item, TIP "has also accused the PS of not fulfilling the transparent procedure for the sale of MS billets. Some PS officials are favouring a company by supplying and allocating extraordinary quantity of billets. As a result, other dealers and re-rolling mills are deprived of getting billets."

This, apparently, is a violation of Memorandum of Understanding (MOU) signed between PSM and TIP in 2004, and much correspondence can be noted on the TI-Pakistan website. In a letter addressed to the Prime Minister on 10 February 2009, the complainant raised the following facts:

a) PSM is the only blast furnace in Pakistan. No other source in Pakistan is capable of producing the quality billets that PSM manufactures;

b) The appointment of a new Chairman of PSM in May 2008 has resulted in undue favouritism towards one particular group - Abbas Group;

c) Prices of billets were reduced on 26 November 2008 and billets of grades SAE 1008 and SAE 1010 were exclusively being allocated to the Abbas Group.

d) Taking advantage of the complete allocation of billets to it, Abbas Group has become the sole provider of wire rods 10 in the country and, as a consequence of this monopoly, is charging exorbitant rates for them.

e) Wire rod and steel bar manufacturers have been given the impression that the government would levy regulatory duty on imported raw material. This has resulted in a catch-22 situation, wanting to take advantage of the low prices of PSM after 26 November 2008 and not getting the required billets on one hand and not being able to import due to the implied threat of paying duty on imported raw material.

The matter of regulatory duty was also mentioned in the newspaper, which quoted PSM.s Director Marketing as saying that "Though we have written to the government in this regard yet so far no duty has been imposed on these products.

f) Information pertaining to the sale of billets and other material was noticeable during 2008 as PSM was making all relevant allocation information (NORs) available on its website. However, PSM stopped putting this information on its website in December 2008.

15. The complainant also submitted allocation data for the period between 6 September 2007 and 4 December 2008. PSM began updating NOR data from 9 February 2009 onwards and NORs for several days in February and March 2009 was also provided. NOR information for last week of March and early April 2009 was monitored by the Inquiry Officer.

"Ensuring the competitive process is a matter of public interest, as the law is underpinned by the notion that competition serves as a powerful means to achieve a desirable public end. By refusing to deal with purchasers of its materials and thereby excluding them from production, distribution or sale of any good, it is recommended that show-cause notice under section 30 of the Ordinance should be issued to PSM," recommends Ahmed Qadir, Director Investigation.



Steel industry rejects 15 percent regulatory duty on flat rolled products
Business Recorder May 11, 2009

LAHORE (May 11 2009): Pakistan Steel-line Pipe Industry Association (PSPA) has rejected the proposed imposition of regulatory duty at the rate of 15 percent on all flat rolled products which are used as raw material for manufactures of steel welded pipes.

Pakistan Steel-line Pipe Industry Association (PSPA, Muhammad Usman, said at a press conference here on Sunday that Pakistan Steel Mills had admitted several times that it could meet only 20 percent of the country's steel demand and the remaining 80 percent was being imported. Members of the Pakistan Steel Line Pipe Industry Association and also other manufacturers of pipes import 75 percent of the flat rolled products and 70 percent of flat rolled products produced by PSM are being lifted by the pipe manufacturers and as such they were the biggest stakeholders of the flat rolled products in Pakistan.

He said that the number of industries involved in steel pipe manufacturing was more than 100. Total investment of this sector was around Rs 40 billion. He said consumption of flat rolled products by pipe manufacturer is about 70,00,00 tons in Pakistan. Export of pipes to the tune of Rs 6 billion was also being made by manufacturers of pipes presently and there is a great scope for its enhancement. He said there is a 10,000-strong labour force involved in this sector and 40,000 labour force in the allied industry.

He said that recently China had announced 15 percent export rebate on steel pipes and for HR flat products no export rebate was applicable. C&F Karachi port prices of steel pipes and flat products, offered by China, are the same, he added.

He said since there is 10 percent import duty on flat products and 15 percent on steel pipes, so the imposition of 15 percent RD would increase the raw material duty from 10 percent to 25 percent and for the steel pipes it would remain 15 percent. So the steel pipe industry would not be able to continue their production.

He said that such step to impose RD was being taken to protect Pakistan Steel Mills only, without taking into consideration the disastrous effects which the pipe manufacturers would suffer.

The Pakistan Steel Mills was making huge profits in the previous 3 years but was now suffering losses due to poor governance, mismanagement and without the proper planning for making purchases of raw material. Similarly, production plans were wrongly made. Decisions were not taken at the proper time which gave rise to lot of malpractice and corruption with the result that PSM was suffering losses and now wanted to cover these by selling goods at higher price, he added.

He said that the international market of HR coils was now at $400 C&F Karachi which comes to Rs 32,000 without the addition of customs duties, sales and other taxes, whereas the sale price of Pakistan Steel Mill was Rs 47,500 without additional taxes. If taxes were added the price would be much more. This clearly indicates that PSM is not following proper policies to compete with international prices, he said.

Further he pointed that APSM was the only manufacturer of flat rolled products in Pakistan and after imposing the RD the import would not be feasible any more and PSM would have a monopoly to set any price and this would result in corruption and inflation for the masses.

He said it had been an inalienable and individual policy of Pakistan to assist the development of nascent engineering industry in Pakistan. In view of this policy, the Federal Government had already exempted customs duties in excess of 5 percent on HR coils, under Serial No-88 of SRO. 565(I)/2006 dated 05.06.2006, provided that such raw materials were not manufactured locally. It was submitted that the purpose of building tariff barriers, through the instrument of regulatory duty was invariably to afford protection to the local industry. Accordingly, regulatory duty should not be levied on such HR coils as were not manufactured locally.

He said that it was needless to recapitulate that the engineering industry was now the stepping stone to achieve industrial excellence, wherever progress in the industrial field was desired by any Government. He said that the industry has great faith and confidence that the government would not succumb to the proposal of some interested local parties to hit the engineering industry at its very roots.



PBA urges government not to dilute or repeal NAO through proposed law
Business Recorder May 11, 2009

KARACHI (May 11 2009): Pakistan Banks Association (PBA) has called upon the government not to dilute or repeal National Accountability Ordinance (NAO) through the proposed Accountability Law as it would adversely affect the existing framework for checking money laundering and also amount to a departure from the international commitment of Pakistan as a signatory to the United Nations Convention against Corruption (UNCAC).

As per the invitation to all stakeholders, extended by Minister of Parliamentary Affairs Dr Babar Awan, for improvement in the proposed Holders of Public Offices (Accountability) Act, 2009 Bill, the representative body of the banking industry - PBA - has pointed out that Pakistan is a signatory to the UNCAC; the Convention has also been ratified by the government and therefore the concepts, principles and provisions of the document have to be applied and implemented in the domestic legal and administrative frameworks in matters involving accountability and corruption prevention.

By ratifying the convention, the government of Pakistan has given a commitment to the States parties to apply and interpret the domestic law harmoniously with the provisions of the Convention and to improve existing domestic laws so as to bring the same in conformity with the consensus reflected in the Convention.

Our international commitment, says PBA, has the following salient aspects:

-- Government of Pakistan will endeavour to implement anti corruption measures both in public and private sectors;

-- There will be no exceptions or exclusions for any class or group from the mandate and scope of Accountability Law;

-- Prevention and awareness will be an integral part of accountability system;

-- Strict administrative and legal measures will be taken to check money laundering with proactive role of banks and financial institutions;

-- Professional bodies/associations will be assisted and encouraged to strengthen their accountability functions;

-- Meaningful international co-operation will be ensured in cases of corruption and fraud; and

-- Existing anti-corruption and accountability apparatus will be strengthened through legislative improvements, capacity building and enhanced resources.

PBA feels that the proposed accountability law bill reflects a significant departure from the UNCAC. In fact it amounts to halting the anti-corruption drive and practically ousting the accountability agenda from government priorities.

Further, says PBA, the proposed bill has a limited scope and therefore, would be highly inadequate to check corrupt practices, which are quite rampant. During the effective implementation phase of NAO, proper measures were taken by National Accountability Bureau (NAB) to enquire, investigate, settle or prosecute corrupt practices.

There were nevertheless, says PBA, complaints of improper use of authority by some NAB officials which certainly needs to be confirmed. It may however, be mentioned that the banks, financial institutions and other bodies associated with financial or commercial activities referred cases of fraud, breach of trust and wilful loan default to NAB which were largely processed in an efficient manner resulting in recovery and settlements worth hundreds of billions.

The menace of imprudent lending substantially decreased due to adequate provisions in the NAO and a well defined mechanism to report and handle default cases under the supervision of State Bank of Pakistan. Cases involving fraud and other illegal acts concerning banks were finalised in a professional manner which hitherto was a distant cry.

Banks experience with Federal Investigation Agency (FIA) was never satisfactory and even disappointing in cases involving intricate issues. It would therefore be proper and desirable to further strengthen the financial crimes investigation expertise of NAB instead of dismantling the same, PBA added.

PBA said that the initiatives already taken to combat Money Laundering (ML) require proper enforcement mechanism, dilution of NAO or its repeal would frustrate all such measures and in addition to its adverse effects on the existing ML framework, Pakistan would also appear to have ignored its explicit obligations towards the international community. Mega scams in the form of Co-operative Societies Fraud, Illegal Housing Societies, sham forex companies, Double Shah Tactics resulted in colossal losses to the general public.

The volume, nature and complexities of such cases would have further aggravated the plight of innocent victims if action under the NAO had not been initiated. Recovery and compensation in this regard has helped in mitigating the difficulties of the public. It is unfortunate that no such mechanism is envisaged in the proposed Accountability bill. The ineffectiveness of Anti-Corruption Establishments (ACEs) and FIA in the past would again be a norm for such cases.

PBA emphasised that systemic corruption cannot be rooted out through traditional measures. Law has to evolve to counter the challenge through effective modern legislation in sync with legal development in other jurisdiction. NAO provides a mode of acquiring bank details of an accused, issues of secrecy cannot be used as an excuse to withhold vital information necessary for determining the truth, a similar provision is absent from the bill and reliance has been placed on the general law.

PBA reminded that the developing nature of the economy and the experience of breakdown of the financial institutions in the past coupled with public scams and pilferage of public funds necessitate the existence of a legal framework which ensures that public and private sectors operate in accordance with international best practices with accountability, transparency and integrity as their hallmark.

Finally, said PBA, it would be prudent and appropriate if the institution of NAB is retained, may be with a new name and style of Ehtisab Commission. Its effectiveness and impartiality is strengthened by making adequate improvements in the rules and Standard Operating Procedures (SOPs) and weaknesses are cured to ensure across the board accountability. The state of recoveries and other settlements in cases including bank frauds, bank default and imprudent lending (Recovery till date: Rs 116.780 billion and Rescheduling/bank loans: Rs 67.47 billion).

We need to leap forward from these milestones through constructive measures and actions in the right direction, concluded PBA.


TI terms Holder of Public Office Act a continuation of NRO
Business Recorder April 30, 2009

The bill of Holder of Public Office (Accountability) Act-2009, which is supposed to repeal the National Accountability Bureau (NAB) Ordinance-1999, is a vague bill, and is in fact a continuation of the National Reconciliation Ordinance (NRO), according to Transparency International Pakistan (TIP).

TIP Chairman Syed Adil Gilani said on Wednesday that if this proposed law was made an Act of parliament, it will allow corruption to flourish and the corrupt to enjoy its benefits without fear of prosecution.

He said that the bill presented in the National Assembly was said to be in line with the demands agreed upon in the Charter of Democracy (CoD), but this was not the case.

“The CoD calls for the accountability of NAB and other ehtesab operators to identify and hold accountable the abuse of the NAB office by operators through perjury and perversion of justice and violation of human rights since its establishment. It calls to replace the politically-motivated NAB with an independent accountability commission, whose chairman shall be nominated by the prime minister in consultation with the leader of opposition and confirmed by a joint parliamentary committee, with 50 percent members from treasury benches and remaining 50 percent from opposition parties in same manner as appointment of judges through transparent public hearing,” he added.

The TIP chief said: “It is now widely accepted that corruption is the ‘cancer’ which has deprived Pakistan of rule of law for the last 60 years and has weakened the very foundation of the nation. It has limited the economic growth, hampered investment, and reduced the effectiveness of development programs, while diverting the important and scarce public resources towards private gains. This has caused militancy amongst the deprived youth, which is now threatening the very existence of the state.”

Syed Adil Gilani said foreign aid did not reduce terrorism in Pakistan nor strengthened Pakistan’s economy, as the USA aid of US$ 11 billion from 2001 to 2007 was misused and pocketed by corrupt rulers, and there has been manifold rise in the terrorism and frequent incidents of suicide bombing, which never happened in Pakistan before 2002.

“TIP demands from the parliament to immediately form an independent accountability commission, as committed by the main political parties to the nation to stop the abuse of public office for private gain, and the new commission shall also include the local government’s elected members like Nazim, councillors, government officers, armed forces officers, judiciary and private sector,” he said.

Syed Adil Gilani said that the proposed bill also did not meet the commitment given to the United Nations by the Government of Pakistan in August 2007 under United Nations Convention against Corruption (UNCAC), which might create doubts in the donor countries/agencies about the will of the political government to fight corruption.

“Pakistan at this point of time needs to demonstrate to the world at least its willingness for the good governance, and has to ensure existence of independent body to prevent corruption by such means as implementing preventive anti-corruption policies and practices and, where appropriate, overseeing and coordinating the implementation of those policies; and increasing and disseminating knowledge about the prevention of corruption.

“Pakistan is also committed to inform the Secretary General of the United Nations of the name and address of the authority that may assist other states’ parties in developing and implementing specific measures for the prevention of corruption. This function at present is the responsibility of the National Accountability Bureau.

“The proposed Accountability Commission instead of being independent body is to be under the Ministry of Law and Justice. TI Pakistan suggests that the new organization, which is to replace NAB, has to be an independent accountability commission, and shall function independently as required under UNCAC, and be accountable only to the parliament or judiciary,” he concluded.


Transparency International Pakistan’s awareness programme
Dawn May 7, 2009

RAWALPINDI, May 6: The Transparency InternationalPakistan has launched an initiative aimed to create awareness of good governance among students. In this regard, a debate competition was organised at the International Islamic University on Wednesday. In its programme, Transparency International Pakistan focused on the theme of ‘Absolute power corrupts absolutely.’ Students from eight institutions participated in the competition. A total of 16 debaters spoke for and against the motion. The session was chaired by Prof Kaisera Alvi, the IIU student adviser. The participants presented lucid arguments to support their contentions. The first prize was won by Nafeesa Hadis of the IIU, the second by Hashim Mufti, (SEEC) NUST, while the third prize went to Hifsa Saeed of Fatima Jinnah Women University. Speaking on the occasion, Zakir Mohammad Johar, Director General of International Islamic University said students must fight against corruption as Quaid-i-Azam Mohammad Ali Jinnah and poet philosopher Allama Mohammad Iqbal had always exhorted them, because they are the leaders of tomorrow. He advised the students to take part in wholesome activities to involve themselves in the community and become model citizens. Professor Dr A.H. Nayyar, research fellow, Sustainable Development Policy Institute, asked the students to strive hard to make the country corruption free. The judges of the competition were Kaneez Fatima, Dr Nayyar and Dr Mobina Talat. The competition ended with the distribution of prizes and certificates among the winners and participants.


Shershah bridge collapse: inquiry report was tampered with: TIP
Business Recorder May 7, 2009

ISLAMABAD (May 07 2009): Prime Minister's Secretariat has been informed that the in 'Shershah bridge collapse', apparently prepared by a six-member panel, was tampered with to save the skin of some 'heavyweight culprits'. "The inquiry report, prepared by the six-member inquiry committee and announced to public in February 2009, 17 months after the accident and 12 months after it was submitted to you, is under criticism.

Allegations of tampering with the actual contents of the report have been levied by one member of the inquiry team," said Transparency International Pakistan (TIP), in a letter to the Chairman of Prime Minister Inspection Commission (PMIC) inquiry committee, Lieutenant General Farooq Ahmad Khan (retired), a copy of which has also been sent to Minister of Communication, Chairman, Public Accounts Committee, Chairman, NHA and DG, NLC.

On September 1, 2007, a major part of the Shershah Bridge collapsed, killing 10 people. On September 23, 2007, the (then) Federal Minister for Communication, Shamim Siddiqui, issued a statement that the inquiry of the incident was complete and would be shown to the media before Eid. This deadline was not met.

In the letter, clarifications have been sought from PMIC Chairman as to why only three members of the inquiry team had signed the report. Out of the remaining three, one member has expired, but the signatures of two other members are also missing from the report.

One of the three members of the committee who had signed the report, Advocate Nasir J R Shaikh, reportedly stated that the report has been tampered with, and the word "criminal" was omitted on page 51, in the third paragraph of the "findings and fixing responsibilities" section. This para was actually "criminal neglect on part of NHA in media".

Page 3 of the inquiry report contains the names of the other members of the inquiry team which is missing from the investigation report posted on the website. TIP has also cited a report according to which PMIC inquiry committee comprised of Dr Sahibzada Farooq Ahmed Raffiqui, Farooq A Chaudhry, Zafar Razzak (late), Dr Sarosh Hashmat Lodhi, Farrukh Hassan Pasha, Munir Ahmed Rana, and a lawyer whose name was not disclosed. These six members, mentioned on page 1 of the inquiry team report, do not include Farooq A Chaudhry, who was the only design engineer in the committee with practical experience as a bridge designer and supervision consultant.

The reinforced cement concrete (RCC) core test results, reported in section 7.2.2 on page 47, state that "for concrete strength, however, split results are reported, where strength from core are much lower than the desired strength. In spite of the deficiency found by inquiry team, the report has not blamed contractor, M/s NLC.

Instead, the report in section 7.2.3 has tried to exonerate contractors' deficiency by stating 'as is evident from the report that diameters of cores were smaller than specified in ASTM C-42 and that the core drilling machine was producing vibrations during drilling, both these factors contributed towards the low strength indicated by core tests'."

These remarks cast doubts on the technical abilities of the inquiry team members on the core testing procedures, as the tests were performed under supervision of the inquiry team members, and in the NED University lab. Why and under whose orders correct size of core samples were not obtained by the committee? Though the TOR for inquiry team was also to make recommendations for avoiding such tragedies in future, the report does not contain fruitful and concrete recommendations for avoiding such accidents in future.

According to the TIP, in fact the committee members seem to be ignorant of the Tendering Rules, Public Procurement Rules 2004. The statement on page 57 confirms lack of knowledge of the committee members on the procurement laws in Pakistan.

BIDDING PROCESS: Process of biding should be reviewed in the light of best value procurement system, instead of the existing system and no hiring of contractors or consultants should be allowed without competitive bidding". The Procurement Rules under the Statuary requirements under SRO 432(I)/ 2004. - 9 June, 2004, in all federal government departments are:

20. PRINCIPAL METHOD OF PROCUREMENT: Save as otherwise provided hereinafter, the procuring agencies shall use open competitive bidding as the principal method of procurement for the procurement of goods, services and works.


Privatisation deals of previous government: government to conduct special audit, says minister
Business Recorder May 1, 2009

ISLAMABAD (May 01 2009): The government will conduct special audit of privatisation deals of previous government, said Minister for Privation Naveed Qamar here on Thursday. Briefing the Standing Committee on Privatisation, the minister said the government has already ordered for carrying out a special audit of the privatisation transactions of the previous government.

A meeting of the committee headed by Malik Bilal Rehman was convened to have a briefing from the Privatisation Commission performance and functioning. The minister said the Auditor General of Pakistan (AGP) was directed to conduct special audit of privatisation of all the entities including Karachi Electric Supply Company (KESC).

He said the AGP had completed this special audit and soon these reports would be published, which he committed would not only be forwarded to the Public Accounts Committee (PAC) but to the standing committee as well for scrutiny. Naveed apprised the members of the problems faced to the government on many like lack of clear land titles of many entities including the Pakistan Telecommunication Company Limited (PTCL).

He said that neither provincial governments nor entities had record of title transfers. The provincial governments were now demanding current commercial rates for transfer of titles, he added. Replying to a question of MQM member Khawaja Sohail Mansoor, the minister said he himself had apprehensions over the privatisation of the KESC and believes the deal was done on weaker terms.

He said the government has delayed the privatisation programme due to economic recession. He said although the privatisation policy aims at utilising 90 percent of the privatisation proceeds for debt retirement and 10 percent for poverty alleviation, but this policy was set aside in the recent past and the money was used to bridge the budget deficit.

The minister also briefed the meeting about the privatisation policy recently reviewed by the government, saying it would be on the line of public private partnership with only 26 percent share would be privatised.

Mamoona Hashmi of the Pakistan Muslim League-Nawaz (PML-N) said it is the responsibility of elected members to inform the public about privatisation deals of the previous regime and losses incurred to the national exchequer owing to these deals.

Meanwhile, the standing committee unanimously recommended that comprehensive sale deed of the KESC and Pakistan Steel Mills (PSM) may be furnished before the committee in the next meeting, as the members wanted to know what sort of criteria was adopted in their transaction. The committee also recommended that each member from the National Assembly and Senate might be included in the Privatisation Commission Board through legislation.


CCP serves show cause notice on PSM
Business Recorder May 1, 2009

ISLAMABAD (May 01 2009): The Competition Commission of Pakistan (CCP) has served a show cause notice on Pakistan Steel Mills for giving financial benefit to one group of re-rolling mills by increasing its allocation and denying this privilege to others. The show cause notice was served on PSM in what appears to be, prima facie, a refusal to deal on the part of the mill with many consumers/buyers of low carbon steel billets, said the CCP.

It is learnt that the complainant accused the top management of PSM of giving financial benefit to one group of re-rolling mills by increasing its allocation of wire-rod billets and denying others.

He said that PSM enhanced allocation of Abbas Group and reduced allocation of other re-rolling mills. Abbas Group owns three re-rolling mills-Al-Abbas Steels (Pvt) Limited, Abbas Steel Industries (Pvt) Limited and Abbas Engineering Industries Limited, which use MS bars and wire products, they added.

PSM has also reportedly provided wire-rod billets in October and November 2008 to Abbas Group while no other re-rolling mill was able to produce wire-rod. The monopoly of wire-rod of Abbas Group led to increase of wire-rod price substantially which in the case of equitable distribution would have been much lower.

While taking suo motu notice of articles in media as well as on a complaint submitted by Frontier Foundry Pvt (Ltd), the CCP said that much of the mill's production of billets was being allocated to a few undertakings collectively known as the Abbas Group, the Commission looked into the matter.

Based on media articles and information given by the complainant, the limited provision of billets to many consumers/buyers has had immense repercussions on the steel re-rolling industry such as reduced operating shifts and employee layoffs.

Despite the willingness on the part of consumers to pay premium prices for the billets, PSM has not provided the much-needed item in the quantities required. Based on an analysis of the allocation data, also known as notices of readiness, which the PSM is providing on its website, the Commission concluded that there was sufficient ground in the media stories and the allegation made by the complainant to issue a show cause notice to PSM. The hearing has been scheduled for May 19, 2009 in Islamabad, it added.


Pakistan Steel posts Rs 13 billion losses in July-March
Business Recorder April 30, 2009

KARACHI (April 30 2009): Pakistan Steel has posted a loss of over Rs 13 billion in nine months of the current fiscal year. This has occurred for the first time in eight years due to global economic recession and ineffective policies, Business Recorder learnt on Wednesday. The steel producer had earned enough profits during year 2000-01 to 2007-08, but during the current year it has incurred losses due to low sales and import of raw material at high rates. The Mills is facing huge financial crisis due to consecutive losses in the current fiscal year, sources said. Financial documents made available to Business Recorder show that PSMC faced a loss of Rs 13.248 billion during July-March period of 2008-09 against 2007-08 profit of Rs 3.44 billion. Sources said that inefficient policies, purchase of raw material on high rates and low demand of steel products in the domestic market due to global economic meltdown were the major causes of the rising losses of the mills. They said that PSMC made a purchase agreement of raw material in April 2008, when the prices were at peak level. But after that the price of raw material like iron ore declined sharply in the world market. Despite reduction in the raw material prices, PSMC was not able to cancel or revise the already made contracts due to the likely legal action by the supplier of the raw material. Sources in PSMC confirmed that the mills losses had been gradually increasing and crossed level of Rs 13 billion just in nine months of current fiscal year. In July, 2008), PS posted a profit of Rs 367 million. However, in the remaining eight months, the mills posted huge losses. PS registered a loss of Rs 55 million in August 2008, Rs 200 million in September 2008, Rs 660 million in October 2008 and Rs 4.1 billion in November 2008. December 2008 losses amounted to Rs 2.5 billion, Rs 2 billion in January 2009, Rs 2 billion in February 2009 and Rs 2.1 billion in March 2009. Against this, during fiscal year 2000-01 the mills posted Rs 552 million profit, Rs 102 million in 2001-02, Rs 1.042 billion in 2002-03, Rs 4.852 billion in 2003-04, Rs 6.008 billion 2004-05, Rs 705 million 2005-06, and Rs 3.159 billion in 2006-07. Sources said that sales were also on decline since July 2008, which stood at Rs 5.1 billion in July last to Rs 2.9 billion in March 2009, due to reduction in the Public Sector Development Program (PSDP) by the federal government and slow economic activities. They said that PSMC management adopted an ineffective marketing policy, which raised the losses of the mills. With the aim to reduce inventory and enhance sales, the PS management sold its products at under-cost, which also increased the losses, they added. They said that the prices of all products increased in the year 2008-09 comparing with the prices of 2007-08 except the billets which is being sold Rs 6,500 per ton less than the price of 2007-08. The re-rolling mills association also offered to pay Rs 5,000 per ton higher price in the presence of secretary ministry of industries. However, the mills did not change the prices of billet. They said that MS billet is the one of the products, which was being sold some Rs 30,000 per ton less than cost to earn revenue for meeting daily expanses. Meanwhile, several attempts were made for obtaining the version of PSMC management and after telephonic conversation PS spokesman assured that he would send their point of view in evening on fax. However, till the filing of story Business Recorder received no fax.


Pakistan Steel Mills posts Rs 13 billion losses in July-March
Dawn April 29, 2009

LAHORE, April 29: Federal Minister for Industries and Production Mian Manzoor Ahmed Wattoo has said that government has decided to fix the prices of all products manufactured by Pakistan Steel Mills (PSM) in accordance with the international market. It will also dispose of its stocks by open auction. Speaking as the chief guest at the first Iron and Steel conference here on Wednesday the minister said that the decisions had been taken to bring transparency in the affairs of the PSM. The mills administration will not be allowed to review the prices of its products without the consent of the government. He said that it had also decided to increase the production capacity of PSM from 1.1 million tons to 5 million tons per annum. The government will award the contract for the expansion of the mills capacity by inviting international tenders, he added. He said that he would forward the proposal to the prime minister for inclusion of a representative of the industry on Pakistan Steel Mills board of directors. Pakistan Steel Re-Rolling Mills Association chairman Latif Chaudhry said that the steel industry had an installed capacity of 8 million tons per annum but was producing only 4 million tons. The PSM was producing only one million tons. The world consumed 1.4 billion tons of steel last year whereas in Pakistan consumption of steel was only 0.4 per cent. He said that the PSM price fixation and marketing policy required transparency but it was not ready to talk about it. It does not fix the prices of its products in conformity with the international market, he added. He said that the government should constitute a committee to ensure continuous availability of raw material and solve the problems of the steel industry using 10,000 to 12,000 tons of steel daily. He said that the government should not only reduce the high mark-up rate but also review the duty structure of the steel products, which had not been changed despite reduction in steel prices in the international market. The government should also increase vocational training facilities for providing skilled workforce to the industry, he added. Tuwairqi Steel director Zaigham Rizvi said that per capita steel consumption in Pakistan was only 30 kg per annum against 384 kg in China. .


