Transparency wants suo moto on RPPS
The News 31 January, 2010
ISLAMABAD: After not getting any positive response from the Ministry of Water and Power, the Transparency International Pakistan has asked the Supreme Court to take suo moto notice of the Rental Power Plants contracts as according to it these contracts will cause hundreds of billions of rupees loss to the country perpetually and ruin the industry resulting in great loss of jobs.
Syed Adil Gilani, Chairman, TI Pakistan, in his application to the chief justice of Pakistan has referred to the report of the Asian Development Bank on the Rental Power Plants which says that the procurement of 14 RPPs should have been re-tendered.
The application states, "Transparency International Pakistan has been pointing out to the government on various occasions for the last eight months the mega corruption being carried out in the Rental Power Plant projects."
"However, the ADB has also confirmed that the procurement of 14 RPPs should have been re-tendered due to changes in the terms offered to bidders, after the tenders were opened."
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TIP seeks suo motu action by Supreme Court
Business Recorder 31 January, 2010
ISLAMABAD (January 31 2010): Transparency International Pakistan (TIP) has requested the Supreme Court to take suo motu notice of the biggest scam in the country in 'award of rental power plants (RPPs) contracts' with post-bid changes that benefited sponsors.
In a letter to Chief Justice of Pakistan Justice Iftikhar Muhammad Chaudhary, TIP Chairman Syed Adil Gilani said that today the media has published Asian Development Bank's (ADB) report on the RPP project with such captions as 'Post-bid changes benefited sponsors: ADB issues final report on RPPs'. This report is also available on the GoP website.
Transparency International Pakistan has pointed out to the government on various occasions for last 8 months that there is a lack of transparency in the award of rental power plant projects. The ADB report has listed several reasons for suggesting the government discontinues establishing RPPs in their present form.
ADB has also advised that the procurement of 14 RPPs should have been re-tendered due to changes in the terms offered to bidders, after the tenders were opened. This amounts to mis-procurement and violation of Public Procurement Rules 2004, as declared by Transparency International Pakistan in August 2009.
THE ADB REPORT STATES IN CLAUSE D, PROCUREMENT PROCESS, S NO 2: "RFP included 7% down payment along with irrevocable confirmed SBLC guaranteeing the payment by the buyers. Substitution of confirmed SBLC with government guarantee and increase in down payment changes the financial, equity and project risk profile in favour of the seller. Changes in down payment post receipt of bids is the major change in the financial terms and contractor to good practice and there should have been re-tendering on the changed conditions."
Supreme Court in the case of Pakistan Steel (PS) privatisation, in its judgement announced on 9 August 2006, dealt with similar case, adjudicated the following: However, the process of privatisation of Pakistan Steel Mills Corporation stands vitiated by acts of omission and commission on the part of certain State functionaries reflecting violation of mandatory provisions of law and the rules framed thereunder which adversely affected the decisions qua pre-qualification of a member of the successful consortium (Mr Arif Habib), valuation of the project and the final terms offered to the successful consortium which were not in accord with the initial public offering given through advertisement.
For the foregoing reasons, the Letter of Acceptance (LoA) dated 31st March, 2006 and Share Purchase Agreement dated 24th April, 2006 are declared as void and of no legal effect." TIP is of the view that acts of omission and commission in the award of RPPs are in clear violation under the PPRA Ordinance 2002 of the Public Procurement Rules 2004, and should therefore be considered as corruption and fraud practices. The bidder should be fined 10 times the loss to GoP due to corruption under Rule No 7 of the Integrity Pact, and cases should be initiated under NAO 1999, against the public office holders involved in these contracts.
"Your honour, TIP on January 20, 2010 requested the Minister for Water and Power to take strict action against PPIB, Pepco and RPPs owners who collectively violated public procurement rules, but no response has been received from the Minister," Gilani said in the letter. According to TIP, if these projects are allowed to be implemented, they will cause loss of hundreds of billions of rupees to the country in perpetuity and ruin industry resulting in massive loss of jobs.
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CJ urged to take note of corruption in RPP contracts
Dawn 31 January, 2010
ISLAMABAD: The Transparency International Pakistan has requested Chief Justice Iftikhar Mohammad Chaudhry to take suo motu notice of alleged corruption in the award of rental power plant (RPP) contracts.