TIP calls HOPO: act as National Reconciliation Act
Business Recorder April 28, 2009

KARACHI (April 28 2009): The bill of Holder of Public Office (Accountability) Act, 2009, to repeal NAB Ordinance 1999 is a vague bill, made only for the elected parliamentarians, excluding civil servants, local government members, and armed forces personnel, and is actually National Reconciliation Act, a continuation of NRO. The bill requires major modifications. It begins with wrong notion, as it defines the aim as to repeal the National Accountability Ordinance, 1999 and to enact new law of Accountability. The aim is for establishing an Independent Accountability Commission to eradicate corruption, as has been promised by major political parties in their election manifesto of 2007. Syed Adil Gilani, Chairman Transparency International Pakistan said that this proposed law if made an Act of Parliament, would allow corruption to flourish and the corrupt to enjoy its benefits without fear of prosecution. He said that the bill presented in the National Assembly is stated to be according to a demand agreed in the COD, but, this is not the case. The Charter of Democracy calls for accountability of NAB and other Ehtesab operators to identify and hold accountable abuse of office by NAB operators through purge and perversion of justice and violation of human rights since its establishment, and calls "to replace politically motivated NAB with an Independent Accountability Commission, whose Chairman shall be nominated by the Prime Minister in consultation with the leader of opposition and confirmed by a Joint Parliamentary Committee, with 50 percent members from treasury benches and remaining 50 percent from opposition parties in same manner as appointment of judges through transparent public hearing." It is now widely accepted that corruption is the 'cancer' which has deprived Pakistan of rule of Law since last 60 years, and has weakened the very foundation of the Nation. It has limited economic growth, hampered investment, and reduced the effectiveness of development programmes, and diverted public resources towards private gains. Poor became poorer, breakdown of democratic and administrative institutions. This has caused militancy amongst the deprived youth, which is now threatening the very existence of the state. Syed Adil Gilani said that foreign aid did not reduce terrorism in Pakistan nor strengthened Pakistan economy, as the US aid of US $11 billion from 2001 to 2007 was misused and pocketed by corrupt rulers, and there has been manifold rise in terrorism, and frequent incidents of suicide bombing, which never happened in Pakistan before 2002. TIP demands from the parliament to immediately form an Independent Accountability Commission, as promised by your parties to the nation to stop "the abuse of public office for private gain", and the new Commission shall also include Local Government elected members like Nazim, Councillors, Civil govt officers, Armed forces officers, judiciary, and private sector representatives. Chairman TIP said that the proposed bill also does not meet the commitment given to the United Nations by the Government of Pakistan in August 2007 under United Nation Convention against Corruption (UNCAC), which may create doubts in the donor countries/agencies about the will of the political government to fight corruption. The proposed Accountability Commission instead of being independent body, is to be under the Ministry of law and Justice. TI Pakistan suggest that the new organisation, which is to replace NAB has to be an independent Accountability Commission, and shall function independently as required under UNCAC, and be accountable only to the Parliament or Judiciary.-PR


TIP calls HOPO: act as National Reconciliation Act
Dawn April 28, 2009

RAWALPINDI, April 27: The Transparency International Pakistan (TIP) has described as vague Holder of Public Office (Accountability) Act, 2009, which will replace the NAB Ordinance of 1999. “The bill is made only for elected lawmakers, excluding civil servants, local government members, armed forces’ personnel and is actually the continuation of the National Reconciliation Act and requires major modifications,” Syed Adil Gilani, chairman of Transparency International Pakistan, said in a statement issued here on Monday. “It begins with a wrong notion as it declares that its aim is to repeal the National Accountability Ordinance, 1999, and to enact a new law of accountability. The aim is to estab lish an Independent Accountability Commission to eradicate corruption as has been committed by major political parties such as PPP, PML-N and PML-Q in their election manifestos in 2007,” the statement said.It said that the proposed law, if made an act of parliament, would allow corruption to flourish and the corrupt would enjoy its benefits without fear of prosecution. He said the bill presented in the National Assembly was stated to be meeting a demand agreed in the COD, but this was not the case. “The Charter of Democracy calls for accountability of NAB and other Ehtesab operators to identify and hold accountable abuse of office by NAB operators through perjury and perversion of justice and violation of human rights since its establishment, and calls for replacing politically-motivated NAB with an independent accountability commission, whose chairman shall be nominated by the prime minister in consultation with the Leader of Opposition and confirmed by a joint parliamentary committee with 50 per cent members from treasury benches and the rest from opposition parties, in the same manner as appointment of judges through transparent public hearing. “It is now widely accepted that corruption is the cancer which has deprived Pakistan the rule of law for the last 60 years and has weakened the very foundation of the nation. It has limited the economic growth, hampered investment and reduced the effectiveness of development programmes, and diverted the important and scarce public resources towards private gains, dictatorial rule of military and civilian rulers who spread illiteracy with poor becoming poorer and breakdown of democratic and administrative institutions. This has caused militancy among the deprived youth, which is now threatening the very existence of the country,” the statement said. The statement said that foreign aid did not reduce acts of terrorism in the country nor strengthened the country’s economy, as the US aid of $11 billion from 2001 to 2007 was misused and pocketed by corrupt rulers. The TIP asked parliament to immediately form an independent accountability commission, as committed by all major political parties to stop the abuse of public office for private gains and the new commission should have powers to hold accountable local government’s elected members like nazims, councillors, government officers, armed forces’ officers, judiciary and the private sector. The TIP chairman said that the proposed bill did not meet the commitment given to the United Nations by the Government of Pakistan in August 2007 under UN Convention against Corruption (UNCAC), which might create doubts in donor countries/agencies about the will of the political government to fight corruption. He said that Pakistan needed to demonstrate to the world its willingness for good governance and to ensure existence of an independent commission to fight corruption.


Complaint cells at district level
Dawn April 26, 2009

LA KARACHI, April 26: The government is considering a proposal to establish public complaint cells in all districts of Sindh. The cells will be set up on the pattern of the Awami Complaint Cell (919) working at the Chief Minister’s House. They will function under the supervision of the DCO/DPO of the concerned district. This was stated by Sindh Minister for Works and Services Manzoor Hussain Wassan while receiving public complaints at the CM’s House cell on Sunday. The minister renewed the PPP’s pledge of serving the masses without any discrimination, and said that the government was taking all possible measures to address grievances of the common man. The minister issued on-thespot directives to the officials concerned for addressing the complaints conveyed to him by callers from the general public. Most of the complaints received on Sunday pertained to police, water and power and health departments.—APP


Clarification
Business Recorder April 21, 2009

KARACHI (March 21 2009): Apropos a news item published in Business Recorder on March 18 captioned as "TIP accuses PS of non-transparency in sales", Abbas Steel Group has clarified that its business dealings with Pakistan Steel Mills are above board and it does not enjoy any exclusive treatment in the application of the policies of the Pakistan Steel Mills. As far as Abbas Steel Group is concerned it believes that all policies of Pakistan Steel Mills are uniformly applied to the different clients of Pakistan Steel Mills. As for the supply of Pakistan Steel Mills products, Abbas Steel Group has been receiving much less quota than what is required for running its units according to the installed capacity. These units were established as original downstream units of Pakistan Steel Mills almost twenty years back. It is worth mentioning here that the group runs two automatic plants out of five in the country that produce high quality value-added products of steel. Pakistan Steel Mills is a shareholder in one of the plants of Abbas Steel Group. These plants are the largest in terms of capacity and were designed and installed specifically for the consumption of Pakistan Steel Mills products. It has been clarified previously also and is being placed on record again that Riaz Lalljee in his personal capacity neither holds any executive position within the group nor is a shareholder in the company, although the business is managed by his family.-PR


Judges will not become acting governors: NJC
Dawn April 20, 2009

ISLAMABAD, April 19: The National Judicial (policy-making) Committee resolved on Sunday that no chief justice or judge of any superior court will become acting governor of a province or hold any public office in future. The committee headed by Chief Justice Iftikhar Mohammad Chaudhry noted with concern the trend among retired judges of superior courts to accept appointment to various offices and said it was below the status of a judge. It asked the government to stop making such offers and the incumbents reconsider if should remain in the position they were currently holding. The meeting stressed the need for better implementation of laws and provision of justice to deserving people. “The existing laws are sufficient enough but require proper implementation and if they are followed properly it will automatically streamline the system and provide justice to the people,” Justice Chaudhry said in his remarks on the last day of the two-day meeting. The meeting supported the proposal of the chief justice to declare the year 2009 as the ‘Year for Justice for All’ with focus on justice at the grassroots level. An official handout said: “The committee decided that in future no chief justice or a judge of superior court shall accept appointment as acting governor of the province, in the same way they will not accept appointment of any other public office in federal/provincial government.” The meeting recommended that the provision of the Constitution should be strictly followed which says: “A former judge of Supreme Court or a High Court should not hold the office of profit in the service of Pakistan, not being judicial or quasi-judicial office of the Chief Election Commissioner or of a chairman or member of the Law Commission or of chairman or member of Council of Islamic Ideology before the expiry of 2 years after his retirement.” The CJ said: “Therefore, no retired judge of the superior court shall accept an appointment of an ex-cadre post which is lower than his status, including banking court, customs court, central court, administrative tribunal and federal/provincial service tribunals, etc. “The government may relieve such judges and the judges should also consider resigning from their post. This will be a safeguard against judges of the superior courts as well as subordinate courts from being induced/influenced for appointment to such posts.” The committee recommended that the trend of retired judicial officers being appointed to special courts be also discouraged and as per the requirement of principle of independence of judiciary, qualified serving judges should be appointed to the posts, in consultation with the Chief Justice of High Court. The independence of judiciary and its separation from the executive and maintaining impartiality was a mandate of the Constitution, which shall be fully enforced, it stressed. The meeting took notice of increasing complaints of corruption amongst judicial officers and court staff and supported the policy of the Chief Justice of Pakistan to show zero tolerance for corruption. It was resolved that the high court would improve the present mechanism/procedure for initiating disciplinary proceedings against corrupt/inefficient judicial officers and the matter preferably should be taken up to the chief justice of the high court for prompt action against the corrupt/inefficient judges/court staff. The committee requested members of the bar and general public to submit credible evidence against such corrupt judges for prompt action. The meeting decided that a “cell for eradication of corruption from judiciary” under the supervision of the registrar of the respective high court shall be established. Complaints with credible evidence be forwarded to such cell and a copy thereof should be forwarded to the registrar, supreme court. The committee agreed to prepare a comprehensive strategy and scheme for clearance of backlog and expeditious trial proceedings. It resolved that certain cases should be handled on fast track for quick disposal which may include bail matters, stay matters, writ petitions, revisions, family cases, rent cases, cases of juvenile offenders, etc. Mr Justice Haziqul Khairi, Chief Justice of the Federal Shariat Court; Mr Justice Tariq Parvez Khan, Chief Justice of the Peshawar High Court; Mr Justice Amanullah Khan, Chief Justice of the Balochistan High Court; Mr Justice Anwar Zaheer Jamali, Chief Justice of the Sindh High Court; Mr Justice Khawaja Mohammad Sharif, Chief Justice of the Lahore High Court; and Dr Faqir Hussain, Secretary of the Committee, attended the meeting. The committee also held a special session which was attended by representatives of the bar including the president of Supreme Court Bar Association, vice chairman of Pakistan Bar Council, vice chairmen of the four provincial bar councils and presidents of the high court bar associations. The participants agreed with the proposals of the chief justice to ensure that the bench and the bar would work in unison. The representatives of the bar agreed that they would not seek unnecessary adjournments and cooperate with the judiciary in quick dispensation of justice and eradication of corruption. It was resolved that interaction between the bench and the bar would continue and high courts as well as district courts would also convene special meetings with the representative of the bar to evolve a strategy for clearance of the backlog and expedite disposal of cases. islamabad, april 19: the national judicial (policy-mak- ing) committee resolved on sunday that no chief justice or judge of any superior court will become acting governor of a province or hold any public of- fice in future. the committee headed by chief justice iftikhar mohammad chaudhry noted with concern the trend among re- tired judges of superior courts to accept appointment to various offices and said it was below the status of a judge. it asked the government to stop making such offers and the incumbents reconsider if should remain in the position they were currently holding. the meeting stressed the need for better implementation of laws and provision of justice to deserving people. “the existing laws are suffi- cient enough but require proper implementation and if they are followed properly it will auto- matically streamline the system and provide justice to the peo- ple,” justice chaudhry said in his remarks on the last day of the two-day meeting. the meeting supported the proposal of the chief justice to declare the year 2009 as the ‘year for justice for all’ with fo- cus on justice at the grassroots level. an official handout said: “the committee decided that in future no chief justice or a judge of su- perior court shall accept appoint- ment as acting governor of the province, in the same way they will not accept appointment of any other public office in feder- al/provincial government.” the meeting recommended that the provision of the constitution should be strictly followed which says: “a former judge of supreme court or a high court should not hold the office of profit in the service of pakistan, not being judicial or quasi-judicial office of the chief election commissioner or of a chairman or member of the law commission or of chairman or member of council of islamic ideology before the expiry of 2 years after his retirement.” the cj said: “therefore, no re- tired judge of the superior court shall accept an appointment of an ex-cadre post which is lower than his status, including bank- ing court, customs court, central court, administrative tribunal and federal/provincial service tribunals, etc. “the government may relieve such judges and the judges should also consider resigning from their post. this will be a safeguard against judges of the superior courts as well as subor- dinate courts from being in- duced/influenced for appoint- ment to such posts.” the committee recommended that the trend of retired judicial officers being appointed to spe- cial courts be also discouraged and as per the requirement of principle of independence of ju- diciary, qualified serving judges should be appointed to the posts, in consultation with the chief justice of high court. the independence of judiciary and its separation from the exec- utive and maintaining impartial- ity was a mandate of the constitution, which shall be fully enforced, it stressed. the meeting took notice of in- creasing complaints of corruption amongst judicial officers and court staff and supported the pol- icy of the chief justice of pakistan to show zero tolerance for corruption. it was resolved that the high court would improve the present mechanism/procedure for initiat- ing disciplinary proceedings against corrupt/inefficient judi- cial officers and the matter pref- erably should be taken up to the chief justice of the high court for prompt action against the cor- rupt/inefficient judges/court staff. the committee requested members of the bar and general public to submit credible evi- dence against such corrupt judg- es for prompt action. the meeting decided that a “cell for eradication of corruption from judiciary” under the super- vision of the registrar of the re- spective high court shall be estab- lished. complaints with credible evidence be forwarded to such cell and a copy thereof should be forwarded to the registrar, su- preme court. the committee agreed to pre- pare a comprehensive strategy and scheme for clearance of backlog and expeditious trial pro- ceedings. it resolved that certain cases should be handled on fast track for quick disposal which may include bail matters, stay matters, writ petitions, revisions, family cases, rent cases, cases of juvenile offenders, etc. mr justice haziqul khairi, chief justice of the federal shariat court; mr justice tariq parvez khan, chief justice of the peshawar high court; mr justice amanullah khan, chief justice of the balochistan high court; mr justice anwar zaheer jamali, chief justice of the sindh high court; mr justice khawaja mohammad sharif, chief justice of the lahore high court; and dr faqir hussain, secretary of the committee, attended the meet- ing. the committee also held a spe- cial session which was attended by representatives of the bar in- cluding the president of supreme court bar association, vice chair- man of pakistan bar council, vice chairmen of the four provincial bar councils and presidents of the high court bar associations. the participants agreed with the proposals of the chief justice to ensure that the bench and the bar would work in unison. the representatives of the bar agreed that they would not seek unnecessary adjournments and cooperate with the judiciary in quick dispensation of justice and eradication of corruption. it was resolved that interaction between the bench and the bar would continue and high courts as well as district courts would al- so convene special meetings with the representative of the bar to evolve a strategy for clearance of the backlog and expedite dispos- al of cases.


CJ vows to eradicate corruption from courts
Dawn April 19, 2009

ISLAMABAD, April 18: Chief Justice Iftikhar Mohammad Chaudhry has declared 2009 as the ‘year of justice’ and vowed to eradicate corruption from courts and ensure quick dispensation of justice.Presiding over a meeting of the National Judicial (Policy Making) Committee here on Saturday, he said that after restoration of the judiciary to the pre-emergency position, justice should be extended to the masses.
The two-day meeting was convened by the chief justice to come up with a strategy for quick disposal of cases and dispensation of justice to the litigants by eliminating corruption from the judiciary.
The chief justice sought cooperation from bar associations to achieve this goal.
The meeting was attended by Justice Haziqul Khairi, Chief Justice of the Federal Shariat Court, Justice Tariq Pervez, Chief Justice of the Peshawar High Court, Justice Amanullah Khan, Chief Justice of the Balochistan High Court, Justice Sayed Zahid Hussain, Chief Justice of the Lahore High Court, Justice Anwar Zaheer Jamali, Chief Justice of the Sindh High Court, and Dr Faqir Hussain, Secretary of the Law and Justice Commission.
The meeting called for releasing accused persons involved in bailable offences on personal bond if they are unable to furnish solvent surety. The meeting will continue it deliberations on Sunday.


TCP to submit documents to TIP for vetting
Business Recorder April 15, 2009

ISLAMABAD (April 15 2009): The Chairman of Trading Corporation of Pakistan (TCP), Saeed Ahmad Khan, is said to have decided to submit pre-qualification documents to Transparency International Pakistan (TIP) for vetting. According to an insider, he gave this assurance to a delegation of TIP which met with him in the TCP office in Karachi. The TIP delegation, headed by its Chairman, Adil Gilani, discussed all the wrong doings of TCP former Chairman with the incumbent Chairman. The TCP Chairman assured TI P that all procurements of TCP would be made in accordance with PPRA Rules, in a most transparent, efficient and economical manner, and the practice of matching the highest/lowest bidders was also stopped immediately. TI P Chairman assured full assistance to TCP in capacity building of TCP officers in relation with the understanding of Public Procurement Rules 2004, and finalisation of TCP Procurement Manual. It was agreed that in this regard TI P would hold a workshop for TCP officers on Saturday, April 25, 2009, and pre-qualification documents of TCP would be examined and vetted, to comply with PPRA Rules.


160 govt tenders ‘corrected’ every month: watchdog
Dawn April 13, 2009

KARACHI, April 12: Around 160 tenders for supply of goods and provision of services to various provincial government departments are being “corrected” every month, it has been learnt. According to highly-placed sources, the Sindh Public Procurement Regulatory Authority (SPPRA) was closely scrutinising, on a daily basis, tenders being published by the government. And, they said, it immediately approached the department concerned if it found out that advertisements were not in conformity with the government’s procurement rules, and then the departments were bound to reissue the entire advertisements or if the mistake was minor publish a corrigendum. The sources said that the federal government, on the advice of international donors – the World Bank, Asian Development Bank etc – and international watchdog agencies like Transparency International, had adopted the Public Procurement Regulatory Rules many years ago and the provinces adopted these rules to make their spending transparent. They said that the recently formed Sindh Public Procurement Regulatory Authority was also scheduled to give a presentation regarding its rules to the cabinet, after which it would be tabled in the assembly and later rules would be framed and by the beginning of the next financial year — July 2009 — all spending would be done by strictly following the SPPRA rules and guidelines. Responding to Dawn’s queries SPPRA director Khaqan Murtaza said that the authority had conducted training workshops for officials in nine districts of the province to update them on new rules. He said that the rules were simple and most of the time it was because of ignorance that they were not followed. He said that the SPPRA closely monitored government adver tisements in newspapers on a daily basis and approached the department concerned if any irregularity was found, to get it corrected. He said that on average the SPPRA wrote around 160 letters a month to various government departments regarding irregularities in the tendering process. He said that SPPRA rules guaranteed transparency and open competition among all stakeholders and it opposed prequalification of companies and discouraged the usage of “emergency clause” while making purchases by departments. He said that while these rules put restrictions on one hand, on the other these also provided relaxations as well. He said under the earlier rules for spending up to a certain amount, three quotations were required before giving any contract; under the new rules it was not strictly necessary. He said that while the NWFP was leading in following these new rules, Sindh was in the second position, while Punjab and Balochistan were trailing behind in updating their rules to bring these in conformity with the new rules. He said that the government had to adopt the new rules soon, as after some time all funding coming from international donors had to be spent in accordance with these rules. He said that the Sindh Assembly’s Public Accounts Committee, which was going through the auditor-general’s report, had also sought input from the SPPRA on spending done by the departments and had taken action according to the recommendations of the SPPRA. He said that the SPPRA team, which was headed by managing director Rizwan Ahmed, comprised Farasat Iqbal and himself as directors besides three procurement specialists — Naveed Channa (services), Ali Imam Qadri (goods) and Mohammad Arab Shaikh (works) — and some supporting staff. karachi, april 12: around 160 tenders for supply of goods and provision of services to vari- ous provincial government de- partments are being “corrected” every month, it has been learnt. according to highly-placed sources, the sindh public procu- rement regulatory authority (sppra) was closely scrutinis- ing, on a daily basis, tenders be- ing published by the govern- ment. and, they said, it immediately approached the department con- cerned if it found out that adver- tisements were not in conformity with the government’s procure- ment rules, and then the depart- ments were bound to reissue the entire advertisements or if the mistake was minor publish a cor- rigendum. the sources said that the fed- eral government, on the advice of international donors – the world bank, asian development bank etc – and international watchdog agencies like transparency international, had adopted the public procurement regulatory rules many years ago and the provinces adopted these rules to make their spend- ing transparent. they said that the recently formed sindh public procur- ement regulatory authority was also scheduled to give a presen- tation regarding its rules to the cabinet, after which it would be tabled in the assembly and later rules would be framed and by the beginning of the next finan- cial year — july 2009 — all spending would be done by strictly following the sppra rules and guidelines. responding to dawn’s queries sppra director khaqan murtaza said that the authority had conducted training work- shops for officials in nine dis- tricts of the province to update them on new rules. he said that the rules were simple and most of the time it was because of ignorance that they were not followed. he said that the sppra close- ly monitored government adver- tisements in newspapers on a daily basis and approached the department concerned if any ir- regularity was found, to get it corrected. he said that on average the sppra wrote around 160 letters a month to various government departments regarding irregular- ities in the tendering process. he said that sppra rules guaranteed transparency and open competition among all stakeholders and it opposed pre- qualification of companies and discouraged the usage of “emer- gency clause” while making pur- chases by departments. he said that while these rules put restrictions on one hand, on the other these also provided re- laxations as well. he said under the earlier rules for spending up to a certain amount, three quotations were required before giving any con- tract; under the new rules it was not strictly necessary. he said that while the nwfp was leading in following these new rules, sindh was in the sec- ond position, while punjab and balochistan were trailing behind in updating their rules to bring these in conformity with the new rules. he said that the government had to adopt the new rules soon, as after some time all funding coming from international do- nors had to be spent in accord- ance with these rules. he said that the sindh assembly’s public accounts committee, which was going through the auditor-general’s re- port, had also sought input from the sppra on spending done by the departments and had taken action according to the recom- mendations of the sppra. he said that the sppra team, which was headed by managing director rizwan ahmed, com- prised farasat iqbal and himself as directors besides three pro- curement specialists — naveed channa (services), ali imam qadri (goods) and mohammad arab shaikh (works) — and some supporting staff.


Pak Ministry of Defence Contractors involved in deception and misappropriation
Business Recorder April 1, 2009

ISLAMABAD (April 01 2009): The Public Accounts Committee (PAC) of National Assembly on Tuesday directed Ministry of Defence Production to stop buying from contractors involved in deception and misappropriation. The PAC meeting chaired by its chairman Chaudhry Nisar Ali Khan reviewed the audit reports of the ministry for the year 2005-06.
Audit reports revealed that a loss of Rs 24.960 million was incurred to the government due to two contracts of skimmed milk powder in Pakistan Mission at Paris. It showed that one company failed to provide 500 ton milk powder within stipulated period of time, while 138 tons milk powder out of total 189 provided by the other company was unfit for human consumption.
Nisar directed the ministry to improve the system for awarding the contracts and blacklist the companies failing to deliver. The ministry was also asked to give due importance to the observations of audit authorities.
Earlier, the audit authorities besides other reports informed the PAC panel about unauthorised investment of Rs 90 million government money in profit and loss term deposit scheme by Pakistan Aeronautical Complex, Kamra. Chairman Pakistan Aeronautical Complex, Kamra said that the fund was utilised as it was not meant to be used immediately.
Nisar said that rules and regulations must be followed in any case. He directed the concerned authorities to regularise the matter through Ministry of Defence Production within one month. He also directed Secretary Ministry of Defence Production to ask all the departments under him to inform him about all the legal cases related to contracts with different firms. He also asked him to revisit the contracting system so that in future no contractor can deceive the ministry.


TIP launches legal advice centre
Business Recorder March 26, 2009

KARACHI (March 26 2009): To provide the aggrieved citizens with free legal assistance, the Transparency International Pakistan (TIP) on Wednesday launched an Advocacy and Legal Advice Centre (ALDC) in Karachi. Speaking at a press conference at Karachi Press Club, the Chairman of the Board of Trustees, Syed Adil Gilani said that TIP requests the public to lodge genuine complaints and inform the centre of irregularities of any nature with solid proofs. He said that the TIP expects that the restored Chief Justice of Pakistan (CJP), Iftikhar Muhammad Chaudhry will do justice, as bravely as he had been doing during the martial law regime of Pervez Musharraf. TIP will compile complaints, which will be sent to the CJP for his appraisal on the issues being faced by the people, besides issuing a report after every six months about the numbers of disposed of complaints by the Supreme Court, Gilani pointed out. He said that on the request of TIP, the CJP announced on March 24 to make the judiciary free of corruption. He criticised the role of judiciary in the past, saying that had not the judiciary validated the martial laws, the unconstitutional governments would have never ruled the country for long. Adil Gilani enumerated the aims of the ALAC that include empowerment of citizens to help them access to easy justice and work for resolution of their problems. The centre is providing legal advises and assistance to citizens, undertaking advocacy for broader reforms, taking up the corruption cases with the concerned authorities, besides analysing and disseminating the data collected periodically. The core purpose of opening the centre, he said, is to fight against corruption by involving citizens, provide a deeper understanding to the citizens as to how corruption works practically. The Chairman, TIP hoped that the newly established centre will become an effective tool to curb corruption in the country. He appealed to the citizens to play their role in helping the centre to achieve its goals.


Govt urged to reinstate deposed judges
Dawn March 16, 2009

RAWALPINDI, March 15: The Transparency International Pakistan (TIP) on Sunday called upon the government to reinstate the deposed judges who were unconstitutionally dismissed on November 3, 2007 and immediately lift curbs on media. Syed Adil Gilani, TIP Chairman reminded the government that in the annual meeting of the Transparency International Asia Pacific Chapters comprising 20 countries, held in Manila, had called on the Pakistan government to reinstate the deposed judges. In a statement, he said access to information was the basic requirement of transparency which induces good governance and the rule of law, which are of fundamental importance for Pakistan to develop as a nation and become part of the developed world. It is not the job of a government alone to bring about good governance, but every individual has to strive for this by playing his active role in rooting out corruption from society, he said. In the view of Transparency International Pakistan the termination of these judges critically weakens the effective functioning of the judicial sector. The judiciary is a key institution safeguarding the rule of law, accountability of governing institutions and the prevention of corruption. He reminded all the political parties to fulfil the commitment given to the nation in their election manifesto that “Judiciary shall be fully independent” and that “There will be no discretion in any administrative decision taken by government servants”.


TIP demand reinstatement of deposed judges
Business Recorder March 15, 2009

KARACHI (March 15 2009): Transparency International Pakistan (TIP) has called on the Government of Pakistan to re-instate the deposed judges who were unconstitutionally dismissed on November 3 2007 by Chief of Army Staff General Pervez Musharraf, and immediately stop intervention in media. Its chairman Adil Gilani reminded the government that in the annual meeting of the Transparency International Asia Pacific Chapters, (20 countries), held in Manila, called on the Government of Pakistan to re-instate the deposed judges. He said access to information is the basic requirement of transparency which induces good governance and the rule of law, which are of fundamental importance for Pakistan to develop as a nation and become part of the developed world. It is not the job of a government alone to bring about good governance, but every individual has to strive for this by playing his active role in rooting out corruption from society. In the view of Transparency International, the termination of these judges critically had weakened the effective functioning of the judicial sector. The judiciary is a key institution, safeguarding the rule of law, accountability of governing institutions and prevention of corruption. "It is not news that Pakistan is drowning in corruption due to absence of rule of law," Gilani said. He reminded all political parties to fulfil the commitment given to the nation in their election manifestos that Judiciary shall be fully independent and that There will be no discretion in any administrative decision taken by government servants.-PR


Commissioner Multan signs MoU with TIP
Business Recorder February 22, 2009

MULTAN (February 22 2009): Commissioner Multan has taken the assistance of Transparency International Pakistan (TIP) for transparent tendering. At a simple ceremony on Saturday Commissioner Multan Syed Muhammad Ali Gardezi, signed an MOU with Syed Adil Gilani of TIP. In his speech, Gardezi stated that the Multan Division has been granted a sum of Rs 13.5 billion by the Prime Minister under the Multan Development Package. The Punjab Government has also given Rs 500 million. He said that in order to spend the funds in the most transparent manner with aim to have the best quality construction, at the most economical cost and timely implementation, we have decided to seek assistance of Transparency International Pakistan, whose expert advise will allow us to utilise this fund in the most beneficial manner for the district of Multan. He further said that our aim is to eliminate the corruption from system, and attain zero tolerance towards corruption. He clarified that the services being rendered by TI Pakistan was a public service without any remuneration and the Multan Division will not have to bear any expense. Syed Adil Gilani, in his address, stated that Transparency International Pakistan is striving to curb corruption in the country. To achieve this aim TI Pakistan has signed MOUs with a number of government agencies and are assisting them in preparing tender documents according to the law of the country. He said that a team of experts will form a committee with officials from the Multan Division to prepare a 'Procurement Manual' for the implementation of the Integrity Pact and for transparency in the procurement system. This manual comprises of all the Standard Bidding Documents on procurement of Works, Goods & Services, based on International Standards, the World Bank, FIDIC and Pakistan Engineering Council, duly amended to comply with the Transparent Procurement Procedures, and fully compliant to the Punjab Government Procurement Rules.-PR


Integrity pact' signed for Multan package
Dawn February 22, 2009

RAWALPINDI, Feb 21: The Transparency International Pakistan and the administration of Multan have entered into a memorandum of understanding (MoU) to ensure transparency in the procurement systems for the implementation of the Multan development package. The MoU for the 'integrity pact' was signed by TIP chairman Syed Adil Gilani and Commissioner of Multan Division Syed Mohammad Ali Gardezi at a ceremony on Saturday. Prime Minister Yousuf Raza Gilani and the Punjab government have approved grants of Rs13.5 billion and Rs500 million, respectively, for the development of Multan. According to the documents available with Dawn, the 'integrity pact' is a tool developed by the TIP which ensures that all activities and decisions of public offices are transparent and that the projects and works are implemented, services are provided or taken, and goods or materials are supplied without giving or taking of any kind of benefit, financial or otherwise. Justification for decisions taken is provided without discrimination to all parties concerned. Under the MoU, the TIP will assist the administration of Multan in the transparent preparation of tender documents under the prevailing laws of the country. A team of TIP experts will form a committee with officials from the Multan division to prepare a 'procurement manual' for the implementation of the 'integrity pact' and for transparency in the procurement systems. The commissioner, Multan division, will form a three-member coordination committee which will identify and list all issues of transparency and evaluation of tenders' criteria in the procurement bidding documents, including the discretionary conditions existing in the contract documents and make necessary changes where necessary. The committee will prepare ways and means to be included in contract documents to eliminate and reduce delays to a bare minimum. It will introduce approval systems to process and award contracts, as well as complete the projects at the most economical cost and within the schedule time. The manual will consist of all the standard bidding documents on procurement of works, goods and services based on international standards, the World Bank, FIDIC and Pakistan Engineering Council (PEC), duly amended to comply with the Transparent Procurement Procedures, and fully compliant to the Punjab Government Procurement Rules. Speaking on the occasion, Mr Gardezi said that assistance had been sought from the TIP in order to spend the funds in most transparent manner with the aim to have the best quality construction at the most economical cost and timely implementation of projects under the Multan development package. Mr Gilani said TIP experts would advise the Multan administration on the utilisation of funds in the most beneficial manner. The MoU would ensure preparation of tender documents according to the procurement manual and vetting of the tender documents, he said, adding that the TIP would not be involved in the process of award of contracts


Fourth poster painting competition inaugurated
Business Recorder February 19, 2009

KARACHI (February 19 2009): Regional manager of TCF Schools South Brigadier Anwar Khan, inaugurated the 4th poster painting competition on 'Child's View of Corruption' at the Arts Council on Wednesday. The two-day exhibition was organised by the Transparency International-Pakistan and sponsored by the Swiss Agency for Development and Co-operation (SDC). 950 students from over 39 schools of The Citizens Foundation (TCF) South and South West Zones participated in it. Syed Adil Gilani, Chairman TI-P, gave the opening speech in which he applauded the students for their paintings, each one showing their view on corruption. He stated that corruption undermines democracy, human rights, civil liberties, and sustainable development, all this is a cause poverty and unrest in the society. The next speaker was Brigadier Anwar Khan, regional manager of TCF Schools South. He was pleased with the spirit of competition amongst the students. He stressed that the students should first look where corruption can start with and take means of avoiding it. He stressed that cheating in schools was becoming rampant and they should take care of not getting into this dark pit. All the participants were given certificates and prizes were also given to the best three posters from each school. Out of these winners three outstanding pictures were chosen as top winners. The exhibition is open for public viewing today at the Manzar Akbar Hall, Arts Council of Pakistan. TI-P's aim at conducting this kind of competition is to install within young school children the need to fight corrupt practices, the awareness of its evil influences and it's far reaching effects on our society and the nation as a whole. Curbing corruption is a means for the promotion of democracy and good governance, which would lead, to the improvement of the livelihood of the vast majority of the population. -PR


Exhibition on a child’s perception of corruption
The News February 19, 2009

Getting children to talk about issues that plague our society at a young age is an important way to instill corrective behaviour in the next generation. This was the main philosophy behind the fourth poster painting exhibition by the Transparency International Pakistan (TI) in collaboration with The Citizens Foundation (TCF) held at the Arts Council on Wednesday. The exhibition, inaugurated by Brigadier Anwar Khan, the regional manager of TCF schools - South, was the final stage of an art competition held by the TI Pakistan chapter and TCF, on the theme “Child’s view of Corruption”. In all, over 950 students from 39 different schools under TCF in Sindh (South and South West zones) participated in the competition. Syed Adil Gillani, Chairman TIP, gave the opening speech in which he applauded the students for their endeavour and enthusiasm in participating in the competition. He said that corruption undermines democracy, human rights, civil liberties, sustainable development and was a cause of poverty and unrest in society. Brig Anwar Khan, said that he was pleased with the spirit of the competition. He said that students should concentrate on where corruption originates from and take measures to deal with such temptations. He further said that cheating in schools was becoming rampant and the school administration and students must collectively work to rectify this trend. The first, second and third ranked students of each of the participating schools were given certificates. The exhibition will be open for public viewing at the Manzar Akbar Hall at the Arts Council from 10 am to 5 pm on 18th and 19th February. The project is being funded by the Swiss Agency for Development and Cooperation and the TIP.


For a transparent Pakistan
The Frontier Post November 30, 2008
Mansoor Akbar Kundi

A two-day workshop under Transparency International Pakistan (TI), Pakistan on Youth in Governance on 26-27 November held in B.Z.U, Multan focused on themes on how to make Pakistan a better place to live in.TI is one of the 90 national chapters worldwide of the global organization TI headquartered in Berlin, Germany. Enjoying the autonomy of functions it works as non-political, non-partisan, non-investigating, non-profit organization in collaboration with public and private sectors to fight corruption in non-confrontational approach. Its ultimate vision is to make Pakistan a transparent and less corrupt country for better living ----- a dream for which Pakistan at least was created for. The major finances for the workshop which involved invitation to around 100 students from different colleges and universities of Punjab and their logistics were sponsored by Swiss Agency for Development and Cooperation. The four major sessions focused on the structural and functional factors accountable for Pakistan as one of the leading corrupt and less transparent countries in the world --- and unfortunate for those who love Pakistan and still believes in their lives as coming first. The first session highlighted corruption and political instability, the two variables which correlate. Corruption is a multidimensional term and it exists more or less in every society in comparative terms. Corruption can be political, economic, social, cultural, religious and so on, but if it exceeds can bring chaos and instability in shorter run or longer run at the cost of human happiness and dignity. Dr. Kundi in his presentation said that corruption can simply be defined as the misuse of authority and power by those in office. The phenomenon is not new. Aristotle who is called the founder of political science said that corruption brings perversion to the system and makes it less effective. He writes in his book, Politics "once politicians in office have a number of things in favouring their friends or spiting their enemies out" and this to him brings corruption and instability. Politicians should avoid private gains at public interests. Political instability leads to i.e. crises of Identity, Legitimacy, Participation (political Parties), Representation and Penetration. The crises may exist in any society but depends in which ratio; if ratio exceeds it leads to instability and disintegration. Mr. Rashid Rehman's lecture on Human Rights and its violation necessitated that without human rights no society can progress. Human rights' concept began as the man crawled out of cave and started living in civilizations. There is difference between human rights and fundamental rights, the latter are those which are incorporated in constitution and can be challengeable in courts. The developed world has better list of human rights than the developing or underdeveloped. There is deep correlation between the crisis of political development and the violation of human rights in a state/society. The higher is the ratio of crises the more is found violation of human rights. The leading research at micro and macro level support the hypothesis that a country suffering from the crises of political development are prone to the violation of human rights. The higher is the intensity of crises, the more is violations of rights as existent in case of a large number of underdeveloped and Third World countries. The crises of political development which is an unfortunate existing phenomenon of underdeveloped/developing countries have direct consequences for the infraction of human rights in those societies. The pursuit of human rights being indispensable to mankind as they assure happiness, dignity and development of mankind meets a setback in societies where the crises exist. Dr. Al Kama, professor of political science at BZU and now designate High Commissioner to Bangladesh spoke on the issue of leadership crisis and challenges ahead. Leadership play an important role in the development and disintegration of nations. A nation is born at the hands of revolutionaries, visionaries, and freedom fighters supported by youth and commonfolk; strengthened by leadership, system building and visionaries; and lost at the hands of pseudo politicians and undemocratic forces. Pakistan from the beginning has faced leadership crisis which began due to untimely and early death of Quaid-e-Azam. Today's Pakistan is neither the vision of Choudary Rehmat Ali nor of Quaid-e-Azam, the one they looked for Quaid's vision was secular, democratic and unbiased for the promotion of a state where minorities could live in harmony. His successors pledged their support for the promotion of his ideas where only and only Pakistan comes first with a tolerance and promotion for all sects and classes of society, but showed seeds of distrust and apathy without or little legitimacy in office. A tragedy of the political history of Pakistan remained that during the most of the time of its existence it has been run by the persons who actually themselves entered politics through backdoors or undemocratic means and lacked both legitimacy and sincerity for the promotion of democratic principles. They were neither the outcome of a democratic process nor a popular movement to take up reins of office as the heads of the state. They entered the offices through intricacies, displacement and coups and tried to establish their rules as the Mediaeval reigning Monarchs without allocating a place for the growth of political norms and democratic culture. A nation is built on the aspiration and trust of its people. A nation is neither run nor developed on empty slogans and pseudo politics. We as a nation are 57 years old. The period may not be a long period in the history of nation building, nonetheless, it is sufficient enough to make adequate progress in the development of important infrastructure. China, Malaysia, Indonesia, South Korea etc. achieved nationhood after we did, but have progressed far ahead of us. Mr. Zia ur Rehman, the Chief Executive of Awaz Foundation spoke on the role of community participation which has been the practice of established medieval and modern societies. Islam teaches it as priority which unfortunately has not been practised in many Islamic republics/states. The speaker agreed that the sense of community participation has been vanishing due to populace dependence on government support in rural areas. I agreed with him. Many rural areas in wake of flood or natural disaster would mobilize their own timely efforts to deal with the situation. With one call or beat of drum they would bring their ox driven ploughs and human resource but now they look forward to Nazim or local bodies institutions and fail to understand the necessity of the timely stitch which could save them nine they face few days later. However, a welfare state demands that government does and infuse the sense of community support. Modernization has withered it away with suitable replacement. And corruption ditches its access to general public affected or in need of. The latest example can be of Ziarat earthquake for which huge foreign aid reached but the problem is how far it was effectively utilized. Education being the remedy for many ills of society can raise the sense of community support and put accountability on government. Participated by university and colleges youth there were questions and answers with aggressive comments by the participants who showed that our youth want a change and show discontent with leadership and system. Youth is the future of a nation and higher they are disciplined and motivated with role models the better will be the outcome.


Corruption undermines democracy, human rights, civil liberties
Business Recorder November 28, 2008

KARACHi: Prof Dr Muhammad Zafarullah, Vice Chancellor, }3ahauddin Zakariya University, Multan inaugurated the 5th Youth in Governance Workshop at the Executive Hall of the Institute of Management Sciences. The two-day workshop was organised by the Transparency International - Pakistan and sponsored by the Swiss Agency for Development and Co-operation (SDC). Two hundred students of over 15 institutions from Multan and other Punjab cities participated in the workshop. Corruption undermines democracy, human rights, civil liberties, sustainable development, and is a cause both of poverty and a barrier to overcome. This was said by the Executive Director Saad Rashid of Transparency International Pakistan in his welcome address. He further stated that corruption breeds social, political economic unrest and a denial of human rights. He said that it was of utmost importance to curb corruption for the promotion of democracy and good governance, which would lead to the improvement of the livelihood of the vast majority of the population. Prof Dr Muhammad Zafarullah, the VC of BZU commended the efforts of TI-Pakistan in enhancing awareness of the evils of corruption. He said that education would play a great role in the fight against corruption. —PR


Pakistan ranks 46th out of 180 in corruption
The Financial Daily September 24, 2008

KARACHI: Pakistan is ranked at 46th position among 180 world countries in terms of corruption and corrupt practices. This was stated in a report of Transparency International (TI), which was unveiled by its chairman Syed Adil Gilani here Tuesday in Karachi Press Club during a press conference. He told Somalia and Iraq were the most corrupt countries while Denmark, New Zealand and Sweden were among the most transparent countries where the level of corruption was at lowest ebb. “The level of corruption in indigent countries in fact shows difference between life and death,’ he added. ‘Upsurge in corruption is posing a serious threat to the uplift programs for human being. As per CPI Points of 180 countries for the year 2008, Denmark, New Zealand and Sweden stood atop with highest 9.3 points. Singapore comes close to them with 9.2 points, he added. Somalia lies at the bottom of CPI with 1.0 points. Iraq, Myanmar with 1.3 points and Haiti, With 1.2 points are equating each other on index. A tangible dip is witnessed in terms of the points as per 2007 and 2008 index. Improvement has been registered in the points of Bulgaria, Maldives and Norway among some others. Syed Adil Gi]ani told Pakistan CIP points remained 2.5 in 2008 and it was ranked at 46th in index among the corrupt countries. He stressed the need for establishment of good governance and induction of transparent administration in the country to counter the looming threats of higher inflation, terrorism and unemployment. “Good governance is the only way to extricate the country from the mess it was plunged by the past 10 years of worst ever governance” he informed. He pointed out that corruption has been cited as the major impediment in the way of development of the country. Lack of transparency and corruption hinder the procurement, the report added, and led to infrastructure crunch in water, power and transport sectors. Strict measures were urged to root out corruption from the public institutions and corporations, he remarked. The need is there that evil of abuse of powers for personal gains be eliminated. He informed that preparations of CPI in Pakistan was based on the reviews worked out by Asia Development Bank, IBRD, World Economic Porum, Economic intelligence unit, merchant international group and three other organizations.-Online


Stamping out graft can save lives in poor states: TI
Dawn September 24, 2008

BERLIN, Sept 23: Stopping practices such as cronyism and embezzlement can save lives in poor countries, a graft watchdog said on Tuesday as Somalia, Iraq and Myanmar again came bottom in its global corruption rankings. “In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play,” Transparency International (TI) said. “The continuing high levels of corruption and poverty plaguing many of the world’s societies amount to an ongoing humanitarian disaster and cannot be tolerated,” the non-governmental organisation’s head, Huguette Labelle said. Rampant corruption in low-income countries also jeopardises the global fight against poverty and threatens to derail the UN Millennium Development Goals (MDGs), the report published in Berlin said. “This calls for a more focussed and coordinated approach by the global donor community to ensure development assistance is designed to strengthen institutions of governance and oversight in recipient countries, and that aid flows themselves are fortified against abuse and graft,” TI said. It estimates that unchecked levels of corruption would add $50 billion -- or nearly half of annual global aid outlays -- to the cost of achieving the MDGs on water and sanitation. The African Union has estimated that corruption costs the continent $148 billion annually, equal to the gross domestic product of Kenya, Tanzania and Cameroon combined, TI said. According to TI’s latest Corruption Perceptions Index, the countries worst hit by problems such as back-handers and bribery in 2008 remained Somalia, Myanmar and Iraq. Somalia, the east African nation without a functioning government since 1991, scored just 1.0 point on TI’s range of between zero, which is highly corrupt, and 10, which is very clean. Myanmar, which received international condemnation for its heavy-handed crackdown on protests in September 2007, was on 1.3 points, as was Iraq, five years after a US-led invasion toppled Saddam Hussein. Haiti was on 1.4. The score is based on perceptions of the degree of corruption as seen by business people and country analysts. The places where officials were seen as least likely to line their own pockets were Denmark, Sweden and New Zealand, all sharing first place with a score of 9.3 points, ahead of Singapore in fourth and Finland and Switzerland in joint fifth. In 2007, Denmark, Finland and New Zealand shared the top spot. But TI was also critical of some wealthy nations that registered significant drops in the global rankings, such as Britain, whose score fell to 7.7 points from 8.4 in 2007, and Norway, which dropped to 7.9 points from 8.7. Britain fell to 16th in the rankings from 12th in 2007, and Norway slipped to 14th from ninth. The continuing emergence of foreign bribery scandals indicates a broader failure by the world’s wealthiest countries to live up to the promise of mutual accountability in the fight against corruption, TI said. “This sort of double standard is unacceptable and disregards international legal standards,” said Labelle. “Beyond its corrosive effects on the rule of law and public confidence, this lack of resolution undermines the credibility of the wealthiest nations in calling for greater action to fight corruption by low-income countries.” Substantial improvements in the rankings were recorded for Albania, Cyprus, Georgia, Mauritius, Nigeria, Oman, Qatar, South Korea, Tonga and Turkey. The United States saw its score inch up to 7.3 points from 7.2 points in 2007, putting it at joint 18th place with Japan, whose score fell from 7.5 a year ago. China was on 3.6 points at 72nd, up from 3.5 points and just ahead of India, whose score dropped to 3.4 from 3.5 to put it in 85th position. Russia, in 147th place, also saw its score fall, from 2.3 points to 2.1 points. Germany’s rose to 7.9 from 7.8, putting it in 14th position, while France’s dropped to 6.9 from 7.3, making it 23rd.—AFP


Corruption Perceptions Index
Dawn September 24, 2008

BERLIN, Sept 23: Rankings of 180 nations studied by the Transparency International for its annual Corruption Perceptions Index. The scores relate to perceptions of the degree of corruption as seen by businesspeople and country analysts and ranges between zero, which is highly corrupt, and 10, which is very clean. The scores are tabulated under ranking, country name and score: 1, Denmark, Sweden, New Zealand (9.3); 4, Singapore (9.2); 5, Finland, Switzerland (9.0); 7, Iceland, Netherlands (8.9); 9, Australia, Canada (8.7); 11, Luxembourg (8.3); 12, Austria, Hong Kong (8.1); 14, Germany, Norway (7.9); 16, Ireland, United Kingdom (7.7); 18, United States, Japan, Belgium (7.3); 21, Saint Lucia (7.1); 22, Barbados (7.0); 23, France, Chile, Uruguay (6.9); 26, Slovenia (6.7); 27, Estonia (6.6); 28, Spain, Qatar, Saint Vincent and the Grenadines (6.5); 31, Cyprus (6.4); 32, Portugal (6.1); 33, Israel, Dominica (6.0); 35, United Arab Emirates (5.9); 36, Botswana, Puerto Rico, Malta (5.8); 39, Taiwan (5.7); 40, South Korea (5.6); 41, Mauritius, Oman (5.5); 43, Macao, Bahrain (5.4); 45, Bhutan, Czech Republic (5.2); 47, Malaysia, Costa Rica, Hungary, Jordan, Cape Verde (5.1); 52, Slovakia, Latvia (5.0); 54, South Africa (4.9); 55, Seychelles, Italy (4.8); 57, Greece (4.7); 58, Turkey, Lithuania, Poland (4.6); 61, Namibia (4.5); 62, Samoa, Croatia, Tunisia (4.4); 65, Kuwait, Cuba (4.3); 67, Ghana, Georgia, El Salvador (3.9); 70, Romania, Colombia (3.8); 72, Bulgaria, FYR Macedonia, Peru, Mexico, China, Suriname, Trinidad and Tobago, Swaziland (3.60); 80, Burkina Faso, Brazil, Saudi Arabia, Thailand, Morocco (3.5); 85, Senegal, Panama, Serbia, Montenegro, Madagascar, Albania, India (3.4); 92, Algeria, Bosnia and Herzegovina, Sri Lanka, Lesotho (3.2); 96, Gabon, Mali, Jamaica, Guatemala, Benin, Kiribati (3.1); 102, Tanzania, Lebanon, Rwanda, Dominican Republic, Bolivia, Djibouti, Mongolia (3.0); 109, Armenia, Belize, Argentina, Vanuatu, Solomon Islands, Moldova (2.9); 115, Mauritania, Maldives, Niger, Malawi, Zambia, Egypt (2.8); 121, Togo, Vietnam, Nigeria, Sao Tome and Principe, Nepal (2.7); 126, Indonesia, Honduras, Ethiopia, Uganda, Guyana, Libya, Eritrea, Mozambique (2.6); 134, Nicaragua, Pakistan, Comoros, Ukraine (2.5); 138, Paraguay, Liberia, Tonga (2.4); 141, Yemen, Cameroon, Iran, Philippines (2.3); 145, Kazakhstan, Timor-Leste (2.2); 147, Syria, Bangladesh, Russia, Kenya (2.1); 151, Laos, Equator, Papua New Guinea, Tajikistan, Central African Republic, Cote d’Ivoire, Belarus (2.0); 158, Azerbaijan, Burundi, Congo Republic, Sierra Leone, Venezuela, Guinea-Bissau, Angola, Gambia (1.9); 166, Uzbekistan, Turkmenistan, Zimbabwe, Cambodia, Kyrgyzstan (1.8); 171, Congo-Democratic Republic, Equatorial Guinea (1.7); 173, Guinea, Chad, Sudan (1.6); 176, Afghanistan (1.5); 177, Haiti (1.4); 178, Iraq, Myanmar (1.3); 180, Somalia (1.0).—AFP


Pakistan ranks 45th among most corrupt states: TI
Business RecorderSeptember 24, 2008

KARACHI (September 24 2008): Transparency International's (TI) on Tuesday launched its corruption perception index 2008 (CPI), which indicates that Pakistan is still bogged down in the vicious circle of corruption, being the 45th most corrupt country of the world. Even though the newly democratic government has taken over the office for almost six months, it has yet to draw up a fresh economic plan to avert the inevitable crisis, said Saad Rafique, Executive Director of TI and Syed Adil Gilani, Chairman of TI at a press conference at Karachi Press Club on Tuesday. They said that the country's economic condition is not stable and the government has to act immediately to protect the country from an economic decay. The other notable backsliders in the 2008 CPI indicates that the strength of oversight mechanisms is also at risk among the wealthiest countries. Syed Adil Gilani said that Pakistan needs sincere efforts to apply rules and regulation across the board, to achieve the goal of reducing corruption. A comparative look on Pakistan and India CPI of the last 10 years indicates that the lower the corruption, the better it is for the economy. In 1998 Pakistan and India in CPI ranked as 71 and 66 respectively out of 85 countries surveyed, with a score of 2.7 and 2.9, and in 2008 Pakistan and India are ranked 134 and 85 out of the 180 countries, with a score of 2.5 and 3.6. The difference in corruption ranking between the two countries has increased from 5 in 1998 to 49 in 2008. The present economic status of the two countries confirms that the economic growth is inversely proportional to corruption. In 1998 Pakistan and India FE reserves were US $1.60 billion and US $26 billion, and in 2008 they are US $9.10 billion and US $237 billion. In the last ten years the gap in India and Pakistan FE reserves increased, from 16 times in 1998 to 26 times in 2008. In 1998 Pakistan trade deficit was US $3.20 billion, whereas in only the first two months of July-August 2008, it is US $3.52 billion. Syed Adil Gilani said that Pakistan ratified the United Nations Convention Against Corruption (UNCAC) on August 9, 2007, which requires Pakistan to establish and promote effective practices aimed at the prevention of corruption, periodically evaluate relevant legal instruments and administrative measures with a view to determining their adequacy to fight and prevent corruption. Pakistan has not initiated any reform to ease out regulatory burden of doing business during the last one year, as declared by the World Bank in its report 'Doing Business 2009' where the country scored 77 among 181 world nations. In 2005 Pakistan scored 10 among 180 countries. Pakistan needs immediate enforcement of good governance and transparent administration to counter the acute problems, like increase in terrorism, hyper inflation, reduction in KSE 100 index by 36%, from 14,500 on 2nd November 2007, to 9346 on 5th September 2008, 20% devaluation in currency, US $ increases from Rs 64 to Rs 77, and reduction of foreign currency reserves from US $16.6 billion to US $9.10 billion inherited due to the bad governance of last the 10 years. A World Bank (WB) latest report enlists corruption as one of the core reasons that hinders the development drive in Pakistan (Lack of transparency and corruption, delays in procurement), which is also suffering from dearth of infrastructure in the water, irrigation, power and transport sectors. In the Executive Summary in the assessment of Pakistan Infrastructure Implementation Capacity (PIICA), which was carried out at the request of the GoP, jointly by the World Bank and the Planning Commission of Pakistan, and a report was released on 8th February 2008, been confirms that about 15 % of Pakistan Development Budget of 2007-8 is the cost of corruption in the procurement side alone. This amounts to over Rs 150 billion. Political will, judicial independence and effective non-discriminatory accountability mechanism for those civil/defence departments not complying with the procedures, including privatisation, and Public Procurement Rules 2004, as well as the public corporations and authorities, are urgently needed to successfully combat corruption which is defined as "Misuse of Authority for personal gain". The CPI 2007 is based on the data primarily from the past two years, relating to perceptions that may have been formed even farther in the past. Pakistan CPI is based on the surveys conducted by the Asian Development Bank, IBRD, World Economic Forum, Economic Intelligence Unit, Merchant International Group and three other organisations. Syed Adil Gilani said Pakistan at present needs rebuilding, which can only be achieved with good governance, political will, judicial independence and effective non-discriminatory accountability mechanism for those civil/defence departments not complying with the procedures, including privatisation, and full attention to addressing the economic issues, ways to adjust bank interest rates, streamlining the fuel and energy supply arrangements and rationalisation of tariff, transparent implementation of system by regulatory authorities, SECP, PPRA, EPA, SBP, OGRA, PEMRA, PTA, PFRA etc in order to restore investor's confidence. RESULTS: The Transparency International CPI measures the perceived levels of public sector corruption in a given country and is a composite index, drawing on different expert and business surveys. The 2008 CPI scores 180 countries (the same number as the 2007 CPI) on a scale from zero (highly corrupt) to ten (highly clean). Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Myanmar at 1.3 and Haiti at 1.4. Score changes in the index are not rapid, however, they are statistically significant changes as evident in certain countries from high to low end of the CPI. Looking at source surveys, included in both the 2007 and 2008 indexes, significant declines can be seen in the scores of Bulgaria, Burundi, Maldives, Norway and the United Kingdom. Similarly, statistically significant improvements over the last year can be identified in Albania, Cyprus, Georgia, Mauritius, Nigeria, Oman, Qatar, South Korea, Tonga and Turkey. The weakening performance of some wealthy exporting countries, with notable European decliners in the 2008 CPI, casts a further critical light on government commitment to rein in the questionable methods of their companies in acquiring and managing overseas business, in addition to domestic concerns about issues such as the role of money in politics. The continuing emergence of foreign bribery scandals indicates a broader failure by the world's wealthiest countries to live up to the promise of mutual accountability in the fight against corruption.