In an application to the chief justice, the TIP said it had been pointing out to the government for the past eight months about corruption in high places with regard to the RPP project.
TIP chairman Syed Adil Gilani pointed out that the Asian Development Bank in its final report on RPPs had cited a number of reasons for not continuing with the project in its present form.
He said the ADB had suggested that procurement of 14 rental power plants should have been re-tendered because of changes in the terms offered to bidders after opening of the tenders.
"This amounted to mis-procurement because of violation of the Public Procurement Rules of 2004 as declared by the Transparency International in August last year."
Referring to the Supreme Court verdict on the Pakistan Steel Mills case, Adil Gilani said the acts of government officials were in clear violation under the PPRA Ordinance 2002 of the Public Procurement Rules and, therefore, should be considered as corruption and fraud practices.
He said the TIP had on Jan 20 requested the water and power minister to take action against the PPIB, Pepco and owners of rental power plants for violating public procurement rules, but there was no response was received from him.
"The bidder should be fined 10 times the loss suffered by the government of Pakistan because of corruption and cases should be initiated under the National Accountability Ordinance of 1999 against public office-holders in the contracts."
The TIP urged Water and Power Minister Raja Pervaiz Ashraf to review the award of RPP projects which, according to it, were not complying with the PPRAs Public Procurement Rules 2004, and provide evaluation reports and award contract agreement to the TIP under PPRA rules.
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Violation of Public Procurement Rules TIP asks minister to take action against PPIB, Pepco, RPP owners
Business Recorder 26 January, 2010
ISLAMABAD: Transparency International Pakistan (TIP) has demanded of the Minister for Water and Power Pervaiz Ashraf to take strict action against PPIB, Pepco and rental power plants (RPPs) owners who collectively violated public procurement rules.
In a letter to the Minister, TIP has contended that it had requested on July 24, 2009 for a review of the awards of RPPs, which according to the international body, did not comply with the PPRA procurement rules 2004, and to provide the evaluation reports and awarded contract agreements to TIP under Rule No 48.
The Public Procurement Regulatory Authority (PPRA) also asked Secretary Wapda in a letter on July30, 2009, to provide the information under Section 5.2(I) of PPRA Ordinance 2002.
According to the letter, a copy of which is available with Business Recorder, no response to the Transparency International Pakistan (TIP) request was received from Wapda or PPIB or Pepco. The clarifications of Iqbal Z Ahmed on the award of RPP were, however, received, which were countered by TIP and were reported in press in August 2009.
On September 10, 2009 Business Recorder reported that the Economic Coordination Committee (ECC) of the Cabinet's decisions of February 15, 2008, on RPPs had not been implemented in letter and spirit. The Asian Development Bank (ADB), under the third-party validation mechanism, began evaluating rental plant contracts reportedly aimed at investigating allegations of kickbacks.
Official documents available with Business Recorder show that the ECC in its meeting on February 15, 2008 had directed the Ministry of Water and Power to negotiate tariff for RPPs lower than allowed to the independent power producers (IPPs), based on similar technology, for their first 10 years.
This direction has not been followed by the tariff negotiators i.e. the Private Power and Infrastructure Board (PPIB) and Pakistan Electric Power Company (Pepco) as, according to Minister for Water and Power Pervaiz Ashraf average RPP tariff would be 13.5 cents per kwh--one cent per kwh higher than IPPs.
The documents further show that the ECC had also directed that Secretaries of Finance and Water and Power along with Managing Director of Public Procurement Regulatory Authority (PPRA) should review the mechanism of procurement to ensure that further delay is avoided and PPRA Rules are strictly observed in letter and spirit. These instructions of the ECC were also violated by the Ministry of Water and Power which forced Public Procurement Regulatory Authority (PPRA) to seek details of the contract agreement signed between the GoP and RPP sponsors.
As a result of public criticism and also TI Pakistan monitoring, the GoP assigned Asian Development Bank (ADB) as third-party validator of the RPP.