Pakistan improves ranking to become 46th most corrupt country
Daily Times September 24, 2008

KARACHI: Pakistan improved slightly its ranking on Transparency International’s Corruption Perceptions Index (CPI) released on Tuesday, and is now the 46th most corrupt country in the world. “Pakistan has improved its ranking jumping from 138th of 180 countries to 134th, but the government still needs to save the country from a disaster,” Transparency International Pakistan Chairman Adil Gillani said during a press conference at the Karachi Press Club. The CPI measures perceived levels of public sector corruption in a country and is a composite index based on surveys among experts and businessmen. The 2008 CPI scored 180 countries on a scale from zero (highly corrupt) to ten (highly clean). For the second year running, Somalia, Myanmar and Iraq received the poorest marks, with Somalia scoring 1.0 and Myanmar and Iraq scoring 1.3 each. Denmark retained its ranking as the world’s least corrupt nation, alongside Sweden and New Zealand. All scored 9.3. “An analysis of Pakistan and India’s CPIs for the last 10 years shows a strongly inverse relationship between perceived corruption levels and the economy,” Gillani added. “In 1998, Pakistan and India’s reserves were at $1.6 billion and $26 billion respectively and in 2008 they are at $9.1 billion and $237 billion respectively,” Gillani said, adding that besides an increase in the gap of foreign reserves of Pakistan and India, Pakistan’s trade deficit has also increased manifold. Gilani said that despite ratifying the UN Convention Against Corruption (UNCAC) on August 9, 2007, Pakistan has not initiated any reform to ease out the regulatory burden of doing business in the last one year. “The country needs immediate enforcement of good governance and a transparent administration to counter the acute problems of terrorism, hyperinflation, reduction of the KSE-100 index, the 20-percent devaluation in currency and the increase in the dollar’s value from Rs 64 to Rs 77 due to the bad governance during the last 10 years,” he said. Gilani said the target of rebuilding the country can only be achieved with good governance, strong political will, judicial independence and an effective accountability mechanism for the civil and defense departments and also paying full attention to economic woes, “Transparent implementation of the system by the regulatory authorities like SECP, State Bank, PEMRA, PTA, OGRA and Environment Protection Agency is also needed if the present government wants to put the country and the economy on a sustainable track,” he added.


Pakistan 46th most corrupt country
The Nation September 24, 2008

ISLAMABAD - Transparency International (TI) ranked Pakistan as the 46th most corrupt country out of 180 on the globe, fearing continuous high corruption in low-income countries may amount to an “ongoing humanitarian disaster”. Similarly, India has been ranked as the 22nd most corrupt nation in the world, while corruption in Bangladesh has increased despite an anti-graft drive launched by the country’s army-backed government. In low-income countries, rampant corruption jeopardizes the global fight against poverty, threatening to derail the UN Millennium Development Goals (MDGs), states TI 2008 Corruption Perception Index (CPI) released here on Tuesday from its headquarters in Berlin, Germany and Pakistan. Pakistan in 2008 Corruption Perceptions Index Score is 2.5. Out of 180 countries, it is ranked as the 46th most corrupt country in the world, the report said. With countries such as Somalia and Iraq among those showing the highest levels of perceived corruption, Transparency International’s (TI) 2008 CPI highlighted the fatal link between poverty, failed institutions and graft. But other notable backsliders in the 2008 CPI indicate that the strength of oversight mechanisms is also at risk among the wealthiest. “In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play,” said Huguette Labelle, Chair of Transparency International. “The continuing high levels of corruption and poverty plaguing many of the world’s societies amount to an ongoing humanitarian disaster and cannot be tolerated. But even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed.” According to the TI 2008 CPI results, the Transparency International CPI measures the perceived levels of public-sector corruption in a given country and is a composite index, drawing on different expert and business surveys. The 2008 CPI scores 180 countries (the same number as the 2007 CPI) on a scale from zero (highly corrupt) to ten (highly clean). Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Myanmar at 1.3 and Haiti at 1.4. While score changes in the Index are not rapid, statistically significant changes are evident in certain countries from the high to the low end of the CPI. Looking at source surveys included in both the 2007 and 2008 Index, significant declines can be seen in the scores of Bulgaria, Burundi, Maldives, Norway and the United Kingdom.


Pakistan 46th most corrupt country in the world: TI index
The News September 24, 2008

Pakistan is facing an “ongoing humanitarian disaster” being a persistent high-corruption country with low income according to the latest Corruption Perception Index (CPI) launched on Tuesday. Pakistan ranks 134 out of 180 countries on the index. This was revealed at a press conference held by Transparency International Pakistan at the Karachi Press Club (KPC) on Tuesday. “In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play,” said Huguette Labelle, Chair of Transparency International. “The continuing high levels of corruption and poverty plaguing many of the world’s societies amount to an ongoing humanitarian disaster and cannot be tolerated. But even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed.” The Transparency International CPI measures the perceived levels of public-sector corruption in a given country and is a composite index, drawing on different expert and business surveys. The 2008 CPI scores 180 countries (same number as in 2007 CPI) on a scale from zero (highly corrupt) to ten (highly clean). Pakistan’s 2008 CPI score is 2.5 out of 10. Of the 180 countries, Pakistan is ranked as the 46th most corrupt country in the world. In low-income countries, rampant corruption jeopardises the global fight against poverty, threatening to derail the UN Millennium Development Goals (MDGs). Syed Adil Gilani, Chairman TI Pakistan said that Pakistan needed sincere efforts to apply rules and regulations across the board, to achieve the goal of reducing corruption. He added that Pakistan had ratified the United Nations Convention Against Corruption (UNCAC) on August 9, 2007, which requires Pakistan to establish and promote effective practices to prevent corruption, periodically evaluate relevant legal instruments and administrative measures with a view to determining their adequacy to prevent and fight corruption. Pakistan has not initiated any reform to ease out regulatory burden of doing business during the last one year, as declared by the World Bank in its report ‘Doing Business 2009’ where the country scored 77 among 181 world nations. In 2005 Pakistan scored 10 among 180 countries. Pakistan needs immediate enforcement of good governance and a transparent administration to counter acute problems, like increasing terrorism, hyper inflation, reduction in the KSE 100 index by 36 percent, from 14,500 on 2nd Nov 2007, to 9,346 on 5th September 2008. A 20 percent devaluation in currency, as the US$ increases from Rs64 to Rs77, and a simultaneous reduction of Foreign Currency reserves from US$16.6 billion to US$9.10 billion due to bad governance over the last 10 years. A fresh World Bank (WB) report tips corruption as one of the core reasons to hinder the development drive in Pakistan (lack of transparency and corruption, delays in procurement) , which is also suffering from dearth of infrastructure in the water, irrigation, power and transport sectors. In the Executive Summary in assessment of the Pakistan Infrastructure Implementation Capacity Assessment (PIICA) which was carried out at the request of the Government of Pakistan, jointly by the World Bank and Planning Commission of Pakistan, report released on 8th February 2008, read it has been confirmed that about 15 percent of Pakistan Development Budget of 2007-8. is the cost of corruption in procurement alone. This amounts to over Rs150 billion. Political will, judicial independence and effective non-discriminatory accountability mechanism for those civil/defence departments not complying with the procedures including privatisation, and Public Procurement Rules 2004, as well as the public corporations and authorities, are urgently needed to successfully combat corruption which is defined as “Misuse of Authority for personal gain”. The CPI 2007 is based on data primarily from the past two years, relating to perceptions that may have been formed even further in the past. Pakistan CPI is based on the surveys conducted by Asia Development Bank, IBRD, World Economic Forum, Economic Intelligence Unit, Merchant International Group and three other organisations. Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Myanmar at 1.3 and Haiti at 1.4. While score changes in the Index are not rapid, statistically significant changes are evident in certain countries from the high to the low end of the CPI. Looking at source surveys included in both the 2007 and 2008 Index, significant declines can be seen in the scores of Bulgaria, Burundi, Maldives, Norway and the United Kingdom. Similarly, statistically significant improvements over the last year can be identified in Albania, Cyprus, Georgia, Mauritius, Nigeria, Oman, Qatar, South Korea, Tonga and Turkey.


Corruption is cause of poverty, barrier to its removal: expert
Dawn August 27, 2008

HYDERABAD, Aug 27: Corruption is both a cause of poverty and a barrier to overcome it, trapping millions in an unending cycle of misery and breeding social, economic and political unrest, says chief executive of Transparency International Pakistan, Karachi, Saad Rasheed. He said at a two-day workshop on “Youth in Governance” organised by his organisation in collaboration with the University of Sindh and Higher Education Commission on Tuesday that corruption denies the poor basic means of survival, forcing them to spend more of their income on bribes. He said that human rights, too, are denied where corruption is rife because a fair trial comes with a hefty price tag where courts are corrupted. “We are all aware of the evils of corruption, which seems to be increasing day by day,” he remarked. He said that it was a cross-cutting issue which if not addressed would fundamentally affect any attempt to promote a culture of respect for human rights or improvement in democratic reform process and good governance. Mr Saad said that corruption distorts decision-making process and directly leads to absence of equal protection under the law, which becomes secondary to private interests of individuals and groups and undermines the very foundations of transparent governance – a prerequisite for democratic health and respect for human rights. He said that the society must, therefore, demand good governance, rule of law, accountability and a code of conduct and ethics in government, independence of judiciary, an end to VIP culture and ‘one law for you and one law for me’ attitude of the government, waste of public funds and ensure that the funds were spent on improving quality of life of the ordinary citizens. Mr Saad said that his organisation was fighting against corruption and bringing people together in a worldwide coalition to end the devastating impact of corruption on men, women and children around the world. The vice-chancellor of the University of Sindh, Dr Mazharul Haq Siddiqui, who spoke as chief guest said that education, merit and justice were fundamentally important for sustainable development of society. He said that cardinal principles of good governance were transparency, accountability and a system of check and balance. The governance did not relate to government or public sector only it also covered society as well as organisations, he said. He said that the Sindh University had developed a system to enrol students and select faculty only on merit under a transparent system. Quality leadership in all fields could be raised only through quality education, he said. Pakistan was not poor in natural resources, he said, adding that Japan was spending twice as much as all the Muslim countries combined on education. Dr Asadullah Kazi, vice-chancellor of Isra University, Dr Rafia Ahmed Shaikh, pro-vice chancellor of SU, Dr Mansoor Kundi, dean of Languages of the University of Balochistan, Ms Hanifa Kazi and Umera Samreen also delivered lectures.


Workshop on 'Youth in Governance' held in Sindh University
Business Recorder August 27, 2008

HYDERABAD (August 27 2008): The Vice Chancellor, Sindh University (SU) Mazharul Haq Siddiqui, has said that education, merit and justice are essential factors for sustainable development and prosperity in the society. He was speaking as chief guest in an inaugural session of two-day workshop on 'Youth in Governance' held by Transparency International Karachi (TIK) in collaboration with University of Sindh and Higher Education Commission (HEC) on Tuesday. The vice chancellor said that only transparency and accountability could ensure good governance, which could not be achieved without evolving proper check and balance system, as it eventually leads to establish fair merit and justice system in the society. He said that SU has developed a system to enrol students on merit bases and selection of faculty is also made only on merit through transparent system. Moreover, he said that quality leadership could not be achieved without producing quality mindsets, which can only be possible through providing quality education. Meanwhile, he stressed on the proper utilisation of all available resources, including human resources to establish a system of merit and justice in the society. Speaking on the occasion the Chief Executive of Transparency International Karachi, the global civil society organisation, Saad Rasheed said that their organisation is fighting against corruption, by evolving a transparent system in the society. He said that corruption has dire global consequences, trapping millions in poverty and misery and breeding social, economic and political unrest and added that Corruption is both a cause of poverty, and a barrier to overcoming it. It is one of the most serious obstacles to reducing poverty. He said that we must therefore demand good governance, the rule of law, accountability and a code of conduct and ethics in government, the independence of the judiciary, an end to the VIP culture and the 'one law for you and one law for me' attitude of the government and the waste of public funds and ensure that it is spent on improving the quality of life of the ordinary citizens. On its first day of the workshop in other session Dr Asadullah Kazi Vice Chancellor Isra University, Dr Rafia Ahmed Shaikh Pro-Vice Chancellor University of Sindh, Dr Mansoor Kundi Dean of Languages University of Balochistan, Hanifa Kazi, Miss Umera Samreen and other scholars also delivered their lectures.


Transparency International Pakistan urges political parties to work together
Business Recorder August 26 ,2008

KARACHI (August 26 2008): Transparency International (TI) Pakistan congratulates coalition partners and the nation on the successful elimination of eight and half years of dictatorial regime, and peaceful transaction from army rule to democracy in Pakistan, which will be completed with the election of new President on 6th September 2008. Ex president had instituted a good practice when on 1st November 1999, he declared his assets. TI Pakistan recommends that he should now declare his assets after he resigned on 18th August 2008. This practice, which is constitutional requirements for all parliamentarians, shall also be adopted by non-parliamentarian, ministers, advisors, governors and the President. Transparency International Pakistan believes that even the worst democracy is better than the best dictatorship, as the accountability mechanism is in-built in the democratic system, in which three pillar for government, Legislature, Executive and Judiciary work within the frame work allowed under the constitution. Syed Adil Gilani, Chairman, TI Pakistan said that Pakistan at present is facing many acute problems, like increase in terrorism, hyper inflation, reduction in KSE 100 index by 32 percent, from 14,500 on 2nd November 2007, to 9,754 on 25th August 2008, 20 percent devaluation in currency. US dollar increases from Rs 64 to Rs 77, and reduction of foreign currency reserves from US dollars 16.6 billion to US dollars 9.5 billion and the huge trade deficit, inherited due to the policies of the previous government. He said that all political parties should work together for strengthening of the democratic government, and forget their differences for the sake of Pakistan at this point of time. Pakistan at present needs good governance, and full attention on addressing economic issues, ways to adjust bank interest rates, streamlining the fuel and energy arrangements and rationalisation of tariff, transparent implementation of system by regulatory authorities, SECP, PPRA, SBP, Ogra, Pemra, PTA, PFRA etc in order to restore investor's confidence. Pakistan cannot afford protest rallies by anyone, like transporters, civil society, etc TI Pakistan appeals to the government to immediately restore the 2nd November 2007 judiciary as all the political parties are committed to the restoration. Further delay of even one day may cause such colossal damage to the country, which may be unthinkable.-PR


Musharraf asked to declare assets
Dawn August 25, 2008

RAWALPINDI, Aug 25: The Transparency International (TI) Pakistan has demanded that former president Gen (retired) Pervez Musharraf should now declare his assets after resigning on August 18. In a statement, TI Pakistan Chairman Syed Adil Gilani said the former president had instituted a good practice when he had declared his assets on November 1, 1999. “TI recommends that he should now declare his assets after his resignation,” Mr Gilani added. He said this practice, which was a constitutional requirement for all parliamentarians, should also be adopted by advisers, governors and the president. He congratulated the government and the nation on “the successful elimination of eight and half years of dictatorial regime and peaceful transaction from army rule to democracy in Pakistan.” Transparency International Pakistan believes that even the worst democracy is better than the best dictatorship, as the accountability mechanism is in-built in a democratic system, in which three pillars for government – Legislature, Executive and Judiciary – work within the framework allowed under the constitution, he said. The TI chairman said Pakistan at present was facing many acute problems like increase in terrorism, hyper inflation, downward slide in KSE-100 Index, devaluation, dwindling foreign exchange reserves and the huge trade deficit. Mr Gilani said all political parties should work together to strengthen the democratic government, and forget their differences for the sake of Pakistan. Pakistan at present needs good governance, and full attention on addressing economic issues, ways to adjust bank interest rates, streamlining the fuel and energy arrangements, rationalisation of tariff, and transparent implementation of system by regulatory authorities in order to restore investor's confidence. Pakistan cannot afford protest rallies by anyone, he said, adding that this could only happen when all parties work for the common cause of nation building. “TI Pakistan appeals to the government to immediately restore the November 2, 2007 judiciary as all the political parties are committed to the restoration. Further delay of even one day may cause such colossal damage to the country which may be unthinkable,” Mr Gilani noted. He reminded the political parties of the commitment made to the nation in their election manifesto, i.e. “judiciary shall be fully independent”.


Corruption high, governance low, where do we go?
Business Recorder July 2,2008

Among numerous disturbing news reports that one sees every day, there are two that I have picked up for this column today. The first is a World Bank report which says “Governance has deteriorated in Pakistan” and the second news report says that “Corruption in 3 years increased by 100 percent: TI report”. Both these reports, in varying lengths of detail appeared last week, and what has, disappointed me is that they have not received the focus and the concern that they have done on some occasions in the past The media reporting of these was traditional, functional and the impact was more ceremonial than anything else. The attitude was one of nonchalance, perhaps, and a certain cynicism as if to say that we have heard this before. Heard what before? That governance in Pakistan deteriorated, and this time the World Bank is being quoted. And that corruption in three years has risen by 100 per cent. And the Transparency International is stating this. Not just these two organizations, but several others have been making these observations making one wonder about the extent to which Pakistan’s policy and decision- makers are uncomfortable and embarrassed about them. At the end of the day, does it matter or do we reconcile to it all? But that is one dimension to corruption and governance, and I am sure that there is a relationship between the two. What has perhaps, and I repeat perhaps, escaped the vigilance of the investigating minds, is why is governance so poor in this country? Why does it continue to slide down, for all the investment in technology and equipment that has been steadily moving into this society? Why are the individual and collective attitudes of people who work for a living so professional? Why don’t people want to work happily, effortlessly and realize that they are paid for the job they have? The news report about the governance deterioration in Pakistan began thus: “The rhetoric of the previous regime about good governance has been exposed by the Word Bank report ‘Governance Matters VII’ that states that governanc in Pakistan deteriorated to the lowest ebb in 2007 than a decade ago”. The latest governance indicators evaluated by the World Bank for all its member countries, include voice arid accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law and control of corruption. On almost all counts the governance was better in 1998 than in 2007. In fact, Pakistan’s governance level was much lower than India and China’s, and in some cases even below Bangladesh.” It is pertinent to mention here that the subject of good governance is a favourite with senior managements in the private and public sectors - and in the recurring rhetoric of former prime minister Shaukat Aziz there was such rampant use of this concept that it lost its meaning altogether. Even in corporate circles good governance is a cliché, much relied upon. The sad part of this is that efficiency is almost non-existent as a reliable, consistent factor in our personal and official lives. Why is this so? One can understand why corruption will just not decline, leave alone go away from Pakistan society. Even the younger people now uphold this flouting of rules, and misuse of authority and power in reality (with everybody upholding integrity in theory). There are given a host of reasons why corruption is rampant. Unrealistically low salaries, the greed of the needy and the greed of the affluent and so on. Governments have their own theories, and alibis about corruption, and amusingly all governments claim that corruption has declined. The previous government used to say that there was no corruption at the top, and how credible that was something that we all know. Corruption around us has so many deceiving faces at times, and at other times it is so obvious that it is considered as an integral part of the system. At the end of the day, the system has not changed. Which also means that the official rhetoric also remains steadfast. And obviously credibility remains minimal, if at all. And that elusive reality of good governance? The World Bank and other such institutions, here and abroad, keep observing that governance is disappearing from Pakistani society. It would be interesting to know how our psychologists and sociologists look at this problem. Whether it is the educated professional or the skilled, semi-skilled, and unskilled employees, the factors that converge to bring about good governance are put aside. They just don’t matter. It is not just a matter of Pakistan’s image that good governance is needed today. The country’s image is rock bottom on so many counts as is well known. Good governance is a hard reality that we have to accept, own, and embrace, given the rising costs of living. It is something that is desperately needed. It is required both in the office and at home, I dare- say. I am appalled at the extent to which families poorly manage their domestic budgets, when simple common sense alone would improve the quality of life at home. This is a subject that needs to be talked about often. But more than that I would like to have the sociologists and the psychologists examine the attitudes that discourage the Pakistani from being efficient, especially at the workplace There is something in the mindset that needs to be examined thoroughly, so that the minefields of inefficiency and concealed corruption are known. That would be amongst the first steps to bringing about the changes that this society needs. One has read with fear and disappointment that “Pakistan is drowning in corruption due to the absence of the Rule of Law”, said Syed Adil Gilani, Chairman of the Transparency International Pakistan, in a report in this daily on 27th June 2008. The TI report, is truly depressing.


Corruption in 3 years increased by 100pc: TI Report
Business Recorder June 27,2008

KARACHI: Transparency International (TI) Global Corruption Report 2008 released on June 25, 2008 analyses corruption affects all aspects of the water sector, from water resources management to drinking water services, irrigation and hydropower. Syed Adil Gilani Chairman, TI Pakistan said that Corruption in Pakistan Water Sector since decades has been one of the major cause of slow economic development, shortage of power, irrigation as well as potable water. Water & Power Development Authority (WAPDA) is responsible for major development, operation, distribution and maintaining Dams, Barrages, Irrigation System, Hydropower Plants as well as Thermal Power Plants. Pakistan’s Indus Basin Irrigation System, the world’s largest water diversion scheme with more than 1.6 million kilometers of watercourses, is a prominent example of how corruption pervades economic development and distorts the priorities of infrastructure investment, rather than counteract the pervasive dynamics of corruption. Pakistan’s water sector, like many of those around the world, is fraught with large and small-scale corruption. According to a 2003 and 2006 survey by Transparency International, Pakistan’s Water and Power Development Agency is perceived to be the second most corrupt institution in the country. Close to half of the more than 31,000 complaints received by Pakistan’s anti-corruption ombudsman in 2002 were related to this one institution. He quoted the World Bank Pakistan water strategy report 2005 admits that top positions in the country’s water bureaucracy are sold at a high price. Global Corruption Report 2008 reveals that there are several encouraging initiatives from all over the world that demonstrate success in tackling water corruption. This is the pivotal message that more than twenty experts and practitioners emphasise in this report. The second part of the Global Corruption Report 2008 provides a snapshot of corruption- related developments in 35 countries from all world regions. Pakistan Country report compomrise legal and institutional chances in 2007, application of Public Procurement Rules in Sindh, and judicial crisis occurred due to March 9, 2007 action against Chief Justice lftikhar Muhammad Chaudhry and army’s role in various civilian sectors. The report talks about the incident where Justice Iftikhar Chaudhry had reversed the privatisation of Pakistan Steel Mills to friends of highest government functionaries and actively pursued the case of the several hundred ‘missing persons’. Since his appointment in June 2005 Chief Justice Chaudhry had worked to clear the backlog of cases before the Supreme Court, then standing at 25,808. He had demonstrated an independence of mind that had been missing from the Supreme Court since 1999, when General Musharraf, having taken power, demanded that judges approve a Provisional Constitutional Order barring the court from challenging his authority on constitutional grounds. This they did. TI Pakistan conducted its second National Corruption Perceptions Survey from April to July 2006 indicated that the majority of respondents were of the view that corruption in Pakistan in last three years increased by 100 percent. “Pakistan is drowning in corruption due to the absence of Rule of Law,” said Syed Adil Gilani, Chairman of TI Pakistan. He reminded the political parties to fulfill the commitment given to the nation in their election manifesto that “Judiciary shall be fully independent” and that “There will be no discretion in any administrative decision taken by government servants”. —PR


Musharraf liquidated Islamabad farmland
The Nation June 26, 2008

ISLAMABAD Transparency International Global Corruption (TIGC) Report 2008 Wednesday revealed that President Pervez Musharraf has converted army- granted farmland worth US$690,000 in Islamabad into US$10.34 million of moveable assets. According to the TIGC Report 2008 analysis,” the scale of the inroads made by the military into ‘civilian sectors of Pakistan’s economy, including land, construction, property, manufacturing fertilizers, agriculture, road building, trucking etc; and that full generals enjoy individual wealth in excess of US$8.3 million,” TI Pakistan conducted its second National Corruption Perceptions Survey from April to July 2006, indicating that the majority of respondents were of the view that corruption in Pakistan in the last three years increased by 100 percent. The report talks about the incident where Chief justice Iftikhar Muhamrnad Chaudhry had reversed the privatization of Pakistan Steel Mills to friends of highest government functionaries and actively pursued the case of the several hundred ‘missing persons’ since his appointment in June 2005. Chief Justice Ifitikhar Muhammad Chaudhry had worked to clear the backlog of cases before the Supreme Court, then standing at 25,808. He had demonstrated an independence of mind that had been missing from the Supreme Court since 1999, when General (Retd) Mtisharraf, having taken power, demanded that judges approve a Provincial Constitutional Order barring the court from challenging his authority on constitutional grounds, the report said.


Pakistan faces serious corruption challenges in near future
Business Recorder June 12,2008

KARACHI (June 12 2008): As diverse sectors of Pakistani society unite to demand restoration of pre-November 3, 2007 judiciary across the country and have started a long march, Transparency International Pakistan lends its support and voice to the demands for the restoration of pre-November 3, 2007 judiciary and draws attention to the fact that rampant corruption weakens most pillars of a democratic society. On June25, Transparency International (TI) will release the Global Corruption Report (GCR) 2008: Corruption in the water sector includes 35-country reports. Among them is a report on Pakistan which documents and analyses military's role in land-grabbing, the legal and institutional changes in 2007, the application of public procurement rules and the judicial crises from 2007. The GCR 2008 also expands on the scale of the inroads made by the military into 'civilian' sectors of Pakistan's economy. "It is not news that Pakistan is drowning in corruption due to absence of rule of law," said Adil Gilani, chairman of TI Pakistan. He reminds the political parties to fulfil the commitment given to the nation in their election manifesto that 'Judiciary shall be fully independent', and that 'There will be no discretion in any administrative decision taken by government servants'. On water corruption, the GCR quotes cases involving millions of dollars and the irregular procurement practices involved. TI Pakistan has dealt with corruption in the water sector before. An 'Integrity Pact' was signed between the Karachi Water and Sewerage Board and TI Pakistan in relation to the awarding of contracts for a major water project in the city. As a result, a clean and open bidding process, monitored by TI, took place, saving in the Consultancy Contract for K-III Project entity more than $3.1 million. This dramatic result emerged directly after the introduction of the no-bribes TI Integrity Pact in Pakistan Procurement Rules 2004. TI Pakistan's second National Corruption Perceptions Survey from 2006 indicated that the majority of respondents were of the view that corruption in Pakistan had increased by 100 percent since 2002. Recently, the annual meeting of Transparency International (TI) Asia Pacific chapters, held in the Philippines, called on the Government of Pakistan to reinstate the deposed judges who were unconstitutionally dismissed on November 3, 2007. Promoting judicial integrity is a vital principle contained in the United Nations Convention against Corruption (UNCAC), to which Pakistan is a state party.-PR


Judiciary should be restored: TI
The News June 12, 2008

Lending its support and voice to the demand for the restoration of pre-November 3, 2007 judiciary, Transparency International (TI) Pakistan called attention to the fact that rampant corruption and absence of rule of law weakens most pillars of a democratic society that the current government must prevent from happening. . Referring to the facts from the Global Corruption Report (GCR) 2008: Corruption in the Water Sector, which includes 35 country reports and is due to be released on June 25 this year, TI stated that the military’s role in land-grabbing, legal and institutional changes in 2007, the application of public procurement rules and the judicial crises from 2007 are some of the issues analysed in detail in the report. The GCR 2008 also expands on the scale of the inroads made by the military into ‘civilian’ sectors of Pakistan’s economy. “It is not news that Pakistan is drowning in corruption due to absence of rule of law,” said Adil Gilani, Chairman TI Pakistan. He reminded the political parties to fulfill the commitment given to the nation in their election manifesto that “judiciary shall be fully independent” and that “there will be no discretion in any administrative decision taken by government servants” as the country faces serious corruption challenges in the coming years. On water corruption, the GCR quotes cases involving millions of dollars and the irregular procurement practices they involved. The TI Pakistan has dealt with corruption in the water sector before. An ‘Integrity Pact’ was signed between the Karachi Water and Sewerage Board (KWSB) and TI Pakistan, in relation to the awarding of contracts for a major water project in the city. As a result a clean and open bidding process, monitored by TI, took place, savings in the Consultancy Contract for K-III Project entity more than US$3.1 million. This dramatic result emerged directly after the introduction of the no-bribes TI Integrity Pact in Pakistan Procurement Rules 2004. The TI Pakistan’s second National Corruption Perceptions Survey from 2006 indicated that the majority of respondents were of the view that corruption in Pakistan had increased by 100 per cent since 2002. Recently, the Annual Meeting of the TI Asia Pacific chapters, held in the Philippines, called on the Government of Pakistan to reinstate the deposed judges who were unconstitutionally dismissed on November 3, 2007. Promoting judicial integrity is a vital principle contained in the United Nations Convention against Corruption (UNCAC), to which Pakistan is a state party.


Pindi govt to activate online complaint cell from 20th
Dawn June 7,2008

RAWALPINDI, June 6: The city district government, in collaboration with the Transparency International Pakistan, will make functional from June 20 an “Online Complaint Cell” to bring good governance and check corruption, District Coordination Officer (DCO) Jamal Mustafa Syed told Dawn on Thursday. Transparency International (TI), the global civil society organisation primarily dedicated to fight corruption, will develop the required software for the district government and conduct staff training, Mr. Syed said. The complaint cell will help in continuous monitoring of the functions of the city district government, particularly with reference to redressal of public grievances and complaints. The new facility for the public is based on the framework of guiding principles and practices aimed at ensuring highest standards of efficiency, integrity, accountability and transparency in governance. The decision to launch the online cell was taken at a meeting held on Thursday between the Transparency International Pakistan and the City District Government Rawalpindi (CDGR). TI-Pakistan Chairman Syed Adil Gillani gave a detailed presentation to the DCO and other officials of the district government on the modalities of the proposed complaint cell. The meeting was also attended by all EDOs, Wasa officials and director anti-corruption. Once introduced, the public will be able to send in their complaints online, by e-mail, fax and a helpline. The district administration will also launch a awareness campaign to educate the people on how to get access to the cell and register their complaints. The CDGR website will be upgraded and all complaints will be posted on daily basis to maintain a track record of complaints and action taken on them. The reasons for delay in action would also be posted on daily basis to maintain a track record of complaints and action taken on then. The reason for delay in action would also be posted on the website.


TI calls on govt to reinstate judges
Business Recorder May 24,2008

BERLIN: The Annual Meeting of the Transparency International Asia Pacific Chapters (TIAPC) help in Manila, calls on the Government of Pakistan to reinstate the disposed judges who were unconstitutionally dismissed on November 3, 2007, TIAPC consist of 20 countries. In view of Transparency International the termination of these judges critically weakens judicial sector. The judiciary is rule of law, accountability of governing institutions and the prevention of corruption. Promoting judicial integrity is a vital principle contained in United Nation Convention against Corruption (UNCAC), to which Pakistan is a state party. The problem also exists in many other TI Asia Pacific countries, and failure to respect the safeguards for independence of judges undermines their integrity. The meeting, therefore, calls on the authorities in Pakistan to respect the constitutional provision for the judiciary to function independently and to reinstate the dismissed judges.


‘Corruption will stop the growth of society’
The News April 20,2008

We have the rules but, if our self interest demands it, we break them using the infamous ‘Theory of Necessity,’ said Vice Chancellor, University of Karachi (KU) Prof. Pirzada Qasim while commenting on the moral state of society in Pakistan. He termed society in Pakistan ‘self-centred’ and said that individuals barely cared about the country as opposed to the advantages of self-interest. The VC expressed his resentment while speaking at the inaugural session of the debate ‘Is corruption justified in case of need’, which was organised by the Transparency International-Pakistan (TI-P) and held at the Arts auditorium, Karachi University, on Saturday. The VC said that a mindset has developed in our society that assumes that a bribe and other types of corruption are normal. Such things, he said, no longer induce any pangs of moral resentment. Moreover, the VC was of the opinion that civil society should come forward to help the country out of such moral ailments, which, he said, had penetrated the psyches of a vast majority of people. He also pointed to the absence of an effective consumers’ society that can prevent arbitrary and unjustified increases in the prices of commodities. At the same time, the VC was optimistic that society is gradually realising these follies and trying to do away with them. Furthermore, he termed corruption as the ‘murder of merit’ and reminded the audience that ‘social justice’ is essential for the proper running of the country. “The realisation is dawning on us, though, that we need an independent jury, control of prices/inflation and to remove the overall pathetic state of affairs in the country. These are the good signs, at least at the surface”, he said. Earlier, Saad Rashid, Executive Director, TI-P, informed the audience about the work of the organisation, which, according to him, was trying to bring in transparency in the social set up of the country. “The culture of corruption will stop the growth of society and the habit of recognising each other’s rights”, he said. The debate, both in English and Urdu, was judged by Capt. (Retd) Ashfaq Agha, Director, Bahria University and Cdr. (Retd) Aurangzeb, Head of the Business Administration Department, Dadabhoy Institute of Higher Education. The concluding session was chaired by Dr Muhammad Shamsuddin, Dean, Faculty of Arts, University of Karachi.


TI-Pakistan holds debate competition
Business Recorder April 21,2008

KARACHI: Transparency International-Pakistan held a debate competition on the subject ‘Is Corruption Justified in Case of Need’ at the Arts Auditorium, University of Karachi. The event was inaugurated by the Vice Chancellor of the University of Karachi, Dr Pirzada Qasim Raza Siddiqui. In his inaugural speech Dr Pirzada appreciated TI-Pakistan’s efforts to instil amongst the students the need to fight corruption. He advised students to take part in wholesome activities, to involve themselves in the community and become model citizens. Earlier, the Executive Director, Saad Rashid spoke on the history of Transparency International. He described the activities undertaken by TI-Pakistan for the youth and the school children, especially the enhancement of awareness against the evils of bribery. Students from nine institutions participated in the debates. The debates were both in English and in Urdu. A total of 20 debaters spoke for and against the motion. The session was chaired by Prof Dr Tanveer Khalid, Department of Political Science, University of Karachi. The judges of the competitions were Capt Ashfag Agha (retd), Director Bahria University and Prof Dr Cdr Aurangzeb(retd), Head Business Admin Dept, Dadabhoy Institute of Higher Learning. The participants presented lucid arguments to support their contentions. The first prize in English was won by Ms Sundus Arif Khan of Greenwich University. The first prize in the Urdu debate was won by Ms Farah Ahmad of Sir Syed University of Engineering and Technology. At the end of the session, Dr Tanveer Khalid congratulated students for their well-prepared speeches. She urged them to strive hard to make our country corruption free. The competition ended with the distribution of prizes to the winner and certificates to all the participants. A vote of the house was carried out and the motion ‘Is Corruption Justified In Case of Need’ was defeated.—PR


TI Pakistan reminds PPP to act on pledge to nation
The News. February 21,2008

In a letter issued Wednesday to the Pakistan People’s Patty (PPP) co-chairman, Asif Zardari, Transparency International Pakistan (TIP) expressed hope that the PPP would usher in good governance and the rule of law in Pakistan. Zardari was also urged to remain faithful to the commitment given to the nation in the party’s manifesto. TIP congratulated the PPP for its success in the 2008 general elections, where the party came in with a lead in the National Assembly, a majority in the Sindh Assembly and second in the Punjab, NWF’P and Balochistan assemblies. “The nation has reposed its confidence in the PP and expects the party not to betray their (the nation’s) confidence,” PIP said TIP chairman, Syed Adil Gilani, said that corruption was the biggest challenge to this nation, its politicians and public servants, as well as the business community Corruption has undermined and destablished democracy in Pakistan and it is now in the hands of the PPP to salvage the country Gilani said. “It has harmed the public and private sector developments and has given reason for dissolving the previous four democratically-elected governments,” the TIP chairman said, adding that the nation has rejected the parties that coalesced to form the government from 2002-2007. Prior to the 2002 general elections, a ‘Political Parties’ Pledge to the People of Pakistan’ was signed at a national convention on September 19, 2002. The political parties signatory to the convention were the PML-Q, PML-N, MQM, PPP-S, SDA, PNAP JI and the PTI, all of who had come together “to adopt a plan which will strengthen accountability and transparency through an independent and effective judicial system.” They failed to implement the pledge, however, and public resentment increased post-March 9 when Chief Justice Iftilthar Chaudhry was sacked. This caused a majority of the people to vote against the coalition government of PML (Q), PPP (S), Millat Party SDA, PML (F) and MQM, Gilani said.


Corruption termed challenge to good governance
Dawn February 08,2008

KARACHI, Feb 7: Good governance and the rule of law are of fundamental importance for Pakistan to develop as a nation and become part of the developed world. It is not the job of a government alone to bring about good governance, but every individual has to strive for this by playing his active role in rooting out corruption from society. These views were expressed by scholars and intellectuals from a cross section of society at a seminar on “Good governance and Rule of Law” organised by the Transparency International Pakistan here on Thursday. Former judge of the Sindh High Court Justice Dr Ghous Muhammad was the chief guest. The speakers included Mr Wajid Jawad, Chairman of the Financial Post, Prof Mansoor Kundi, Dean of the Balochistan University’s English Department, Dr Tanvir Khalid of the Karachi University’s Political Science Department, Dr Moonis Ahmar, Chairman of the Karachi University’s International Rela tions Department, and Syed Adil Gilani, Chairman of the Transparency International Pakistan. Speaking at the inaugural session, Justice Ghous Muhammad said that the foundation of Pakistan was based on the rule of law embodied in the Article 4 of the constitution. In order to bring about good governance, it is necessary that each and every institution of the country is governed by the laws, and not by the whims and moods of individuals, he stressed. “One of the prerequisites of good governance is a strong and effective democratic setup supported by popular legitimacy,” he said, urging the masses to use their right to franchise so that the country could once again be ruled by an elected government. “When there is martial law, there is no law, but when there is law, there is no martial law,” he said. The former judge termed corruption a serious challenge to good governance, and said “in a sense it defines the quality of governance since it is the political and economic institutions that give shape to it.” Dr Moonis Ahmar felt that good governance and the rule of law could only be implemented fully when work ethics were inculcated in students at the academic level. He cited the example of the West where work ethics were in place mainly because of their introduction to students. Defining work ethics as a process in which a nation is able to perform duties in a best possible manner, he said that “it is a code of conduct which also includes performing duties in a professional way.” “Practices such as punctuality, responsibility, character building, teamwork and productivity are all very important factors of work ethics,” he said. Dr Ahmar drew linkages between the rule of law and work ethics, and observed: “Unfortunately, those who violate the law most are those who are supposed to uphold it; courtesy the lack of accountability.” Discussing a number of fault lines, Dr Ahmar said: “We live in a culture of irresponsibility where the media has also failed to play its role effectively; and this has led to a state where mediocrity is encouraged and merit is ignored. It is not the fault of the government; the power structure of Pakistan breeds corruption,” he said, apprehending: “Whosoever comes into power now will do exactly the same.” Unless the system becomes transparent, Pakistan will continue to remain a failed state, Dr Ahmar warned, and said that the ideal solution was to invest in the youth so that the masses could reap the rewards after a couple of decades. Syed Adil Gilani observed that the country had long been suffering because of being in the hands of corrupt rulers. Had the judiciary played its due role effectively in the early phase of the country’s history, the situation would have been different now, he said.


Swiss grant to help anti corruption efforts: TIP
Business Recorder February 07,2008

KARACHI: Swiss Agency for Development and Cooperation Deputy Country. Director Ms Nicole Ruder and Transparency International-Pakistan (TI-P) Chairman Syed Adil Gilani on Thursday signed a bilateral agreement to support Phase-II of TI-P’s Anti-Corruption Programme Pakistan, says a press release. The TI-P is the Pakistan Chapter of Transparency International and the only NGO in Pakistan directly implementing an anti-corruption programme in Pakistan. Under this agreement, the Government of Switzerland will provide approximately Rs 43 million to continue its anti-corruption programme in Pakistan over the next three years. Martin Bienz, consul general, Swiss Consulate in Karachi, was also present on the occasion. The Pakistan chapter of Transparency International Pakistan (TI-P) was founded in 2001 by a group of volunteers. Since 2001, the TI’P has published two widely acclaimed National Corruption Perception Surveys (2002, 2006) and has signed Integrity Pacts with government agencies on principles of transparency in public procurement procedures which has resulted in substantial savings of tax money. Maybe its most visible success was the development of two model complaint centres in North Nazimabad and Gulshan-e-Iqbal towns allowing citizens to register complaints regarding electricity interruptions, inadequate water supply, overflowing drains, delay in garbage disposal, low gas supply to residences, etc) by e-mail, phone or personal visits to a centre. As these complaints are all formally registered it forces the government to address them in at timely manner. The City District Government Karachi (CDGK) replicated this model in all remaining towns of Karachi. The complaint centers played a crucial role in CDGK becoming the first city district to be awarded the ISO-9001 Certification in January 2008. Under the next Phase of TI-Ps. activities, the complaint centre model will be replicated in selected towns in Punjab, Balochistan, and NWFP, the National Corruption Perception Survey will be conduct- ad on an annual basis, and the TI-P will continue its high-impact advocacy campaign against corruption.—PR


TI-Pak nominated Sindh PPRA board member
The News January 24,2008

KARACHI: According to a notification, the Government of Sindh has nominated the representative of the Transparency International Pakistan (TI) Pakistan as a member of the Board of the Sindh Public Procurement Regulatory Authority (PPRA), says a press release. The Sindh PPRA is to take such measures and exercise such powers as may be necessary for improving governance, management, transparency, accountability and quality of public procurement of goods, services and works in the public sector, monitor the implementation of and evaluate laws, rules, regulations, policies and procedures in respect of, or relating to, inspection or quality of goods, services and works and recommend reformulation thereof or revisions therein as it deems necessary. The Sindh PPRA Board will also make regulations and lay down codes of ethics and procedures for public procurement, inspection or quality of goods, services and works; and monitor public procurement practices and make recommendations to improve governance, transparency, accountability anti quality of public procurement; monitor overall performance of procuring agencies.-PR


Representative of TI—Pakistan made member of PPRA
The News January 24,2008

According to a notification, the Government of Sindh has nominated representative of the Transparency International Pakistan (TI) Pakistan as member of the Board of the Sindh Public Procurement Regulatory Authority (PPRA). “The Sindh PPRA is to take such measures and exercise such powers as may be necessary for improving governance, management, transparency, accountability and quality of public procurement of goods, services and works in the public sector, monitor the implementation of and evaluate laws, rules, regulations, policies and procedures in respect of, or relating to, inspection or quality of goods, services and works and recommend reformulation thereof or revisions therein as it deems necessary,” said a press release issued on Wednesday. The Sindh PPRA Board will also make regulations and lay down codes of ethics and procedures for pubic procurement, inspection or quality of goods, services and works, and monitor public procurement practices and make recommendations to improve governance, transparency, accountability and quality of public procurement; monitor overall performance of procuring agencies,” it further said. The TI-Pakistan is a non-political, non-partisan, non-investigating, non-profit organisation that works with the public and private sector to fight corruption in a non-confrontational approach.


Parties urged to pledge for independent judiciary
Business Recorder December 24,2007

KARACHI (December 24 2007): Transparency International Pakistan Pakistan on November 21, 2007 wrote to all major political parties in Pakistan should include in their party manifestos 11 recommendations for good governance. The manifestos of five major political parties for 2008 elections have been released. TI Pakistan has studied the manifestos and tabulated the results as to which recommendations have been addressed by the political parties.

THE PARTIES, IN ORDER OF THE MAXIMUM TO THE LEAST COMPLIANCE, ARE AS FOLLOWS:

PML (N) 10/11, MQM 9/11, PPP 7/11, PML (Q) 5/11 and ANP 4/11.

Syed Adil Gilani, TI Pakistan Chairman said that prior to the general elections of 2002, a 'Political Parties Pledge to the People of Pakistan' was signed by all political parties on September 19, 2002 at a national convention organised by Transparency International Pakistan at convention centre, Islamabad. Signatories were President Pervez Musharraf, Azhar (PML Q), Farooq Leghari (Millat Party), Sartaj Aziz (PML N), Dr Farooq Sattar (MQM), Iqbal Khattak (PPP-S), Imtiaz Shaikh (SDA), Ajmal Khattak (PNAP), M Ashraf (JI), and Imran Khan (PTI). In 2002 at a national convention, all the parties signed the following: 'We solemnly pledge to the people of Pakistan that after the elections, when the new government is sworn in, those of us who emerge as the elected leaders of our beloved country will as a matter of the highest urgency come together to adopt and implement an effective anti-corruption reform programme which will strengthen accountability and transparency through an independent and effective judicial system based on ensured access to information throughout all levels of federal and provincial government'. The chairman TI Pakistan said actions speak more than words and PMLQ, PPP (S), Millat Party, SDA and MQM were in the coalition government from 2002 to 2007. How much did they comply with their pledge to the nation on an independent and effective judicial system and ensured access to information is for the voters to judge. The survey report is being released for information of all political parties and for those who will vote to choose the parties who will govern us for the next 5 years on January 8, 2008. Voters have a huge responsibility to choose the right parties, keeping in mind that 'God helps those who help themselves'. TI Pakistan appeals to all voters to think again and again before they cast their vote. On the issue of anti-corruption national agency, surprisingly all the coalition parties as well as the opposition parties of 2002-2007 parliaments are unanimous, and not satisfied with the performance of NAB. All the parties have declared to revamp NAB, or disband and reconstitute another agency. Reference material.

PML N: The National Accountability Bureau will be revamped. It will not be an organisation to be used (misused) by the government for victimising its opponents. Military and judiciary will not be excluded from its purview. The National Accountability Bureau (NAB) will be replaced with an independent accountability commission.

PML Q: The PML believes that corruption is a big impediment to development and good governance. However, regrettably in Pakistan, there has never been any across-the-board accountability. In fact, all anti-corruption campaigns have been politically motivated to hound and harass the opposition. An independent, non-partisan anti-corruption institution, free of government control, will be established with a view to attacking corruption without fear or favour so that accountability is not used as a weapon of revenge against political opponents.

PPP: Politically motivated NAB will be abolished and replaced by an independent accountability commission whose chairman will be appointed jointly by the Prime Minister and the leader of the opposition with the advice and consent of joint parliamentary committee with parity between Treasury and the Opposition parties.

MQM: Federal and provincial ombudsmen and Accountant General Offices, Anti-Corruption Departments, Public Accounts Committees, Prime Minister's and chief minister's monitoring committees would be headed by senior and dedicated government officers and public representatives to make these institutions more efficient and effective.

Transparency International Pakistan Recommendation

MQM

PPP

PML(Q)

PML(N)

ANP

  1. There will be no discretion in any administrative decision taken by government servants.

Yes

Yes

Yes

Yes

Yes

  1. A clear commitment that their party will combat corruption wherever and whenever it occurs and that their elected members will submit themselves to scrutiny. Giving up the need for immunities and privileges which may shield them from the legal process.

Yes

Yes*

Yes

Yes

Yes

  1. Freedom of Information Ordinance 2002 to be revised for deletion of all exemptions except for national security reasons.

 

 

 

Yes

 

  1. All information under Freedom of Information Ordinance 2002 shall be made available on the website of all ministries/departments/organizations

Yes

Yes

Yes*

Yes

 

  1. Judiciary shall be fully independent.

Yes

Yes

Yes

Yes

Yes

  1. All government Tenders to be made Transparent under Public Procurement Rule 2004.

Yes*

Yes*

Yes*

Yes*

 

  1. Privatization process will also be on the guidelines of Public Procurement Rules 2004.

Yes*

 

 

Yes*

 

  1. All public appointments will on merit, and on predetermined criteria.

Yes

Yes

 

Yes

Yes*

  1. All cities of Pakistan will have Traffic police on the pattern of Motorway Police.

 

 

 

 

 

  1. Inform the voter through the press the steps that your party will take to combat and reform the process through providing transparency in the administrative, financial and procurement procedures.

Yes

Yes

 

Yes

 

  1.   Land records will be computerized within 1 year.

Yes*

 

 

Yes*

 

Yes* Indirect commitment.

 TRANSPARENCY INTERNATIONAL; CORRUPTION PERCEPTION INDEX:

  Year Score Rank
CPI 1995 2.25 39/41
CPI 1996 1.0 53/54
CPI 1997 2.53 48/52
CPI 1998 2.7 71/84
CPI 1999 2.2 88/99
CPI 2000 No survey as minimum 3 surveys were required.
CPI 2001 2.3 79/91
CPI 2002 2.6 81/105
CPI 2003 2.5 96/133
CPI 2004 2.1 134/145
CPI 2005 2.1 146/159
CPI 2006 2.2 147/163
CPI 2007 2.4 137/180


Police are most often bribed-I
Business Recorder December 7,2007

ARTICLE (December 07 2007): Experience of bribery is widespread outside Europe and North America; police are most often bribed. The police are the sector most affected by bribery, with 17 percent of those who have had contact paying a bribe. Police are most commonly bribed in Africa and Latin America.

REPORT ON THE TRANSPARENCY INTERNATIONAL GLOBAL CORRUPTION BAROMETER 2006 SUMMARY OF FINDINGS: TI GLOBAL CORRUPTION BAROMETER 2006:

-- Bribery for access to services is most common in Africa. The most commonly bribed sectors in Africa are the police, tax revenue and utilities.

-- Government performance in the fight against corruption is not regarded to be adequate in most countries.

-- People around the world tend to be very negative about their government's attempt to fight corruption. Only one in five surveyed worldwide think that their government is effective to some degree in fighting corruption; nearly two in five say the government is 'not effective' in its anti-corruption work.

-- One in six surveyed globally thinks that their government actually encourages corruption rather than fighting it.

-- Despite relatively good scores on the Corruption Perceptions Index 2006, nearly one in five respondents in the United States and the United Kingdom think that their government encourages corruption rather than fighting it.

-- The perception remains that political parties and parliaments are most corrupt, followed by business and police.

-- The public views political parties as the most corrupt institution, followed by parliament/legislature.

-- Police are considered to be the sector most affected by corruption in both

AFRICA AND THE NEWLY INDEPENDENT STATES:

-- These findings strongly support those of past editions of the Barometer.

-- The Taiwanese public reports an increase in levels of corruption in most of the institutions and sectors covered by the Barometer 2006 during the last two years. The public in Hong Kong and Croatia also view corruption as worse in a number of sectors, while, in contrast, in India there have been some perceived improvements.

POLITICAL AND BUSINESS LIFE ARE JUDGED MORE AFFECTED BY CORRUPTION THAN FAMILY LIFE IN MOST COUNTRIES:

-- Political life is viewed as being most affected by corruption, followed closely by the business environment. -- These findings support those of previous editions of the Barometer.

-- Corruption is reported as affecting family life very little in EU+ countries and the Newly Independent States, but a great deal in Africa and South East Europe.

-- Perceived corruption in political life in the United States has increased in the last two years; perceived corruption in Iceland's business environment and family life has increased; perceived corruption has increased in Spain and Japan's political life and business environment.

ABOUT THE SURVEY: Transparency International's (TI) Global Corruption Barometer 2006 (the Barometer) explores how corruption affects ordinary people. It provides an indication of both the form and extent of corruption, from the viewpoint of citizens from around the world. The Barometer is unique in that it gives a voice to those affected by corruption - and helps us better understand their concerns and experiences. The Barometer 2006 explores experience of petty bribery in greater depth than ever before, presenting information on the institutions and public services most affected by bribery, the frequency of bribery, and how much people pay. Also new to the survey is a question to the public about government's efforts to fight corruption. As in years past, the Barometer asks people about their opinions regarding which sectors of society are the most corrupt and which spheres of life are most affected by corruption. Information about public perception and experience of corruption, such as the Global Corruption Barometer 2006 offers, is vital to anti-corruption efforts. People's perceptions are an indicator of the success of anti-corruption policies and initiatives. In addition, establishing which public agencies have the highest level of corruption helps set priorities for reform. Finally, gaining insight into the frequency and cost of bribery helps us understand just how the public is victimised by corruption - and the very high price that corruption exerts on the poorest. The Global Corruption Barometer 2006, now the fourth in the series, reflects the findings of a survey of 59,661 people in 62 low, middle and high-income countries. The survey was carried out on behalf of TI by Gallup International, as part of its Voice of the People Survey, between July and September 2006. This year's Barometer covers six countries not included in past editions: Albania, Congo- Brazzaville, Fiji, Gabon, Morocco and Sweden. The Global Corruption Barometer 2006 is one of TI's key global tools for measuring corruption. The public opinion focus complements the Corruption Perceptions Index (CPI) and Bribe Payers Index (BPI). The CPI and BPI reflect the opinions of experts and business leaders, and focus on the perception of public sector and political corruption, and the supply side of bribery, respectively. For the purposes of analysis, individual countries have been grouped into regions. While regional groupings pose some problems, they can highlight areas that have broadly similar characteristics and challenges. Combining regional data also strengthens the reliability of some findings.

THE GROUPINGS USED IN THIS REPORT ARE:2

-- EU and other Western European Countries (EU+): Austria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the United Kingdom;

-- South East Europe: Albania, Bulgaria, Croatia, Kosovo, Macedonia, Romania, Serbia and Turkey;

-- Newly Independent States (NIS): Moldova, Russia and Ukraine;

-- Africa: Cameroon, Congo-Brazzaville, Gabon, Kenya, Morocco, Nigeria, Senegal and South Africa;

-- Latin America: Argentina, Bolivia, Chile, Colombia, Dominican Republic, Mexico, Panama, Paraguay, Peru and Venezuela;

-- Asia - Pacific: Fiji, Hong Kong, India, Indonesia, Japan, Korea (South), Malaysia, Pakistan, the Philippines, Singapore, Taiwan and Thailand; and North America: Canada and the United States.

EXPERIENCE OF BRIBERY:The Transparency International Global Corruption Barometer 2006 asks respondents whether they or anyone in their household has had contact during the past 12 months with seven familiar public sector agencies, including the police, health services, education and so forth, and whether they have had to pay bribes in their dealings with them. The results point to the public sector institutions, here also referred to as 'sectors', most tainted by bribery. The TI Barometer 2006 also asks the public about the amount paid in bribes. Most people who pay bribes are the victims of corruption - extra 'speed' payments or illicit backhanders are often the only way they can gain access to services they are entitled to by law, or the only way to avoid administrative obstacles or legal wrangling with the authorities. By revealing the cost of bribery, the Barometer shows the scale of these 'extra payments'. Corruption and bribery always hit the poor hardest, extracting an extra tax from those who can least afford it.

BRIBERY OF POLICE WORST THE WORLD OVER: According to the Global Corruption Barometer 2006, bribes are most commonly paid around the world to the police, and are substantially more frequent than to other services. This result presents enormous concerns regarding corruption in processes of law enforcement, particularly when viewed alongside the sector identified as the third most common recipient of bribes: the legal system and judiciary.

AS FIGURE 1 SHOWS: registry and permit services are the second most bribe-ridden sector, with nearly one in ten respondents who have had contact with them reporting that they had paid a bribe. In the Africa region, a full 32 percent indicated they had paid bribes for services in this sector. The extent of the problem of police bribery varies enormously between regional groupings, as Figure 2 reveals. More than half of the respondents in Africa who have had contact with the police in the past 12 months paid a bribe. In Latin America, approximately one in three respondents who have had contact with the police paid a bribe, and in the NIS, Asia-Pacific and South East Europe the figure varies between 15 and 20 percent. Only a very small proportion of respondents from North America and the EU+ regional groupings have paid a bribe to the police, which is in line with the overall low rates of bribe-paying among the general public in these regions.