The ADB's much awaited report has been on-sent to the Ministry of Finance. However, details of the report have not yet been made public. According to sources, the report indicates violation of PPRA Rules as noted by Transparency International Pakistan. According to the Public Procurement Rules 2004 every contract of over Rs 10 million must include no bribery 'Integrity Pact'. This pact makes it mandatory for the contractor to commit that in case any corruption is found in the award of contract or in future implementation of contract, the contractor will pay 10 times the amount of corruption. The actual commitment is as follows:
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 times 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 inducting the procurement of any contract, right, interest, privilege or other obligation or benefit in whatsoever form from GoP.
Citing this the TIP notes that "TIP requests the Minister to take action under Public Procurement Regulatory Authority (PPRA) Rule No.2(f), 'corrupt and fraudulent practices' and recover 10 times the loss of GoP, (which is estimated to be in billions of rupees) under Rules No.7 'Integrity Pact', from the contractors found to be involved in the violation of Public procurement rules 2004.
Maymar Towers: KBCA not abiding by rules
Business Recorder 26 January, 2010
KARACHI (January 26 2010): The Karachi Building Control Authority (KBCA) has neither abided by the requirements of Karachi Building and Town Planning Regulations 2002 nor served notice on Pakistan Housing Authority (PHA)-Maymar JV Company (Pvt) Ltd for the sale of their project, PHA_Maymar Towers.
Further, it has also not followed court orders to post all details including those of NOC, as prayed in the court by Transparency International Pakistan (TIP). These facts have been highlighted by TIP in its letter written to the Chief Controller, KBCA, on January 20.
Syed Adil Gilani, Chairman, TIP, referring to public notices given by PHA-Maymar JV Company (Pvt) Ltd, has inquired from the Chief Controller whether KBCA had warned the Company for violating the KBCA's building byelaws 2002 by charging higher cancellation charges from public than was mandatory allowed under the byelaws and NOC issued by KBCA.
The builder, in cases of cancellation of booking either by builder or buyer, is allowed to impose penalty of 4 percent on the instalments paid by the allottee. The Company, however, is signing contracts with the allottees with penalty of cancellation @ 10 percent on the cost of the apartment.
The Sindh High Court, comprising Chief Justice Sarmad Jalal Usmani and Justice Sajjad Ali Shah, on the constitutional petition filed by TIP against the KBCA and the Sindh Government, in September 2009, had directed the KBCA to post all relevant information on construction projects and builders on its website within a week for public knowledge and monitoring.
Ecnec shelves energy saving bulbs project
The News 22 January, 2010
ISLAMABAD: The Executive Committee of the National Economic Council (Ecnec) has disapproved the controversial Rs 7 billion project to procure 30 million CFLs (compact florescent lamps) to save 1,131 MW of electricity.
The Ecnec met here on Thursday under the chairmanship of Federal Minister for Finance Shaukat Tarin at the Prime Minister’s Secretariat. The meeting also took the landmark decision of extending the Fata Secretariat financial autonomy up to Rs 1 billion to expedite the development projects in the tribal areas.
According to one of the participants of the meeting, the minister for environment came down heavily on the proposed energy saving project, saying the CFLs, apart from not being environment-friendly, were also injurious to health.
The official said that some participants also questioned the price of the CFL bulb mentioned in the document, which is higher than the price of the product available in the open market. Deputy Chairman Planning Commission Dr Ishfaq Ahmed, however, said that the project was not approved because of some objections, but it would be approved later.
A spokesman of the Ministry of Water and Power said that the reported cost per lamp of $1.97 is incorrect. The PC-I Document of the project contains only an estimated indicative cost of lamps delivered at distribution companies’ designated stores. It includes lamp cost of only $1.37, whereas the rest includes duties & taxes, cost of containers, transportation, warranty requirements and other miscellaneous charges. It is not the actual cost per lamp.
The spokesman, however, admitted that objection was raised in the Ecnec meeting as to why the government has decided to sell the CFL bulbs whereas originally the authorities concerned had decided to distribute the said energy saver free of cost in exchange of 40-100 Watt incandescent bulb.
The press release issued after the Encec meeting says that 28 projects in various sectors of the national economy have been approved.The projects which were accorded approval in energy sector include i) Augmentation of existing 500 and 220 KV G/stations of NTDC system; ii) Upgrading of Transmission Lines & Grid System Network of HESCO; iii) Nuclear Fuel Enrichment Plant (NFEP) Project. Under the physical planning and housing sector, the Ecnec gave approval to six projects that include reconstruction of district complexes at Rawalakot and Bagh, Azad Kashmir.