BRIBERY CONTINUES TO PLAGUE PEOPLE IN POORER AND TRANSITIONAL COUNTRIES: Taken together, responses from African, Latin American and NIS countries indicate that frequent bribe-paying is the norm - with a few notable exceptions - as is indicated in Table 1, below. In Asia-Pacific and SE Europe, bribe-paying was moderate, while in North America and EU+ countries bribes were seldom paid for services. Bribery in poor and transitional countries represents a major impediment, one that holds back human development and economic growth. The poorest in society are least able to afford to pay bribes and often must go without basic services as a result. And respondents in several African countries, such as Congo-Brazzaville, Nigeria and Senegal, admitted to paying multiple bribes, indicating an even greater burden. In contrast to the situation in the African countries polled, the reported experience of bribery in the EU+ grouping and North America is relatively low, with less than one in thirty respondents who had contact with public institutions having paid a bribe in North America and less than one in twenty in the EU+. This experience of little or no bribery in daily life activities continues to stand in contrast to the perception of corruption in these regions, where respondents report that corruption severely affects key sectors and spheres of life. In this case, it may be necessary to draw a distinction between the different forms of corruption, such as petty and grand. While in EU+ and North America there may be little need to pay small scale bribes in daily life, the public is familiar with reports on grand corruption affecting both public and private sectors. Therefore, while petty bribery for services does not seem to be a major problem, the public does remain concerned about large-scale corruption, such as in major government contracts or in political party funding, and its denigrating effect on their societies.

Countries most affected by bribery

Percentage Respondents that have paid a bribe in the last 12 months More than 40% Albania, Cameroon, Gabon, Morocco
16-40% Bolivia, Congo-Brazzaville, Czech Republic, Dominican Republic, Greece, Indonesia, Kenya, Mexico, Moldova,Nigeria, Paraguay, Peru, Philippines, Romania, Senegal, Percentage of Ukraine, Venezuela
6 - 15% Argentina, Bulgaria, Chile, Colombia, Croatia, Hong Kong, India, Kosovo, Luxembourg, Macedonia, Pakistan,Panama, Russia, Serbia, Thailand
5% or less Panama, Russia, Serbia, Thailand Austria, Canada, Denmark, Fiji, Finland, France, Germany, Iceland, Israel, Japan, Malaysia, Netherlands, Norway, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, United Kingdom, USA


Pakistan 7th corrupt country in world
The Nation December 7,2007

Berlin(Agencies)- India finds itself on the 14th position while Pakistan is at seventh in the 2007 Global Corruption Barometer released by the anti-corruption watchdog Transparency International Pakistan on Thursday. India with 21 -33 per cent bribery percentage (% of respondents reporting they paid a bribe to obtain a service), Dominican Republic , Greece, Indonesia, Lithuania,peru, Serbia and Ukraine. According to the survey, some of the world’s poorest people in Africa and Asia are hardest hit -by public corruption, forced to pay bribes for police protection, education and justice. The Barometer showed that as a region, Africa suffered the most public corruption. In the African countries surveyed, 42 - per cent of people reported that they had been asked to pay a bribe to obtain a service during the past 12 months. The Asia-Pacific region was -next with 22 per cent; then a grouping of Russia, Moldova and Ukraine with 21 per cent; Latin America with 13 per cent; south- - eastern Europe with 12 per cent; the European Union with 5 per cent; and North America with 2 per cent. “Poor families are hit hardest by demands for bribes,” the organisation said in a summary of its report. “This year’s Global Corruption Barometer has made it clear that too often, people must part with their hard-earned money - to pay for services that should be free,” said organization chairman Huguette Labelle in a statement. The survey of more than 63,199 people in 60 countries, compiled by polling agency Gallup, found that a majority believe corruption in general is on the rise, and they consider politics the most graft-ridden sector. Some 54 per cent said they expect the level of corruption to increase in the next three years, 26 per cent said it would stay the same, while 20 per cent said it would decrease. Slightly less than 70 per cent said political parties were the most corrupt institutions, followed by about 55 per cent who said parliament or the country’s legislature was the most corrupt, narrowly trailed by just over 50 per cent citing police departments. The figures total more than.100 per cent because people gave multiple answers about where they paid bribes. The study found that the countries with the highest level of petty bribery, with 30 per cent of respondents reporting paying bribes, were Albania, Cambodia, Cameroon, Macedonia, Kosovo, Nigeria, Pakistan, Philippines, Romania and Senegal. Of the countries and territories where interviews were carried out, Cameroon fared the worst, with 79 per cent of respondents saying they had paid a bribe to obtain services. They were followed by 72 per cent of Cambodians, 71 per cent of Albanians, 67 per cent from Kosovo; both Macedonia and Pakistan registered 44 percent. Canada, Japan, South Korea, Austria, France, Iceland, Sweden and Switzerland fared the best overall, with only 1 per cent of respondents saying they had paid a bribe. The United Slates, Denmark; Finland, Ireland, the Netherlands, Portugal and Britain did only slightly worse with 2 percent. The study found overall that police departments were the most corrupt, with one in four respondents around the world who had contact with police being asked to pay a bribe - and one in six ending up paying up.


NRO termed negation of UNAC, political parties pledge
Business Recorder October 8,2007

KARACHI (October 08 2007): The National Reconciliation Ordinance (NRO), 2007, is a negation of the United Nations Convention Against Corruption (UNAC) as well as the spirit of 'political parties pledge' to serve the people with the highest level of personal integrity, says Transparency International Pakistan (Pakistan). It is just 56 days after ratification of UNAC by the President General Pervez Musharaf, the Federal Government on October 5, 2007 promulgated NRO 2007. "This indeed a setback and a reversal of anti-corruption initiatives adopted since 2002 under the National Anti-Corruption strategy", said TI (Pak) Chairman Syed Adil Gilani. The amendment to the NAB Ordinance for the procedure of arrest of sitting parliamentarian (quoted below), are great setbacks to the anti-corruption efforts in Pakistan: "Notwithstanding anything to the contrary in sub-section (1), the Federal Government or a Provincial Government may, before the judgement is pronounced by a trial court, withdraw from the prosecution of any person, including an absconding accused who is found to be falsely involved for political reasons or through political victimisation in any case initiated between 1st day of January 1986 to 12th day of October, 1999 and upon such withdrawal clause (a) and clause (b) of sub-section (1) shall apply, and "Provided that no sitting Member of Parliament or a Provincial Assembly shall be arrested without taking into consideration the recommendations of the Special Parliamentary Committee on Ethics referred to in clause (aa) or Special Committee of the Provincial Assembly on Ethics referred to in clause (aaa) of section 24, respectively." Syed Adil Gilani said that Pakistan has ratified the United Nations Convention AGAINST CORRUPTION (UNCAC) ON AUGUST 9, 2007, WHICH STATES THAT: Parties to this Convention Concerned about the seriousness of problems and threats posed by corruption to the stability and security of societies, undermining the institutions and values to democracy, ethical values and justice and jeopardising sustainable development and the rule of law, and Concerned also about the links between corruption and other forms of crime in particular organised crime and economic crime, including money-laundering, and Concerned further about cases of corruption that involves vast quantities of assets, which may constitute a substantial proportion of the resources of States, and that threaten the political stability and sustainable development of those States. UNDER THE UNCAC ARTICLE 5, PREVENTIVE ANTI-CORRUPTION POLICIES AND PRACTICES PAKISTAN HAS COMMITTED THAT:"Each state party shall in accordance with the fundamental principles of its legal system, develop and implement or maintain effective, co-ordinated anti-corruption policies that promote the participation of society and retied the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability. Each State Party shall endeavour to establish and promote effective practices aimed at the prevention of corruption and each state party shall endeavour to periodically evaluate relevant legal instruments and administrative measures with a view to determining their adequacy to prevent and fight corruption." The Government of Pakistan in its National Anti-corruption Strategy prepared in 2002 had blamed past governments for abuse of power in following words: "Sadly, the flagrant abuses of power by so many past public office holders, even when these office-holders espoused anti-corruption and accountability, now undermines future attempts at tackling corruption. For example, as mentioned at section 3,2, the anti-corruption agencies were used as tools for political victimisation and many thus expect the NAB to engage in selective accountability. There is a fear of the accountability processes crashing unless buffered from political influences in the future set-up. As outlined at section 3,2, previous attempts at tackling corruption have lacked political backing and have originated only from government source without the involvement of other parts of the national integrity system the risk of unreconstructed Political Will is now the greatest threat to the successful achievement of the NACS goals." The lack of Political will of the present government has undermined the goals of NACS, he added. Syed Adil Gilani said the NRO 2007 is against the spirit of the 'political parties pledge' to the people of Pakistan" which was signed by the leaders of all political parties, PML(Q), PML(N), PPP(S), PTI, MQM, PNA(P), SDA, Millat Party, and JI, including the President of Pakistan, the ministers of the government and all participants on September 19, 2002 at the National Convention organised by the Transparency International Pakistan at Convention Centre Islamabad. It states: "All the parties solemnly pledge to the people of Pakistan that after the elections when the new government is sworn in, we will meet again to determine a united front against an evil that is undermining the future of our country, and which is one that transcends the divides of political parties and persuasions, and on a personal level, each of us gives our individual pledge that we are dedicated to serving the people of our country with the highest levels of personal integrity. It also said that Aware that the corruption crisis must be tackled openly by all, we invite every fellow citizen, to unite with us in a determination to rid our country once and for all of the corruption that has so retarded our country's economic and social progress at home and marred our international image abroad." In 1997, Pakistan and India on CPI were 5th and 8th most corrupt countries respectively out of 52 countries, and in 2007 this gap has substantially increased to 42nd and 106th most corrupt countries out of 180 countries. The TI (Pak) believes in the slogan that 'Pakistan comes first', but feels that unless Legislators, judiciary, Executive and the Civil Society plays their role in just and impartial manner, the country will continue to be at the lowest level of corruption in the Transparency International Pakistan Corruption Perception Index, CPI.-PR


Pakistan 42nd most corrupt country
The Nation September 27,2007

KARACHI - Pakistan ranked as 42nd corrupt country among 184 countries of the world, while Punjab is the most corrupt province of the country and police is the most corrupt department followed by Revenue and Education Departments. This was announced by Syed Adil Gilani Chairman, Transparency International Pakistan Pakistan while addressing a Press conference here on Wednesday and issued the yearly report on corruption. He said that Somalia and Myanmar were the most corrupt countries in the world and shared the lowest core of 1.4 while Pakistan ranked as 42nd most corrupt country in the world scoring 2.4 point. He said Denmark scoring 9.4-points share the top scorer with Finland and New Zealand. He said Pakistan has shown gradual improvement in its score from 2.2, 2.4 points but it needs sincere efforts to apply rule and regulation to achieving the goal of reducing corruption. Gilani said that if the judiciary had been freed situation would have been entirely different from today’s. He added that if judiciary had not compromised in 1988 when they had withdrawn the petition of the corruption charges against former Chief of Army Staff, the country would have been much better than today. He said corruption in the Army was much lower as compared to other institutions. CBR and Customs are much better departments than other. He also said that the ratio of corruption is very much low in religious leaders and,added,that an individual couldn’t control the corruption but on the whole we had to work for the elimination. He also strongly criticised the NAB and said that NAB was only focusing limited and Opposition party people under the corruption charges which would never help reduce corruption and now time had come for the judiciary to take serious notices on this matter. The divide in perceived levels of corruption in rich and poor countries remains as sharp as ever, according to the 2007 Corruption Perceptions Index (CPI), report, he said, adding, that developed and developing countries must share responsibility for reducing corruption, in tackling both the supply and demand sides. Though Pakistan has shown gradual improvement its CPI Score from 2.1 (13th country above the most corrupt country out of 159) in 2005, to 2.2 in 2006, (16th country above the most corrupt country out of 163), and now to 2.4 in 2007 (40th country above the most corrupt country out of 180), Syed Adil Gilani, Chairman TI Pakistan said that Pakistan needs sincere efforts to apply rules and regulation across the board, to achieve the goal of reducing corruption, and to become Asian Tiger. He said that Pakistan should follow examples of Singapore and Hong Kong, who are the only Asian countries above Score of 8. Judicial independence, integrity and accountability must be enhanced to improve the credibility of justice system. Not only must the judicial proceedings be freed of political influence,but also judges be subject to disciplinary rules, limited immunity and a code of judicial conduct to help ensure that justice is served. Political will, judicial independence and effective non-discriminatory accountability mechanism for those civil/ defence departments not complying with the procedures including privatisation, and Public Procurement Rules 2004, as well as the public corporations and authorities, are urgently needed to successfully combat corruption which is defined as ‘Misuse of Authority for personal gain’. The poorest countries suffer most under the yoke of corruption. It is ultimately their responsibility to tackle the problem. Low scores in the CPI indicate that public institutions are heavily compromised. The first order of business is to improve transparency in financial management, from revenue collection to expenditure, as well as strengthening oversight and putting an end to the impunity of corrupt officials. An independent and professional judicial system is critical to ending impunity and enforcing the impartial rule of law, to promoting public, donor and investor confidence. If courts cannot be relied upon to pursue corrupt officials or to assist in tracing and returning illicit wealth, progress against corruption is unlikely.


Transparency International Pakistan report Independent judiciary termed vital to end corruption
The News September 27,2007

An independent judiciary is imperative to end corruption and the culture of impunity as implementation of current mechanisms, such as the National Accountability Bureau (Nab), was ‘selective,’ resulting in a negligible reduction of these ills in public sector organisations. The eradication of these evils would ultimately lead to economic improvement in terms of restoring confidence of the investors, said Transparency International (TI), Pakistan here on Wednesday. “An independent and professional judicial system is critical to ending impunity and enforcing the impartial rule of law, to promoting public, donor and investor confidence,” said Syed Adil Gilani, Chairman TI Pakistan while launching the TI corruption perception index 2007 at the Karachi Press Club. He opined that if courts cannot be relied upon to pursue corrupt officials or to assist in tracing and returning illicit wealth, progress against corruption is unlikely. He said Pakistan stood at number 42 on a list of the 180 most corrupt countries in the world. Referring to the perceived “gradual improvement” in certain sectors, such as the Central Board of Revenue and Customs, Gilani suggested that Pakistan needs sincere efforts to implement rules and regulations across the board to achieve the goal of reducing corruption by following the examples of Singapore and Hong Kong. He said that judicial independence, integrity and accountability must be enhanced to improve the credibility of the system. He said not only must judicial proceedings be freed of “political influence”, but judges themselves must be subject to “disciplinary rules, limited immunity and a code of judicial conduct” to help ensure that justice is served. Defining corruption as the “misuse of authority for personal gain”, he said political will, judicial independence and an effective, non-discriminatory accountability mechanism for those civil/defence departments and public corporations and authorities that are not complying with procedures, including privatisation and Public Procurement Rules 2004, are urgently needed to combat corruption. He said that in countries where public sector institutions were historically based on patronage and nepotism rather than merit, reforms take time and can require a substantial investment of resources, as well as technical assistance. Replying to volley of questions, TI chairman said no “substantial reduction” in corruption has occurred during era of Gen. Pervez Musharraf, though a slight improvement had occurred in his initial three years. Similarly, corruption was a bit reduced during initial three years of ex-premier Nawaz Sharif but it increased during later part of his rule. About the alleged corruption of two former premiers, Benazir Bhutto and Nawaz Sharif, TI Pakistan head said “any one individual could not influence corruption.” He termed Punjab the country’s most corrupt province. To another question, he said the Army was less corrupt than other institutions. He said that police was number one on the corruption list followed by the land revenue department, education department etc. However, quoting an international report, he said there was 60 per cent corruption in the armed forces in the country. He said religious leaders were the least corrupt. About judicial activism, he said the judiciary should take bold decisions as implied pressure would not work. “Had the judiciary been independent, we would not have been living under these circumstances,” he believed. He also believed that the situation would have been different had the judiciary not “compromised” over the petition against the corruption of a former army chief in 1988. He said that Nab had not produced desired results because the application of its system was based on “pick and choose.” Syed Gilani said that TI believes in democracy as dictatorship breeds more corruption.


Pakistan 138th on graft list
Dawn September 27,2007

KARACHI, Sept 26: The Transparency International Pakistan (TI) has taken a serious note of the government’s decision to give a blanket exemption to all purchase deals of the defence ministry from the Public Procurement Regulatory Rules (PPRA-2004), well placed and knowledgeable sources informed Dawn on Wednesday. Under the defence ministry come the three armed forces — army, navy and air force — as well as the Pakistan International Airlines Corporation, civil aviation and defence housing authorities and a host of other institutions that transact financial deals and conduct procurement worth Rs200 billion every year. A Corruption Perception Index (CPI) is drawn up every year by the Transparency International Pakistan, focusing on corruption in public sector and abuse of power of public offices. Procurement of goods and services by government departments is said to be one of the sources of corruption if the system is not transparent. The exemption was given by a bureaucrat who in 2004 headed the federal finance ministry and is now the chairman of the National Accountability Bureau. Sources recalled that the TI had lodged a protest with Islamabad in 2004 soon after it learnt that defence ministry deals had been exempted from the rules of PPRA. The TI is said to have again drawn the government’s attention recently on exclusion of defence ministry deals from these rules. The Pakistan government put into place a PPRA law in 2002 and framed rules in 2004 in compliance with World Trade Organisation (WTO) conditions that made it obligatory on all signatories to make all government procurement operations transparent and open to all. In compliance with the WTO conditions, the government circulated last year a draft of PPRA for consultancy services also. According to the sources, Islamabad has not responded to the TI communication. There is, however, no word as to what could be the follow-up action by TI or international financial institutions like the World Bank and the Asian Development Bank if the government continues to exempt procurement deals of the defence ministry institutions from the PPRA rules. The World Bank and ADB are among institutions that furnish data used in drawing up a Corruption Perception Index (CPI) of about 180 countries. This year, TI has placed Pakistan at 138th position, out of 179, in the corruption index. Pakistan has been clubbed with four other countries: two African countries - Cameroon and Ethiopia -, one Middle Eastern country --- Syria ---, and one South American state --- Paraguay. But more important than ranking is the ‘perception score’. The scale ranges from zero to ten --- zero denoting the highest level of corruption and 10 the least. The TI’s annual report, released on Wednesday, showed Pakistan’s score at 2.4 points and adjudged it the 40th most corrupt country in the world. Pakistan’s position has improved somewhat over the last few years. In 2005, its score was 2.1 and the rank 13 out of 159. Last year, Pakistan’s score was 2.2 and it was adjudged the 11th most corrupt country out of 163. “Pakistan needs sincere efforts to apply rules and regulations across the board to reduce corruption and become an Asian Tiger,’’ Syed Adil Gilani, the chairman of Pakistan TI said during the launching of the report.


TIP holds ‘Youth in Governance National Convention’
Financial Post September 9,2007

KARACHI, Sept 8: Ex-speaker of the National Assembly, Illahi Baksh Soomro on Saturday inaugurated the ‘Youth in Governance National Convention’ here in a local hotel organized by the Transparency International Pakistan (TIP). The convention was attended by large number of students from more than 30 institutions from all over the country. Speaking on the occasion, Blahi Baksh Soomro lauded the efforts of TIP and emphasized that more such events be staged to involve the youth in important activities like anti corruption. He also stressed upon youngsters to involve themselves in the community and work for the betterment of the country. TIP Chairman, Syed Adil Gillani, while welcoming the guests, traced the history and global operations of Transparency International Pakistan from its inception to its current position. He explained the aims and objectives of Transparency International Pakistan and gave an overview of TIP activities in Pakistan. Senior Programme Officer. Swiss Development Agency for Cooperation & Development (SDC). Ms. Kaneez Fatima Muhammad Kassem gave a brief history of SDC’s involvement in various projects in Pakistan. Deliberating on the Anti Corruption Project Pakistan, she said that awareness was the first step towards reducing corruption in the society. Later, all the participants took pledge to work together to eliminate the menace of corruption from the country. In the second session, Dr, M. H. Qazi, Rector Dadabhoy Institute of Higher Learning delivered a lecture on “Building an Ethical Society” in which he stressed on the need for the nation to be string in ethics and morality in order to progress in the world. Prof. Tanvir Khalid, Professor of Political Science, University of Karachi chaired the second session while the concluding session was chaired by Former Chief Justice of Supreme Court of Pakistan. Justice (Retd.) Saeed-uz-Zaman Siddiqui. Ghazi Salahuddin also delivered a lecture on human rights, in which he discussed the violations of human rights in the country and stressed on the need to improve the deteriorating state of human rights in Pakistan. In the end, Justice (Retd) Saeed-uz-Zaman Siddiqui distributed certificates amongst the participants of the convention.


Workshop on procurement rules held
Business Recorder August 26,2007

KARACHI: A one-day workshop on PPRA Public Procurement Rules 2007 was held on Saturday, August 25, 2007 at Marriott Hotel, Karachi, by ‘Transparency International Pakistan’. It was attended by Sindh Government Officers, including Local Government Departments from all over Sindh Province. PPRA Managing Director Khalid Mahmood Soomro presided over the workshop. In his address, the Managing Director appreciated Transparency International Pakistan for its services in capacity building efforts for Sindh province. He advised all participants to strictly follow the new rules. Participants also included officers from NAB and AG Sindh. Transparency International Pakistan Chairman Adil Gilani gave a detailed presentation, and Saad Rashid, Executive Director, Transparency International Pakistan, briefly described the role of Transparency International Pakistan and its efforts in making and its application. Participants from Secretariat of Govt. of Sindh Fazeelat Mehdi (Deputy Secretary), Government of Sindh Auqaf, Religious, Ministries Affairs, Zakat and Ushr Department, Dr. Muhammad Ali (Secretary), NAB Sindh. City District Government Karachi, Office of the Executive District Officer Works and Services Department Tharparkar at Mithi, Govt. of Sindh Cooperation Department, Govt. of Sindh Environment and Alternative Energy Department, Office of the District Coordination Officer District Matiari, Govt. of Sindh Home Department, Govt. of Sindh Agriculture Department, Govt. of Sindh Health Department attended the Workshop—PR


‘Transparency’ questions USAID website correctness
Business Recorder July 19,2007

KARACHI: ‘Transparency International’ (TI), Pakistan, has expressed concern over USAID’s showing over 50 million voters under the new computerised electoral rolls. The Computerised Electoral Rolls System (‘Cers’) is one of $ 18.9 million project, funded by multiple donors including USAID, and administered by UNDP. TI, Pakistan Chairman Syed Adil Gilani, in a letter sent on July 16 to United States Ambassador Anne W Patterson, termed the details of the project on USAID website as “disturbing”, and described the figure of over 50 million voters as “misleading”. TI said that the statistics of voters’ list in 2002, made by the Election Commission of Pakistan (ECP) based on population of Pakistan being 132 million, showed 72 million voters. Out of this, 18-2 1 years age voters were 5.5 million. Now, after five years with 160 million population, new voters to be added to the 72 million old voters may be 8.5 million. “This dichotomy needs to be addressed immediately, and the only solution is that every citizen should have access to the voters’ list so that they may check their names and enlist their names if these are missing.” The ‘Cers’ is a project of Election Commission of Pakistan, a key step in Pakistan’s democratic development. The initial basic principle of fair and free elections is a credible electoral list, and USAID has rightly chosen the task of supporting electoral process in Pakistan by taking part in its funding so that the whole election process should be fair, transparent and complaint-free, the letter said. However, the Election Commission of Pakistan, which is supposed to comply with the covenants of the grant agreement of the USAID is not observing the transparency aspect of displaying the electoral rolls on its website for free access of the citizens of Pakistan. The letter further points out that the issue being faced by Pakistan is that the voters list prepared by the consultants appointed by Election Commission of Pakistan under the USAID funds have come up with only 52 million voters, whereas in 2002 the number of voters was 40 percent more, i.e. 72 million. This list was prepared by Nadra which has the computerised data of the entire population. In a separate letter addressed to the Chief Election Commissioner (CEC), TI has highlighted that monitoring is one of the principles of National Anti-Corruption Strategy (NACS), an initiative of National Accountability Bureau (NAB). NACS recommends regular and systematic monitoring of the nature, causes and extent of corruption through reliable and verified data collection, analysis and co-ordination. “TI Pakistan requests the CEC to put the computerised electoral list on ECP website. As the voters’ list has become controversial due to drastic reduced numbers of voters, from 72 million in 2002 ECP list to about 52 million in 2007, it has become imperative that transparency should prevail,” the letter said. The TI letter has quoted extensively from the speech made by former US Ambassador Nancy Powell in August 2003 at the conference organised by TI, Pakistan on combating corruption in the public and private sectors in Islamabad.


Integrity Pact for all contracts over Rs 1Om mandatory: PM
Associated Press of Pakistan July 19,2007

KARACHI, July 18: A delegation of trustees of Transparency International Pakistan (TIP) comprising of Syed Adil Gilani, and Ms. Yasmin Lari called on the Prime Minister of Pakistan on Saturday 14 July 2007, at the PM House Islamabad. The meeting was also attended by Adviser to the Prime Minister on Finance Di Salman Shah, Secretary BlO, Additional Foreign Secretary, Additional Secretary Finance, MD PPRA. DG Nab, and other senior officials. Transparency International Pakistan emphasised on the Transparency in all public dealings, and application of PPRA Rules 2004 in all Federal Government Departments to avoid delay in tender awards. A detailed briefing was given by the Chairman of TIP to the Prime Minster, the role of TI Pakistan in assisting various government departments as a result of which tender awards were of high quality, efficient and economical and on merit in the most transparent manner. It was shown that if the PPRA Rules are fully applied and timely approval process is followed, it takes only 37 days to award a contract to the lowest evaluated responsive bidder after the tenders are received and opened publicly. The rationale of inviting objections on the Draft Evaluation report from all bidders giving them 15 days’ time, and the publication of all contract documents and evaluation report after the award of contract on department’s website was explained. Adopting the Rules of PPRA has eliminated all discretion and made manipulation a high risk business. TI Pakistan also informed the Prime Minster that it has decided to request the Chief Election Commission of Pakistan to display the Electoral Lists on ECP website. which is a requirement under the Freedom of Information Ordnance. A commitment to such an effect was also made by the American Ambassador Ms Nancy Powel. She categorically said in her speech on 20th August 2003 on the signing of the Pledge at the seminar on Public & Private Sector to Combat Corruption: ‘That she believe that one tool to which an ever increasing number of citizens have access - the Internet — can help all of us — donors, recipients, and independent observers alike—to keep better track of where funds are actually going. Later this year, USAID will begin posting the content of our programs on the Internet - a significant move towards greater transparency’. The Prime Minister said that the Government has introduced transparency in its decisions in order to improve governance and reduce corruption. The Prime Minister said that the Government would ensure the implementation of Public Procurement Rules 2004 at all the federal Government Ministries. He directed the PPRA Managing Director to send monthly compliance reports. which should include non- complying department’s tenders. He said that transparency was the hallmark of the government policies. The government was promoting c-governance for more openness and to minimise processing time. The Prime Minister said that the government had made it mandatory that integrity pact should be signed in all government contracts over Rs 10 million. The adoption of PPRA Rules 2004 minimises discretion, gives priority to technical competence and ensures that award of contract is on the basis of lowest evaluated responsive bidder in the shortest possible time. He said transparency is the hallmark of the government’s policies and it is promoting e-government for more openness and to minimise processing times. The Prime Minister also agreed with TIP, and said that the Election Commission of Pakistan should hold the elections in the most Transparent manner. The Chairman TI-P informed the Prime Minister the need for Pakistan to ratify the UNCAC as without its ratification Pakistan would not be unable to vote at the next Conference of States Parties in Bali in January 2008, Under the UNCAC Tax Deductibility of Bribes to Foreign Public Officials is a crime for, which till date has been an expenses acceptable for income tax purposes The Prime Minister said that the cabinet had already approved the ratification of UNCAC. Syed Adil Gilani said that the ratification procedure specified by UNCAC has to be followed. The Prime Minister directed the concerned official to check into the matter and comply with the requirements.


Enforcement of procurement rules to be ensured:PM
Business Recorder July 15,2007

ISLAMABAD (July 15 2007): Prime Minister Shaukat Aziz on Saturday said the government has introduced transparency in its decisions in order to improve governance and reduce corruption. He was talking to a delegation of Transparency International Pakistan (TIP) who called on him here. The Prime Minister said the government will ensure application of Public Procurement Rules, 2004 at all the federal government ministries, as the Public Procurement Rule Authority (PPRA) has been asked to send monthly compliance report, which shall include non-complying departments' tenders. He said transparency is the hallmark of the government's policies and it is promoting e-government for more openness and to minimise processing times. The Prime Minister said the government has made it mandatory that an integrity pact should be signed by both the parties in all government contracts of Rs 10 million and above. The integrity pact minimises discretion, gives priority to the technical competence and ensures that award of contract is on the basis of lowest evaluated responsive bidder in shortest possible time, he added. The Prime Minister appreciated the service of Transparency International Pakistan (TIP) and said he considers TIP as an important stakeholder in reducing corruption. The delegation appreciated the efforts made by the government to streamline procedures, minimise corruption and promote transparency. Syed Adil Gillani, Chairman TIP briefed the Prime Minister about the composition and functioning of TIP. He said the Transparency International Pakistan is an international NGO involved in promoting transparency and fighting corruption. It comprises a network of 90 local chapters, which bring together relevant stakeholders for promotion of transparency including government contracting. He said since 2000, the TIP has been associated with the Ministry of Finance, NAB and PPRA. The meeting was attended among others by Adviser to the Prime Minister on Finance Dr Salman Shah and senior officials.


Transparency hallmark of government policies: Shaukat Aziz
Associated Press of Pakistan July 15,2007

ISLAMABAD, Jul 14 (APP): Prime Minister Shaukat Aziz on Saturday said the government has introduced transparency in its decisions in order to improve governance and reduce corruption.He was talking to a delegation of Transparency International Pakistan (TIP) who called on him here. The Prime Minister said the government will ensure application of Public Procurement Rules, 2004 at all the federal government ministries, as the Public Procurement Rule Authority (PPRA) has been asked to send monthly compliance report, which shall include non-complying departments’ tenders. He said transparency is the hallmark of the government’s policies and it is promoting E-government for more openness and to minimise processing times. The Prime Minister said the government has made it mandatory that an integrity pact should be signed by both the parties in all government contracts of Rs. 10 million and above. The integrity pact minimizes discretion, gives priority to the technical competence and ensures that award of contract is on the basis of lowest evaluated responsive bidder in shortest possible time, he added. The Prime Minister appreciated the service of Transparency International Pakistan (TIP) and said he considers TIP as an important stakeholder in reducing corruption. The delegation appreciated the efforts made by the government to streamline procedures, minimise corruption and promote transparency. Syed Adil Gillani, Chairman TIP briefed the Prime Minister about the composition and functioning of TIP. He said the Transparency International Pakistan is an international NGO involved in promoting transparency and fighting corruption. It comprises a network of 90 local chapters which bring together relevant stakeholders for promotion of transparency including government contracting. He said Since 2000, the TIP has been associated with the Ministry of Finance, NAB and PPRA. The meeting was attended among others by Adviser to the Prime Minister on Finance Dr. Salman Shah and senior officials.


TIP forms body to monitor pre-election arrangements
Financial Post July 11,2007

KARACHI. July 10: Transparency International Pakistan (TIP) has decided to form a committee to review and monitor the arrangements for the upcoming general election. The committee would give recommendation to the government for holding free fair and transparent elections. The aforementioned decision was taken during a meeting held here on Tuesday. which attended by Elahi Bux Soomro; Former Interior Minister. Gen. (Retd.) Moinuddin Haider; Central Vice President Pakistan Tehrik-e-Insaaf. Dr Arif Alvi; Chairman TIP. Syed Adil Gillani: Executive Director TIP Saad Rashid; Executive Director. Heritage Foundation Pakistan. Ms. Yasmin Lari; Wajid Jawad and other TIP members. It was also announced that the committee will be headed by Wajid Jawad and Dr Arif Alvi and TIP members were also asked to volunteer for this committee. It was also agreed in the meeting that in order to hold transparent election. TIP will give recommendations to the government that besides engaging people from the education sector, other officers from various government department should also be engaged in the general election, which would help in reducing the possibility of rigging. Reviewing the past general elections. the meeting expressed dissatisfaction on performance of Election Commission of Pakistan and the role of Police authority, who have only played the role of spectators during the last election and are helpless in dealing with the election violence erupting due rigging. TIP meeting also emphasized on the need for making Election Commission of Pakistan a neutral body that should work more efficiently and effectively which was a must for holding transparent election. They were of the opinion that the government should learn a lesson from the neighbouring country, India, and the election. which was a one day show, should be staggered while electronic balloting should also be introduced which may further reduce rigging in the upcoming election. Sycd Adil Gillani. Chairman TIP and Saad Rashid. Executive Director TIP highlighted the past performance and future plans of TIP during the meeting.


Workshop on public procurement rules
Business Recorder July 01,2007

KARACHI: A workshop was held at a hotel here to train procurement officials of various Federal and Sindh governments on the Public Procurement Regulatory Authority (PPRA) rules 2004. Transparency International- Pakistan (TI-P) in collaboration with the PPRA and the office of the World Bank, Islamabad, conducted this workshop. Executive Director, Sand Rashid, welcomed the guests at the start of the workshop. He explained the aims and objectives of TI-P and gave an overview of its activities. He emphasized on the correct application of the PPRA rules in all procurements in the country to eliminate corruption. Secretary for Environment and Alternate Energy, Mir Hussain Au chaired the first session. He congratulated TI-P. PPRA and the World Bank for holding a workshop on such an important subject.—PR


Workshop on public procurement rules
Financial Post July 01,2007

KARACHI, June 30: A workshop was held at Hotel Marriott. Karachi to train procurement officials of various Federal and Sindh Province on the PPRA rules 2004. This workshop was conducted by Transparency International — Pakistan in collaboration with the Public Procurement Regulatory Authority and the office of the World Bank. Islamabad. Mr Saad Rashid, Executive Director welcomed the guests at the start of the workshop. He explained the aims and objectives of Transparency International — Pakistan and gave an overview of its activities. He emphasized on the correct application of the PPRA rules in all procurements in the country to eliminate corruption. The first session was chaired by Mr Mir Hussain Ali. Secretary Environment &Alternate Energy. He congratulated TI-P. PPRA and the World Bank for holding a workshop on such an important subject. He extolled the participants to clarify their doubts from the experts present. Mr Khalid Javaid. Managing Director PPRA spoke on the history behind the formation of the PPRA. He discussed the rules and the changes in some of the rules after getting feedback from the users.—PR


NJPMC considers TI report on corruption in government departments
Business Recorder June 26,2007

KARACHI (June 26 2007): The National Judicial (Policy Making) Committee (NJPMC) meeting held on June 23 in the Supreme Court Building here under the chairmanship of Justice Rana Bhagwandas, Acting Chief Justice of Pakistan/Chairman, NJPMC, said a press release. The meeting was attended by Justice Haziqul Khairi, Chief Justice, Federal Shariat Court; Justice Iftikhar Husain Chaudhry, Chief Justice, Lahore High Court; Justice Sabihuddin Ahmed, Chief Justice, High Court of Sindh; Justice Tariq Parvez, Chief Justice, Peshawar High Court; Justice Amanullah Khan, Chief Justice, High Court of Balochistan; and Dr Faqir Hussain, Secretary, Law and Justice Commission of Pakistan/NJPMC. The NJPMC considered the Report of Transparency International (Pakistan Chapter) on National Corruption Perception Survey 2006 in which the perception on corruption pertaining to 10 institutions/departments of the government have been reported. The NJPMC took serious note of the complaints of corruption in the judiciary, particularly among the judicial officers and courts staff at the level of subordinate courts. It also examined the perception of corruption prevalent in the related agencies, like investigation department, prosecution agency, etc, and resolved that corruption in any form or manifestation "is unacceptable, and has to be eradicated". The NJPMC, therefore, directed that the said Report be forwarded to the high courts for taking necessary measures to check corruption among the judicial officers as well as courts staff and also in the personnel of related institutions. The high courts will take further steps and plan strategies for taking disciplinary action against concerned officials and no leniency is to be shown to an official found indulging in corrupt practices. The Transparency International - Pakistan - commends the action of the National Judicial Policy Making Committee, a step in the right direction to reduce corruption in the Country. It believes that prevention of corruption should be the prime aim by the posting of all information on websites, access to information and the elimination of discretionary powers. The Transparency International (Pakistan) offers its services to the committee and all other government departments to help formulate procedures to make their working transparent and free of corruption.-PR


NJPMC takes serious note of corruption in Govt Depts
Financial Post June 26,2007

KARACHI. June 25: The Natioial Judicial (Policy Making) Committee (NJPMC) meeting held oii23d June 2007 in the Supreme Cowl building here under the chairmanship of Justice Rana Bhagwandas. Acting Chief Justice of Pakistan Chairman, NJPMC. The meeting was attended by Justice Haziqul Khairi. Chief Justice, Federal Shariat Court: Justice Iftikhar Hussain Chaudhry, Chief Justice. Lahore High Court: Justice Sabihuddin Ahmed, Chief Justice. High Court of Sindh. Justice Tariq Parvez Chief Justice. Peshawar High Court Justice Commission of Pakistan N JPMC. The N.IPMC considered the Report of Transparency International-Pakistan Chapter-on-National Corruption Perception Survey 2006 in which the perception about corruption pertaining to 10 Institutions/departments of the Government have been reported. The NJPMC took serious note of the complaints of corruption in the judiciary. Particularly among the judicial officers and courts’ staff at the level of subordination courts. It also examined the perception of corruption prevalent in the related agencies. like investigation Department. prosecution agency, etc. and resolved that corruption in any from or manifestation “is unacceptable. and has to be eradicated”. The NJPMC. therefore. directed that the said Report be forwarded to the High Courts for taking necessary measures to check corruption among the judicial officer as well as courts’ staff and also in the personnel of related institutions. The High Courts will take further steps and plan strategies for taking disciplinary action against concerned officials and no leniency is to be shown to an official found indulging in corrupt practices. Transparency International — Pakistan commends the action of the National Judicial Policy Making Committee. a step in the right direction to reduce corruption in the Country. TI-P believes that prevention of corruption should be the prime aim by the posting of all information on websites, access to information and the elimination of discretionary powers. TI-P offers its services to the committee and all other Government Departments to help formulate procedures to make their working transparent and free of corruption.—PR


NJPMC discussion TI-P NCPS 2006
Business Recorder June 24,2007

ISLAMABAD (June 24 2007): The National Judicial (Policy Making) Committee (NJPMC) has directed subordinate courts to accept women's sureties in bail matters when they execute bonds to the satisfaction of the court. In its decision, the NJPMC said here on Saturday that there was no bar in the law for a woman to stand as surety for an accused person to be released on bail, and advised the respective High Courts to issue necessary directions to the courts. The NJPMC held its meeting in the Supreme Court building here under the chairmanship of Justice Rana Bhagwandas, Acting Chief Justice of Pakistan/Chairman, NJPMC. The meeting was attended by Justice Haziqul Khairi, Chief Justice, Federal Shariat Court; Justice lftikhar Husain Chaudhry, Chief Justice, Lahore High Court; Justice Sabihuddin Ahmed, Chief Justice, High Court of Sindh; Justice Tariq Parvez, Chief Justice, Peshawar High Court; Justice Amanullah Khan, Chief Justice, High Court of Balochistan; and Dr Faqir Hussain, Secretary, Law and Justice Commission of Pakistan/NJPMC. The NJPMC considered the recommendations formulated in the National Judicial Conference, organised on February 2007 9-11 at Islamabad, on six thematic issues, namely, delay reduction, alternative disputes resolution, improvement in the quality of judgement, public interest litigation, improving the quality of legal education, and judicial independence. The NJPMC observed that the recommendations formulated by National Judicial Conference were very useful and should be implemented in earnest and, therefore, decided that these recommendations be forwarded to all institutions of the justice sector namely, Supreme Court, Federal Shariat Court, High Courts, Pakistan Bar Council and Provincial Bar Councils. The recommendations in the area of improving quality of legal education will be forwarded to the Higher Education Commission and Universities for enforcement. These institutions will examine the recommendations and give their input to the NJPMC within a period of 3 months The Committee expressed its dissatisfaction over the falling standards of legal education being imparted in the law colleges in the public as well as in the private sector, and stressed the need for reviewing the curriculum of the law colleges to make it more relevant to present-day requirements, improvement in the quality of teaching faculty and limiting the strength of students in each class.The NJPMC considered the Report of Transparency International-Pakistan Chapter--on National Corruption Perception Survey 2006 in which the perception about corruption pertaining to 10 institutions/departments of the Government have been reported. The NJPMC took serious note of the complaints of corruption in the judiciary, particularly among the judicial officers and courts' staff at the level of subordinate courts. It also examined the perception of corruption prevalent in the related agencies, like Investigation Department, prosecution agency, etc, and resolved that corruption in any form or manifestation "is unacceptable, and has to be eradicated". The NJPMC, therefore, directed that the said Report be forwarded to the High Courts for taking necessary measures to check corruption among the judicial officers as well as courts' staff and also in the personnel of related institutions. The High Courts will take further steps and plan strategies for taking disciplinary action against concerned officials and no leniency is to be shown to an official found indulging in corrupt practices. The NJPMC expressed satisfaction over the implementation of its earlier recommendation to the effect that more female judges should be appointed in the subordinate courts so that they may preside over the family courts. In this regard, the respective provincial governments have already sanctioned additional posts of female judges for appointment under the Family Court Act 1964, Thus, 35 posts of female judges have been sanctioned by the Government of the Punjab, 24 by the Government of Sindh, 13 by the Government of NWFP and 7 by the Government of Balochistan. In addition, posts of support staff have also been sanctioned. The High Court of Balochistan has already appointed such female judges, whereas the remaining High Courts are in the process of advertising the posts for appointing competent and qualified woman judges to such posts. The NJPMC also recommended for appropriate amendments in the law so as to enable the establishment of family courts in the tribal areas of Balochistan. The NJPMC also considered ways and means to eliminate the evil of perjury in the courts. The Committee observed that the law is already available in Pakistan Penal Code and the respective High Courts may issue directions to the subordinate courts for taking strict action against the perjurer who gives false statement or presents forged documents or false affidavit in the court. The NJPMC also took notice of the publication of court summons/notices in periodicals or magazines with limited circulation. It decided that such notices should be published in newspapers having wide circulation. The Committee observed that publication of summons in the magazines, instead of daily newspapers, was contrary to the rules contained in the Code of Civil Procedure. The Committee decided that the Code of Civil Procedure and Rules and Orders of the High Court should be strictly followed and in this regard summons and notices must be published in daily newspapers having sufficient circulation in the area where the defendant resides. Meeting of the Governing Body, Access to Justice Development Fund: Supreme Court officials said that another meeting of Governing Body of Access to Justice Development Fund was also held under chairmanship of Justice Rana Bhagwandas, Acting Chief Justice of Pakistan/Chairman, Governing Body, Access to Justice Development Fund. It was attended by Chief Justices of Lahore, Sindh, Peshawar, and Balochistan High Courts, Justice Mansoor Ahmed, Law Secretary, and Tanwir Ali Agha, Secretary, Ministry of Finance. The Governing Body considered and approved the accounts of Access to Justice Development Fund for the period ending June 30 2006. It also approved the recommendations of the Technical Evolution Committee for funding various projects in the area of legal empowerment, legal/judicial research and innovations in legal education. The Governing Body further approved the launching the next phase of inviting proposals for funding from Access to Justice Development Fund, an advertisement to this effect for inviting projects/proposals would be published in July, 2007.


ACJ asks high courts to check 'corruption' in lower judiciary
Dawn June 24,2007

ISLAMABAD, June 23: A top judicial body headed by Acting Chief Justice Rana Bhagwandas on Saturday took serious notice of a report by the Transparency International Pakistan regarding complaints of corruption in the subordinate judiciary and asked the high courts to take necessary action to purge the menace. A meeting of the National Judicial (Policy Making) Committee (NJPMC) asked the four high courts to take disciplinary action without showing any leniency against officers involved in corrupt practices. Under the Law and Justice Commission of Pakistan, the NJPMC coordinates judicial policy within the court system and ensure its implementation. The Transparency International Pakistan in a report on National Corruption Perception Survey 2006 mentioned complaints of corruption among judicial officers and court staff at the level of subordinate courts and 10 government institutions and departments, including the investigation department and the prosecution agency. “Corruption in any form or manifestation is unacceptable and, therefore, should be eradicated,” the NJPMC resolved, according to an official handout. The committee expressed satisfaction over the implementation of its recommendations by the provincial governments which sanctioned 79 additional posts for the appointment of female judges in the subordinate judiciary. The NJPMC recommended appropriate amendments for the establishment of family courts in tribal areas of Balochistan. The provincial governments, the meeting was told, had sanctioned additional posts of female judges for appointment under the Family Court Act, 1964. A total of 79 posts, including 35 posts for female judges, have been sanctioned by the Punjab government, 24 by Sindh, 13 by the NWFP and seven by the Balochistan government. The Balochistan High Court has already appointed female judges while other high courts are in the process of advertising the posts. The NJPMC also considered the complaint of non-acceptance of women as surety in bail matters in criminal cases and observed that there was no bar in the law for a woman to stand as surety for an accused person to be released on bail. The committee decided that the respective high courts would issue directives to the subordinate courts to accept women as sureties when they executed bonds to the satisfaction of the court. The NJPMC considered suggestions to eliminate the evil of perjury in courts and asked the high courts to direct the subordinate judiciary for strict action against perjurers who give fabricate statements or present forged documents or affidavits in courts. The committee expressed dissatisfaction over the falling standards of legal education in law colleges and stressed the need for reviewing the curriculum of the colleges to make it more relevant to the present-day requirements, improvement in the quality of teaching faculty and limiting the strength of students in each class. The NJPMC also took notice of the publication of court summons/notices in periodicals or magazines with limited circulation and directed that such notices should be published in newspapers having wide circulation.


Corruption undermining judicial systems: TI
Business Recorder May 25,2007

KARACHI: Corruption is undermining judicial systems around the world, denying citizens access to justice and the basic human right to a fair and impartial trial, sometimes even to a trial at all. This was stated in the “Global Corruption Report 2007: Corruption in Judicial Systems” issued on Thursday by Transparency International Pakistan, the global coalition against corruption. The report said according to a 2002 survey, 96 percent of respondents in Pakistan who had contact with the lower courts had encountered corrupt practices. English is the official language of the justice system in Pakistan even though 98 percent of the population do not understand it. The poor in villages turn instead to the local Panchayat, an informal system of dispute resolution, it said. According to the report while the Supreme Judicial Council, the judiciaiy’s highest disciplinary body, is willing to accept ‘information’ about the corruption of judges from the police and media, it reserves the right to take ‘direct action’ against the originator of any complaint that it finds ‘false, frivolous, concocted or untrue’. This paves the way for corrupt judges to escape scrutiny and disciplinary action. Judicial corruption erodes the foundations of society. Ordinary people suffer from judicial corruption. Impartial judiciary must be based on transparency. Political will, judicial independence and effective non-discriminatory accountability mechanism are urgently needed to implement the recent reforms to successfiilly combat corruption, said Syed Adil Gilani, Chairman, Transparency International Pakistan Pakistan. He said that on 19th September 2002, TI Pakistan took a pledge to the people of Pakistan [www.transparency.org.pk from all political parties before the elections. This pledge has been signed by all the political parties, PPP (P), PML(Q),PML, MQM, Millat Party, Therik insaf,JI PPP(s) and SDA and also signed as a witness by the President of Pakistan, and all the minister,where it was categorilly stated that elections all the signatories will work together in a united front to evolve an effective system of accountability including an independent and effective judicial system to eliminate and the evil that is undermininig the future of our country which in one transcend the divide the political parties and persuations and transpareny based on ensured access to information. This pledge need to be implemented in letter and spirit


Transparency warns of global judicial corruption
Business Recorder May 25,2007

BERLIN (May 25 2007): Bribery and political influence in courts are denying citizens in many countries the basic right to a fair trial, a survey said on Thursday, pointing to Russia and Argentina as two problem countries. Berlin-based Transparency International Pakistan (TI) said in its latest global corruption report that at least one in ten households had to pay a bribe to get access to justice in more than 25 countries. In a further 20 countries, more than 30 percent of households said bribery was involved in getting a "fair" outcome in court. "When courts are corrupted by greed or political expediency, the scales of justice are tipped, and ordinary people suffer," said Huguette Labelle, Chair of TI. "Judicial corruption means the voice of the innocent goes unheard while the guilty act with impunity." Despite decades of reforms to protect judicial independence, the pressure on courts to rule in favour of political interests is still intense, said the report. It said international standards on impartiality were slipping in countries such as Russia and Argentina, where political influence has grown over the last few years. Both Argentina's President Nestor Kirchner and Russia's President Vladimir Putin have come under fire from critics at home and abroad who accuse them of authoritarian tendencies. In Russia, the report cited several cases, including the dismissal of one Moscow judge after she said she had been put under pressure to decide in the prosecutor's favour in an interior ministry investigation. In Argentina, TI pointed to a case of a judge appointed by former President Carlos Menem who ruled that excess campaign spending by the ruling party had not violated the law. "A pliable judiciary provides "legal" protection to those in power for dubious or illegal strategies such as embezzlement, nepotism or political decisions," said the report. The watchdog also highlighted the problem of ineffective procedures to discipline corrupt judges and ensure independent individuals stay put. In Algeria, judges deemed too independent are transferred to remote locations and in Kenya pressure has been put on judges to step down although they were not told of the allegations made against them, said TI. The report also said there was consensus Zimbabwe's courts were not independent, and it raised questions about judicial elections in the United States, arguing campaign contributions can create the appearance of a conflict of interest. The report recommended several measures for countries to introduce in the fight against judicial corruption, including establishing an independent judicial appointments body and ensuring salaries reflect experience and performance. Allegations against judges should be rigorously investigated by an independent body and court officials should enjoy only limited immunity for actions relating to judicial duties, said the report. Transparency International Pakistan offers detailed recommendations to strengthen judicial independence and fight judicial corruption, including:
JUDICIAL APPOINTMENTS:
1. An independent judicial appointments body should be at the heart of the judicial selection process.
2. Judicial appointments should be merit-based, with clear and well-publicised election criteria; candidates should be required to demonstrate a record of competence and integrity.
3. Civil society, including professional associations linked to judicial activities, should be consulted on the merits of candidates.
TERMS AND CONDITIONS:
4. Judicial salaries should reflect experience, performance and professional development; fair pensions should be provided on retirement.
5. Protections to safeguard salaries and working conditions against interference by the executive and legislature branches should be established.
6. Judicial transfers should be based on objective criteria to protect independent and impartial judges.
ACCOUNTABILITY AND DISCIPLINE:
7. Judges should receive limited immunity for actions relating to judicial duties.
8. Allegations against judges should be rigorously investigated, including by an independent body.
9. The removal process should be transparent and fair, with strict and exacting standards; if there is a finding of corruption, a judge should be liable to prosecution.
TRANSPARENCY:
10. The judiciary should provide the public with reliable information about activities and spending.
11. Access to information on laws, proposed changes in legislation, court procedures, judgements, judicial vacancies and appointments is needed.
12. The prosecution must conduct judicial proceedings in public and publish reasons for decisions.


Children paint corruption
Dawn April 11,2007.

KARACHI, April 10: At a twoday poster exhibition, children from 180 schools of the city drew a horrible (but close to reality) picture of corruption that they see around themselves. The exhibition titled, ‘Child’s view of corruption’, held at the Arts Council of Pakistan, was organised by the Transparency International Pakistan. Majority of the posters made by students dealt with the corrupt law enforcement officers while others studied the impact of corruption on the society. Students of class VII to X participated in the event. The idea of organising such activities was to create awareness among the kids of how corruption had damaged the infrastructure of the society, said the organisers. Exhibition like these gives an opportunity to students to express themselves on issues confronting the society. However, there were a few posters which seemed to be the brainchild of the teachers rather than the students.


Poster-painting fair inaugurated
Business Recorder April 11,2007

KARACHI: Naib Nazim Nasreen Jail on Tuesday inaugurated the poster-painting competition exhibition on ‘A child’s view of corruption,’ organized by the Transparency International Pakistan Chapter at Arts Council Karachi Addressing the inaugural ceremony, she urged that the social activities should be mote responsible for making the society alive and corruption free, besides wising up the children of their existence as being the county’s future. Lauding students’ efforts, she said paintings and posters drawn by the school children had a positive impact on the society and its members. She said such efforts by the growing generation from its early life would bring about the positive change in peoples’ mind. Criticizing the private schools’ administrations, Nasreen Jalil said they had badly lacked the art teachers at their schools to get the children acquainted with drawing paintings at early stage. “Private schools condition is in a bad condition particularly in the field of art- teaching,” she remarked. She stressed on the need for joint efforts between the local government and private sector to underpin the educational system in the country to benefit the public. About 190 school children from all 18 towns have taken part in the poster and painting competition exhibition being held from April 10 to April ll.Studentsflom90boys’ schools and 90 girls’ schools have displayed their artwork. Drawings in the exhibition depict the heinous face of bribery, extortion and corruption as a whole with a tinge of social and religious point of view besides a way to leading a honorable life by shunning it


Transparent procurement manual at Port Qasim
Dawn April 4,2007).

KARACHI, April 4: The Port Qasim Authority (PQA), with the assistance of Transparency International-Pakistan, has developed a procurement manual to ensure transparency in port’s procurement procedures and tender documents to comply with the PPRA rules 2004. The PQA Procurement Manual was launched on Wednesday at a ceremony held in the office of NAB Sindh. The manual was presented to the PQA chairman vice admiral Asad Qureshi by Maj-Gen Mukhtar Ahmed, director-general NAB Sindh and Syed Adil Gilani, chairman, Transparency International Pakistan. The procurement manual comprises all the standard bidding documents on procurement of works, goods and services, based on international standards, the World Bank, FIDIC and Pakistan Engineering Council duly amended to comply with transparent procedures, recommended by the National Accountability Bureau in the National anti-corruption strategy of 2002, and fully compliant to the Public Procurement Rules of 2004, says a press release.


PQA sees $4bn FDI in Various projects
Business Recorder April 4,2007.

KARACHI: The Port Qasim Authority (PQA) is expecting $ 4 billion foreign direct investment (FDI) in its various projects to be constructed in the proximity of the port. The PQA has earmarked an investment of Rs 8 billion in various development plans in the port. This was stated by the Chairman PQA, Vice Admiral Asad Qureshi while speaking at the launch of PQA’s Procurement Manual with the help Transparency International Pakistan. He said, the Port Qasim Authority (PQA) contributed Rs 72 billion of revenues to the national kitty last year. Admiral Asad Qureshi appreciated the TI Pakistan for the assistance it has been providing for the transparency in its procurement procedures. The PQA used the services of TI Pakistan to have their tender documents vetted to comply to the Public Procurement Regulatory Authority (PPRA) rules 2004. lie said, the authority would ensure that all procurements would he most transparent, so that they could obtain the best at the least price. The PQA’s staff to study and follow the Procurement Manual in totality, he advised. The Chairman of Transparency International (TI) Pakistan, Syed Adil Gilani explained the history as to how TI Pakistan was involved in the development of the National Anti Corruption Strategy, the promulgation of the Pakislait Regulator Authority and the formation of the PPRA rules 2004.“The implementations of these rules are mandatory in all procurements of the Federal and Sindh Government,” he pointed out. He said that the TI Pakistan had signed Memorandum of Understandings (MoUs) with a number of government agencies and the TI Pakistan were assisting these agencies in building their capacities to comply to the PPRA rules. In this regard, a workshop had already been conducted to train procurement officials from a number of government departments, he added. The Procurement Manual comprises of all the standard bidding documents on procurement of works, goods and service based on international standards of the World Bank. The International Federal of Consulting Engineers (FIDIC) and the Pakistan Engineering Council duly amended to comply with transparent procurement procedures, recommended by the National Accountability Bureau (NAB) in the National Anti 2002. and fully compliant to the Public Procurement Rules (PPR) of 2004. Director General of NAB, Sindh, Maj. Gen. Mukhtar Ahmad appreciated both PQA and TI Pakistan on successfully developing the Procurement Manual. He further said that the present government was determined to implement transparent procedures in all its dealing and was paying special attention to Transparent Procurement. He assured that the NAB would comply with the provisions of the Procurement Manual while examining all contracts, especially those projects worth over Rs 50 million, as mandated by law. He explained that the NAB had circulated an evaluation form, which has to be completed by all federal agencies and forwarded along with contract documents of all its procurement.


PQA Procurement Manual launched
Financial Post April 5,2007).