Chairman TIP meets managing director PIA
Business Recorder 13 January, 2010
KARACHI (January 13 2010): Syed Adil Gilani, Chairman Transparency International Pakistan (TIP) called on the MD-PIA Captain Aijaz Haroon at his office to discuss ways and means for bringing transparency and accountability in the airline's procurement policy so that allegations by the vested interest to discredit the national flag carrier may be contested in true national sprit.
Captain Aijaz Haroon, Managing Director, Pakistan International Airlines invited Syed Adil Gilani, Chairman, Transparency International Pakistan (T.I) to be an observer on the process of awarding major procurement contract by the Corporation, PIA spokesman said here on Tuesday. MD-PIA informed the Chairman T I that all the purchases in PIA are carried out with strict compliance of Public Procurement Regulatory Authority (PPRA). Tender notices are published in print media and also displayed on the PIA and PPRA web-sites.
The contract goes to the lowest bidder and as per PPRA rules no negotiations are done with the parties. To further strengthen accountability and transparency within PIA; Aijaz Haroon volunteered 'Third Party Observers' for overseeing the awarding of major contract by PIA through a senior team of T.I. Syed Adil Gilani, Chairman T I accepted the responsibility.
From henceforth the process of awarding procurement contract by the PIA would be under study by the Transparency International Pakistan to remove doubts, if any, in public mind and invite support from the civil society for the growth and progress of the national airline.-PR
Violation of PPR 2004: NICL terminates contract pact
Business Recorder 14 January, 2010
KARACHI (January 14 2010): National Insurance Company Limited (NICL) has terminated its contract agreement with Roma Business Machines for Heating, Ventilation & Air-conditioning (HAVC) works. This has been done following the issue raised by Transparency International Pakistan (TIP) that NICL was violating Public Procurement Rules (PPR) 2004 in inviting tenders for procurements which, besides the above, relate to purchase of offices spaces in Dubai and plots in Lahore in 2009.
TIP objections were also sent to NICL by Public Procurement Regulatory Authority (PPRA) for clarification. According to TIP, award of HVAC contract to Roma Business Consultants, reported at Rs 120 million higher costs, was against consultant's recommendations and also not to a licensed contractor.
NICL A comprehensive report and comments were sent by NICL to TIP on January 8 to mitigate the objections raised on its procurements as under:
-- While rule 13 of the PPR -2004 stipulates minimum response time for national competitive bidding as 15 days, this provision is however not absolute as the proviso thereto unambiguously provides for the non application of the same in case of emergency. By reason of unstable real estate market and idle funds languishing with the procuring agency, it was considered appropriate to invoke the emergency provision provided for in rule 13 itself and reduce the minimum response time. However, as soon as the procuring agency received TIP's letter of December 14, 2009, wherein its concerns were conveyed qua the reduced response time, the procuring agency, while living up to its responsibility as a fair and transparent company, immediately issued corrigendum in newspapers wherein the invitation for bidding was published.
-- In compliance with PPR, tender documents including inter alia, detailed evaluation criteria , bid award method, signing of integrity pact, rights of bidders for complain on evaluation report prior to award, declaration of evaluation report before the award of contract etc were made available. The prospective bidders were duly notified qua availability of the said tender documents at the office of procuring agency. Since unambiguous and transparent evaluation criteria had already been enunciated, which would be used as the yardstick to assess the bids, no issue of infringement of any provision of PPR arises.
As far as the issue of compliance with rule 11 of PPR is concerned, NICL averred that pursuant to the articles of memorandum of association of the procuring agency, its board of directors is fully competent to approve procurements. Authorisation for all procurements made or contemplated to be made by the procuring agency has been obtained and duly approved. NICL suggested that it would appreciate if instead of making bald allegations and vague generalised statements, specific instance of violation of PPR Ordinance or the Rules framed thereunder are pointed out in future so that an adequate reply may be furnished in respect thereof.
TI Pakistan agreed to be observor in Major Procurements of PIA?