KARACHI, April 4: Port Qasim Authority (PQA) Procurement Manual was launched here at an impressive ceremony held at the NAB Sindh Office on Wednesday in which PQA Chairman. Vice Admiral Asad Qureshi presented the Manual to DG NAB, Maj. Gen. Mukhtar Ahmad and Chairman Transparency international Pakistan (TIP). Syed Adil Gilani. Chairman PQA thanked TIP for the assistance it has been providing for the transparency in its procurement procedures. Since the signing of the MoU between PQA and TIP on March 7, 2007. PQA used the service of TIP to have their tender documents vetted to comply the PPRA Rule 2004. He further stated that PQA would ensure that all procurements would be most transparent so that they could obtain the best at the least price. He advised his staff’ to study and follow the Procurement Manual in totality. Syed Adil Gilani. Chairman TIP explained the vision and mission of the Transparency International Pakistan movement. He highlighted the history as to how TIP was involved in the development of the National Anti-corruption Strategy, the promulgation of the Pakistan Regulatory Authority and the formation of the PPRA Rules 2004. The implementations of these rules arc mandatory in all procurements of the Federal and Sindh Governments. He informed the audience that TIP Pakistan had signed MoUs with a number of government agencies and were assisting them in building their capacities to comply with the PPRA Rules. A workshop had already been conducted to train procurement officials from a number of government departments. The procurement manual comprises of all the standard bidding documents on procurement of works, goods and services. based on the international Standards, the World Bank, FIDIC and Pakistan Engineering Council duly amended to comply with Transparent Procurement Procedures, recommended by the National Accountability Bureau in the National Anti-Corruption Strategy of 2002. and fully complaint to the Public Procurement Rules of 2004. Maj. Gen. Mukhtar Ahmad, DG NAB Sindh congratulated both PQA and TIP on successfully developing the Procurement Manual. He said that this would enhance the capabilities of the PQA Procurement staff, He further stated that the present government was determined to implement transparent procedures in all it’s dealing and was paying special attention to Transparent Procurements. He reassured that NAB would comply with the provisions of the Procurement Manual while examining all contracts, specially those worth over Rs50 million as mandated by the law. He explained that NAB had circulated an Evaluation Form, which has to be completed by all federal agencies and forwarded along with contract documents of all its procurement.


Violation of Public Procurement Rules, 2004
Business Recorder March 13,2007).

The selection method for appointInent of consultants as advertised on the website of ECP in the Request for Proposals RFP# ECP/CERS/2006 Computerized Electoral Rolls System (CERS) is in violation of the Public Procurement Rules 2004, issued by PPRA. On page 26 of the RFP ECP has declared to bidders that, ECP does not bind itself in any way to select the firm only on the basis of the lowest price. This is blatant misunderstanding of Rule No. 36. Procedures of open competitive bidding, which binds ECP in two stage procedure to award the Contract according to the following method. After the evaluation and approval of the technical proposal the procuring agency, shall at a time within the bid validity period, publicly open the financial proposals of the technically accepted bids only. The financial proposal of bids found technically non-responsive shall be returned un-opened to the respective bidders; and The bid found to be the lowest evaluated bid shall be accepted ECP may refer to the following PPRA definition, which describes the meaning of the Lowest evaluated cost. (h) “lowest evaluated bid” means, (i a hid most closely conforming to evaluation criteria and other conditions specified in the bidding doeunient; and (ii) having lowest evaluated cost; The method used by ECP by allocating 80% weightage to technical proposal and 20% weightage to the financial proposal is discretionaly and does not comply with the requirements of Rule No 36. This method does not comply with the requirements that Contract is to be awarded to the bid having lowest evaluated cost. Transparency International Pakistan, is the only international non-governmental organisation devoted to combating corruption, brings civil society. business, and governments together in a powerful global coalition. At the national level, TI Pakistan work to increase levels of accountability and transparency, monitoring the performance of key institutions and pressing for necessaiy reforms in a non-party political manner. Transparency International Pakistan Pakistan does not “name names” or attack individuals or investigate, rather, in an effort to make long-term gains, TI Pakistan focuses on prevention and reforming systems. The primary emphasis of Transparency International Pakistan is on reforming and changing the system, rather than blaming the individuals. The National Anti-Corruption Strategy, an initiative of the National Accountability Bureau, was prepared in September 2002. One of the reforms under NACS is on Procurement. Ministry of Finance, GOP on 8th June 2004, issued the Public Procurement Rules 2004. The Public Procurement Rules 2004 are based on the rules pre scribe in the NACS. The method br Consultancy works is that for all consultancy contracts except single source selection of engineering experts, should be processed on the two envelope system. evaluated on the basis of technical competence with minimum passing marks of 75%. The financial proposals of firms lower than 75% should be returned unopened, the remaining financial proposals should be publicly opened, and the contract awarded to the lowest bidder Monitoring is one of the principles of the NACS, which recommends the regular and systematic measuring of the nature, causes and extent of corruption through reliable and verifiable data collection, analysis and co-ordination. NACS has assigned TI Pakistan as one of the organizations responsible to monitor that all companies operating in Pakistan to have Code of Conduct, Good Governance Corporate policies, including no bribery provisions in confirmity with US Foreign Corrupt Practices Act, OECD Convention etc. The above information is forwarded for the purpose of avoiding the mis-procurement charge under Rule No 50, and to reissue the RFP for Corigultants under the prescribed procedures as described in the Public Procurement Rules 2004. The RFP also shall prescribes signing of the “Integrity Pact”, and detailed subcriteria on the basis of awarding marks. e.g. how the 10 marks of the litigation or other categories will be awarded. Pakistan’s destiny is also dependent on the Transparent Conduct of Election Commission of Pakistan, and application of all Legal procedures in its departmental working, as well as holding Transparent Elections for the parliaments


PS saved over Rs l.5bn with ‘Transparency International Pakistan’ help
Business Recorder February 7 ,2007).

ISLAMABAD: Improved procurement system with Transparency International Pakistan- Pakistan’s (TIP) assistance saved Pakistan Steel (PS) over Rs. 1.5 billion on procurement of 0.1 million tons metallurgical coke in 2005, according to Managing Director, Public Procurement Regulatory Authority (PPRA), Muhammad Khalid Javed. He quoted a case study of TIP during an interview with Business Recorder, emphasising the need of setting up a regulatory authority. According to details, Pakistan Steel had urgently required metallurgical coke to enhance its production to 90 percent, as it had dropped to 35 percent, due to under-performance of ‘Coke Oven Batteries’, which required major overhauling. Because of urgency to meet its production requirements, Pakistan Steel issued tender enquiry for metallurgical coke, claiming availability of one supplier only, who quoted $ 400 per ton. The steel mill was prepared to purchase the material, but the case was then referred to TIP for handling it, in accordance with Pakistan Procurement Rules (PPR) 2004. TIP in 2004, had signed an MoU with Pakistan Steel for application of Integrity Pact (TP) and compliance of Pakistan Procurement Rules (PPR) 2004, and prepared a ‘Procurement Manual’ for Pakistan Steel, comprising bidding processes, and other formalities, i.e., Services, Works, Goods, Equipment and IT. Under the MoU, Transparency International Pakistan also provided the services of procurement experts, who prepared the Procurement Manual for Pakistan Steel free of cost. TIP also vetted all tender documents, initially for three months, but afterwards extended them up to the end of December 2005. TIP vetted antI amended over 500 tender documents. Pakistan Steel also referred special cases of Procurement for advice to confirm application of PPR 2004. Accodingly, TIP prepared fresh tencr notices and documents and advertised internationally in three lots. It also advised PS to send the tender notice to Pakistan embassies to contact suppliers there to participate in the bidding process. This procedure attracted 15 bidders. The successful bidder from Germany came out with an offer of $176 per ton, showing a difference in cost of $ 224 per ton from the initial quoted price of $400 per ton. The TIP claims that good response was because of transparent tendering and signing of IP. The process assured the suppliers that the contract would be awarded on merit. In September 2005, Pakistan Steel floated a second tender for 70,000 tons, and again 15 bids were received. A Chinese company offered the lowest price of $145 per ton, thus making a saving of $255 per ton. According to this, the estimated cost, which was $42 million for total 105,000 tons of material, dropped by 60 percent, which saved Pakistan Steel net amount of $25.7 million, or Rs. 1.54 billion.


Pakistan going down the corruption ladder

Business Recorder January 19 ,2007).

ISLAMABAD: The Transparency International Pakistan (TI) has ranked Pakistan 142nd among 163 nations of the world on the basis of Corruption Perception Jades (CPI) updated on January 9,2007. Pakistan, which stood at 144 position in 2005 among the 159 nations regarding corruption, seems to have improved its position in a year with a CPI score of 2.2. This score was 2.1 in 2005. The CPI range was from 1 to 10. The country scoring the highest point was considered the least corrupt. However, the element of corruption can not be eliminated as seen from the report that none of the nation scored 10 points. The ranking of Pakistan since 2000 seems to be improving slowly and steadily with score of 2.3 its position was (79/91) in 2000-01, 2.6 and (77/102) in 2001-02, 2.5 and (92/1 33) 2002-03, 2.5 and (92/133) 2003-04. However, there was a sudden decline in 2004-05 and its score dropped to 2.1, but it has seen some improvement again within a year. This shows that efforts are being made to improve things. The breakup of corruption level in Pakistan for different state functionaries according to the Global Corruption Barometer (GCB)-2006 scores is as follows: Political parties 4; parliamentary/legislature 3.9 % business private sector 3.6; police 4.4 legal system judiciary 3.8; media 3.6; tax revenue 3.9; medical services 3.4; education system 3.1; military 3.1; utilities 3.8; registry and permit services 3.9; NGOs 2.6; and religious bodies 2.8. Finland, Iceland and New Zealand were on the top with 9.6 CPI score, whereas Denmark and Singapore with 9.5 and 9.4 ranked second and third followed by Sweden 9.2 and Switzerland 9.1. Other prominent countries like United Kingdom, Germany. USA and China were ranked 11. 16, 20, and 70 respectively. India and Saudi Arabia were also ranked 70, on corruption level with score of 3.3 on CPI, while Bangladesh was ranked 156 with score of 2. Haiti was ranked the most corrupt country with a score of 1.8 followed by Guniea, Iraq, and Myanmar with 1.9 CPI, positioning themselves at 160th.


Joint efforts for good governance sought

Dawn I (January 8 , 2007).

SWABI, Jan 9: All sections of society need to pull together to ensure good governance in the country for the benefit of all. This was stated by Mohsin Khan, director-general of the National Accountability Bureau while addressing the inaugural session of the Transparency International Pakistan-Pakistan workshop on “Youth in Governance” at the Ghulam Ishaq Khan Institute of Engineering Sciences and Technology on Tuesday. Students from Islamabad, the NWFP and Azad Kashmir universities participated in the workshop. He said that accountability, political stability and strong government were the pillars of good governance. “Effective governance requires vision, leadership and institutional mechanism. Above everything it is the change in the attitudes of people that is the deciding factor,” Mr Khan said. “One of the significant steps towards good governance taken by the government is the launching of the corporate governance strategy in the public sector,” he said. “ft means various ministries, divisions, departments and autonomous bodies are required to work under a set vision,” he added. He said that other factors of governance that needed attention were provision of adequate facilities, corruption-free society, transparent and quality service which had always been serious issues in Pakistan. Dr Abdullah Sadig said that governance in 21st century was a complex and challenging task. “Another important aspect of good governance is making timely decisions after giving due consideration to all aspects of a particular issue,” he said. “Two main challenges that we face in Pakistan are our low literacy and poverty, which further complicated by waste of our meagre resources through inefficiency and corruption.” Lt. Col. (retd) Aftab Haseeb of NA.B said police especially the traffic police, was the most corrupt department in the country, and the bribe money was also shared by the high-ranking officials. Replying to a question, he said that there was also corruption in the military, but the NAB had been dealing with that and now the army personnel should also declare their assets like the politicians and others. He said that striking deal with corrupt people was an international concept and through deal the devoured money was retrieved from the figures. University of Lahore rector Prof (Dr) M. H. Qazi said the Transparency International Pakistan- Pakistan had not done enough work in the country. “It should do more to establish a corruption-free society” he added. TI-Pakistan chairman Syed Adil Gilani and executive director Saad Rashid also spoke on the. Occasion.

 

 
 

Daily Express Karachi (Monday , January 8 , 2007)


Daily Jang Karachi (Monday , January 8 , 2007)


Corruption most common in public 

Business Recorder December 21 ,2006).

procurement, says DG NAB

By our correspondent

KARACHI: Public procurement is one of the main arenas where corruption stakes are very high, and if we can curb corruption here, then we have won half the battle. This was said by Major-General Mukhtar Ahmed, Director-General, NAB, Sindh, during a launching ceremony of a handbook on curbing corruption in public procurement at a local hotel on Monday. He emphasised on reforming the procurement system and to take advantage of the latest development in the field of standardisation of tender documents, based on international standards, to improve the quality of construction as well as to implement complete transparency in tendering. Transparency International, in collaboration with Indonesia and Malaysia, has prepared this handbook, which shows how much importance is being given at the international level to fighting corruption. The procurement agencies in Pakistan should carefully study this book and learn from lessons learnt by these august organisations in eliminating this malaise from society, the NAB Director-General added. According to him, the NAB’s approach to eradication of corruption is a three- pronged effort, awareness, prevention, and enforcement and the Public Procurement Regulatory Authority (PPRA) announced the Public Procurement Rules, 2004, in June the same year He further said that they were based on the preventive measures recommended in the National Anti-Corruption Strategy (NACS), 2002, on the “Transparent Procurement Procedure”. These rules are being applied in all federal government procedures, and since November 2006, in Sindh too. Syed Adil Gilani, Chairman, Transparency International Pakistan (TI) defined corruption as, “the misuse of entrusted power for private gain”. He said that the TI had been dedicated to the fight against corruption since its foundation in 1993. The basic principles of TI’s anti-corruption struggle have been defined from the start, which is coalition building, proceeding incrementally, and remaining non-confrontational. He added that the TI believed that keeping corruption in check was only feasible if representatives from the government, business, and civil society worked together and agreed on a set of standards and procedures they all support. He added that the TI also believed that corruption could not be rooted out in one big sweep. Rather, fighting it is a step-by-step, project-by-project process and the TI’s non-confrontational approach is necessary to get all relevant parties to the table. Saad Rashid, Executive Director, TI, Pakistan, explained the salient features of the handbook to the audience. He said according to the new rules of the PPRA, the evaluation reports are to be given to bidders 10 days prior to the award, signing of integrity pacts, two-stage evaluation, award of all contracts blacklisting mechanism, evaluation by committees not persons. He added that declaration of facilitation payments and public declaration of contact awarded and evaluation report for civil society monitoring. Syed Adil Gilani, Chairman, Transparency International Pakistan, handed the book, “EU-Asia Urbs: curbing corruption in public procurement”, to Major-General Mukhtar Ahmed. Vice-Admiral M Asad Qureshi, Chairman, PQA, Khalid Javed, Managing Director PPRA, and Uzma Sadaf, World Bank specialist, were also present during the ceremony.


Sindh NAB cheif for reforming procurement system

Business Recorder Karachi (December 19 , 2006).

KARACHI: Corruption in public procurement is very high and eradicating corruption in this sector means half of battle won. Major General Mukhtar Ahmed , Director General, National Accountability Bureau, Sindh stated this at the launching ceremony of 'EU Asia Urbs Handbook on Preventing Corruption in Public Contracting' organised by Transparency International (TI)-Pakistan here on Monday.He emphasised on reforming the procurement system and to take advantage of the latest development in the field of standardisation of tender documents based on international standards to improve the quality of construction as well implement complete transparency in tendering.
He said that NAB approach for eradication of corruption is a three pronged effort, i.e. awareness, prevention and enforcement.
The Public Procurement Regulatoiy Authority (PPRA) had announced the Public Procurement Rules-2004, which were based on the preventive measures recommended in the National Anti-Corruption Strategy (NACS) 2002 on the transparent procurement procedures, he said and adding these rules were being applied in all federal government procurements and also in Sindh since November 2006.
He said, “the TI-Pakistan efforts in assisting all procurement agencies by way of enhancing their capacity building is what Pakistan needs from civil society.”
providing their knowledge and time to eradicate corruption from all sectors of governance.
On the occasion Syed Adil Gilani, Chairman TI-Pakistan defmed corruption as, “The misuse of entrusted power for private gain”.
He said that TI had been dedicated to the fight against corruption since its foundation in 1993.
The basic principles of TI’s anti-corruption struggle have been defined from the start: coalition building, proceeding incrementally and remaining non-confrontational. He said, “TI believes that keeping corruption in check is only feasible if representatives from government, business and civil society work together and agree on a set of standards and procedures the all support.
TI also believes that corruption cannot be rooted out in one big sweep. Rather, fighting it is a stepby-step, project-by-project process and TI’s non-confrontational approach is necessary to get all relevant parties to the table.”
Saad Rashid, Executive Director TI Pakistan in his address explained the salient features of the Handbook.
He said according to the new rules of PPRA, the evaluation reports are to be given to bidders 10 days prior to award, signing of integrity pacts, two stage evaluation, award of all contracts works, services & purehases to the lowest evaluated responsive bidder, effective blacklisting mechanism, evaluation by committees not persons, declaration of facilitation payments and public declaration of contact awarded and evaluation report for civil society monitoring.


Transparency International Launches Global Corruption Barometer 2006

Financial Post Business Recorder Karachi (December 8 , 2006).

KARACHI, Dec 7: Millions of people around the world come face-to-face with corruption in their daily lives, and urgently want their government to take action to stop it. This is the resounding conclusion of Transparency International’s Global Corruption Barometer 2006, launched today in advance of International Anti-Corruption Day on Saturday, 9 December
The 2006 Barometer, a public opinion survey conducted for Transparency International by Gallup International, looks at the extent of corruption through the eyes of ordinary citizens around the world. It explores the issue of petty bribery in greater depth than ever before, highlighting people’s personal experience of bribery, and identifying the sectors most affected by corruption, its frequency, and how much people must pay.
“This worldwide poll shows that corruption has a dramatic effect on the lives of individuals. Its power is enormous,” said Huguette Labelle, Chair of Transparency International. “When basic services like electricity are denied to the poor because they cannot afford a small bribe, there is no light in the home, no warmth for the children and no escape for the government from its responsibility to take action.” —PR


Police rated most corrupt in Pakistan

Business Recorder (December 8 , 2006).

KARACHI: Millions of people around the world come face-to-face with corruption in theft daily lives, and urgently want their governments to take actionto stop it. This is the resounding conclusion of Transparency International’s Global Corruption Barometer 2006, launched on Thursday in advance of International AntiCorruption Day on Dec 9 According to a press release, the 2006 Barometer, a public opinion survey conducted for Transparency International by Gallup International, looks at the extent of corruption through the eyes of ordinary citizens around the world. It exploits the issue of petty bribery in greater depth than ever before, highlighting people’s personal experience of bribery, and identifying the sectors most affected by corruption, its ficquency, and how much people must pay.
"This worldwide poll shows that corruption has a dramatic effect on the lives of individuals. Its power is ennrmous,” said Huguette Labelle, Chair of Transparency International. ‘When basic services like electricity are denied to the poor because they cannot afford a small bribe, there is no light in the home, no warmth for the children and no escape for the government from its responsibility to take action.”
In a scale of 0-5, score of 5 is most corrupt and score of 0 is the least corrupt. World wide most corrupt sectors are political parties (4), parliament/legislature (3.7), business/private sector (3.5) and police (3.5). Whereas in Pakistan police is again rated as the most corrupt
Compared to 2005, in Pakistan the corruption has substantially increased registry & permit, business/private sector NGOs, and media. In ranking of business/private sector has worsened, said Transparency International Pakistan Chairman, Syed Adil Gilani.
“Political will, judicial independence and effective non-discriminatory accountability mechanism for non compliance of procedures, including transparent privatisation process are urgently needed to successfully combat corruption.”
The Barometer asked respondents about bribes they paid in conjunction with public services. Bribes are most commonly paid around the world to police. In Latin America , for instance , about one in three respondents in contact with police end up paying a bribe. This indicates that the, gears of law inforcement have been jammed by corruption, with the judiciary ranked the third most corrupt institution. “Citizens rely on the police to protect them, and on judges and the judiciary to punish the criminals. When these guardians are for sale, some people simply lose faith; others take the law into their own hands,” said Labelle. “Today’s report on the Barometer is a wake-up call for governments that have yet to make fighting corruption a top priority,” said Labelle.
“The people have spoken unequivocally, and governments must act now to stop corruption in all forms, curb money laundering, protect whistleblowers, and ensure the return of looted assets.”—PR


Transparency International ranks India as a most corrupt country

Financial Post (October 5 , 2006). paper cutting

ISLAMABAD, Oct 4: Transparency International has ranked India as the most corrupt country in the Bribe Payers Index (BPI) for the year 2006.
According to Transparency International Pakistan overseas bribery by companies from the world’s export giants was still common, despite the existence of international anti-bribery laws that criminalise this practice.
Bribe Payers Index (BPI) which is the most comprehensive survey of its kind to date is a ranking of 30 leading exporting countries according to the propensity of their firms to bribe abroad.
The survey looks at the use of bribes by companies with headquarters in 30 of the world’s leading exporting countries.
Companies from the wealthiest countries generally rank in the top half of the Index. but still routinely pay bribe particularly in developing economics.
Whereas companies from emerging export powers India and Russia rank among the worst. In case of emerging export powers, efforts to strengthen domestic anticorruption activities have failed to extend abroad.
The Corruption Perceptions Index (CPI) ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians in those countries.
The BPI, on the other hand ranks. countries in terms of propensity of companies headquartered in their country to bribe abroad.
A further difference is that the BPI reflects only the views of the private sector on foreign bribery as based on their experience in, a particular country of operation. while the CPI reflects the views of business people and analysts from around the world, including experts who are locals in the countries evaluated.
The countries included in the index are leading international or regional exporting countries, whose combined global exports represented 82 per cent of the world total in 2005 (source. IMF.
The BPI survey uses the Executive Opinion Survey (EOS) carried out by the World Economic Forum’s (WEF) partner institutes between February and May 2006.
It surveyed 11,232 representatives from the private sector in 125 countries, whose combined Gross Domestic Product represents 98 per cent of the world total. Scores for each country reflect both the responsibility of the authorities and of the companies. mainly multinationals, from those countries.
The results draw from responses of more than 11 0O0 business people in 125 countries polled in the World Economic Forum’s Executive Opinion Survey 2006.


India ranked worst in bribery survey

Dawn (October 5 , 2006). paper cutting

BRUSSELS, Oct 4: Anti-corruption advocates on Wednesday ranked India as the most corrupt country in the Bribe Payers Index (BPI) of the year 2006.
The Transparency International in its report called on the governments of India, China and Russia to do more to stop their multinational companies from bribing when doing business abroad.

A survey of 30 of the world’s leading exporting countries ranked the three countries at the bottom, with India the worst offender. Switzerland topped the ranking of the Bribe Payers Index 2006.

Officials from the anti-corruption group Transparency International urged the governments of the three fast emerging economies to take a more active role in cleaning up the business practices of their companies.

“Our advice to these countries is to give themselves the legislation that would allow them to prosecute their own state-owned enterprises or their own companies,” said Transparency’s Chair Huguette Labelle.

“But also that we work with these enterprises and companies to help them to ensure that they do not bribe, to help them develop their own codes of conduct, their own practices and ways of doing business that excludes bribing.” Behind Switzerland, the survey ranked Sweden, Australia, Austria and Canada as the most effective in preventing their companies from bribing. Even countries like the United States, which ranked 9th, came in for some criticism.

“Since the US was one of the first countries to really have legislation to prosecute their own companies if they were bribing abroad, we look to the US in this respect to be a leading country,” Labelle said. “And hope that the next time they might be at the top of the list.” The Transparency ranked countries according to their effectiveness in preventing their companies from bribing when they do business abroad. Its Bribe Payers Index 2006 limited itself to the world’s 30 largest exporting countries.

On a scale from 10 for no corruption, down to 1 for rampant corruption, the highest score went to Switzerland with 7.81, with the lowest score going to India at 4.62.

The survey’s results found companies bribing more often in developing countries, where the means to combat corruption are weak.

“Bribing companies are actively undermining the best efforts of governments in developing nations to improve governance, and thereby driving the vicious cycle of poverty,” Labelle said.

The results were based on interviews with more than 11,000 business people in 125 countries.—Agencies


TI ranks India as most corrupt country

Business Recorder (October 5 , 2006).

KARACHI (October 05 2006): Overseas bribery by companies from the world's export giants is still common, and according to Transparency International 2006 Bribery Payers Index (BPI) survey, India has ranked the most corrupt country in the world.

Amongst 30 nations, India is ranked as the most corrupt in the BPI 2006. In the Corruption Perceptions Index (CPI) 2005 in which 159 countries were included, amongst the same 30 countries, India ranked second most corrupt country at 92, Russia being the most corrupt at 125.

The BPI is a ranking of 30 leading exporting countries according to the propensity of their firms to bribe abroad. This survey looks at the use of bribes by companies with headquarters in 30 of the world's leading exporting countries (either in global or regional terms).

Companies from emerging export powers India, China and Russia rank among the worst. In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend abroad.

The countries included are the leading international or regional exporting countries, whose combined global exports represented 82 percent of the world total in 2005.

The BPI survey uses the Executive Opinion Survey (EOS) 1 carried out by the World Economic Forum's (WEF) partner institutes between February and May 2006. It surveyed 11,232 representatives from the private sector in 125 countries, whose combined gross domestic product represent 98 percent of the world total.

RECOMMENDATIONS

-- The OECD countries must step up enforcement of the OECD Anti-Bribery Convention's prohibition on foreign bribery and commit the necessary resources to monitor one another's enforcement.

-- China, India and Russia should voluntarily adopt the provisions of the OECD Anti-Bribery Convention.

-- Multilateral development banks must debar companies found guilty of foreign bribery.

-- Companies must conduct due diligence when engaging in partnerships or acquisitions, and adopt and enforce strict internal no-bribes policies that include their agents, subsidiaries and branches.

-- Developing countries should vigorously prosecute foreign companies found to have bribed on their soil, and must be supported in these prosecutions by the legal and financial co-operation of the host countries.


India tops Bribe Payers' Index

The Nation (October 5 , 2006)

BRUSSELS (AFP) - India and China are the two countries most likely to pay bribes in order to win business contracts abroad, a leading anti-corruption group said here on Wednesday.
India finished top of the Bribe Payers’ Index 2006 compiled by Transparency International on the basis of responses from more than 11,000 business people in 125 countries to a World Economic Forum survey.
China, the world’s fourth largest exporter, was second worst of the 30 leading exporting countries which were ranked according to the propensity of their firms to bribe abroad.
Transparency said the results showed that in emerging export powers such as India and China “efforts to strengthen domestic anti-corruption activities have failed to extend abroad”.
It accused China among others of undermining efforts to reduce poverty in Africa, where it is an increasingly powerful economic player.
“Foreign companies that commit the crime of bribery are undercutting Africa’s anti-poverty efforts,” said Transparency’s Regional Director for Africa, Casey Kelso.
“African countries should prosecute them vigorously. Regional development institutions such as the African Development Bank can help by enforcing debarment programmes that block crooked companies from profiting from development dollars while the poor are left out of the picture.”
Transparency’s Chair Huguette Labelle called on China, India and Russia — which was ranked third worst in the index — to sign up to the Organisation for Economic Cooperation and Development (OECD) Convention against Bribery.
“With growing influence comes a greater responsibility that should constitute an opportunity for good,” Labelle said.
Turkey, which is struggling to meet the criteria for European Union membership, also came in for heavy criticism from Transparency after placing 27th, just behind India, China and Russia.
The country thought least likely to offer backhanders abroad was Switzerland, followed by Sweden, Australia, Austria, Canada and Britain. The United States was in ninth place, tied with Belgium.
The 30 countries listed accounted for 82 percent of global exports in 2005.
On November 6, Transparency International will release its annual Corruption Perceptions Index, which ranks over 150 countries on the basis of perceived levels of domestic corruption.

   
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