Business Recorder 14 January, 2010
KARACHI (January 13 2010): Syed Adil Gilani, Chairman Transparency International Pakistan (TIP) called on the MD-PIA Captain Aijaz Haroon at his office to discuss ways and means for bringing transparency and accountability in the airline's procurement policy so that allegations by the vested interest to discredit the national flag carrier may be contested in true national sprit.
Captain Aijaz Haroon, Managing Director, Pakistan International Airlines invited Syed Adil Gilani, Chairman, Transparency International Pakistan (T.I) to be an observer on the process of awarding major procurement contract by the Corporation, PIA spokesman said here on Tuesday. MD-PIA informed the Chairman T I that all the purchases in PIA are carried out with strict compliance of Public Procurement Regulatory Authority (PPRA). Tender notices are published in print media and also displayed on the PIA and PPRA web-sites.
The contract goes to the lowest bidder and as per PPRA rules no negotiations are done with the parties. To further strengthen accountability and transparency within PIA; Aijaz Haroon volunteered 'Third Party Observers' for overseeing the awarding of major contract by PIA through a senior team of T.I. Syed Adil Gilani, Chairman T I accepted the responsibility.
From henceforth the process of awarding procurement contract by the PIA would be under study by the Transparency International Pakistan to remove doubts, if any, in public mind and invite support from the civil society for the growth and progress of the national airline.-PR
Terminally ill Pak Steel displays might of corruption in Pakistan
The News 12 January, 2010
KARACHI: Corruption has been taken to new heights in Pakistan as Prime Minister Yousuf Raza Gilani’s government has allowed key accused persons in corruption cases worth billions of rupees registered by his own government to continue managing the affairs of the collapsing and bankrupt Pakistan Steel.
The business group accused by the government investigators of causing billions of rupees of losses to the national institution has not been blacklisted or even barred from doing business with Pakistan Steel.
Pakistan Steel, a national institution of critical importance, was making profits just two years ago with Rs 11 billion of deposits in the banks. Today, Pakistan Steel is facing closure under debt of about Rs 30 billion and a severe shortage of raw material that has dropped the production capacity to a dangerously low level.
This may be for the first time in the corruption ridden history of Pakistan that not one person nominated in four separate FIRs registered by the Federal Investigation Agency (FIA) in corruption cases worth billions of rupees has been arrested, while business remains as usual for all those identified as partners and collaborators in an official investigation. The government’s tolerance for corruption looks more bizarre in these specific cases because the Pak Steel corruption investigation by the FIA followed a suo moto notice by the Supreme Court of Pakistan that had taken notice of rampant corruption in the organisation and had ordered the FIA to launch a thorough probe. After several weeks of investigation, the FIA had registered four corruption cases under FIRs 36, 37, 38 and 39 of 2009 on December 23 and had nominated former chairman Pakistan Steel Moeen Aftab Sheikh, current Managing Director Pakistan Steel Rasul Bux Phulpoto, former director Commercial Samin Asghar, four directors of Abbas Steel Group, run by influential dealer Riaz Laljee’s family and Rashid Abro who represented Nobel Resources of Singapore and Pacific Chartering and Trading Company as the main accused persons.
According to these FIRs the top Pakistan Steel brass in collusion with some of the key dealer suppliers of the organisation caused an estimated loss of about Rs 5 billion by manipulating purchase of coal without tender; purchase of metallurgical coke at exorbitant rates; award of freight contract for delivery of raw material from foreign countries at exorbitant rates and manipulation of the prices of billet, the most important Pakistan Steel product.
Shockingly, Rasul Bux Phulpoto, a key accused person in the FIR 39/2009, is still running the affairs of Pakistan Steel as its Managing Director while no restrictions have been placed in Pak Steel business dealings with Riaz Laljeeís Abbas Steel Group, whose three directors figured as accused persons in the same FIR. Similarly, there is still no bar on Pak Steel relationship with Noble Resources and Pacific Chartering and Trading Company whose representative in Pakistan Rashid Abroís name appeared in FIRs 36, 37 and 38.
The FIA investigation also made a stunning revelation that Moeen Aftab Sheikh, the former chairman Pakistan Steel, another principal accused in these four corruption cases, formerly served with the Abbas Steel Group of Riaz Laljee, an important alleged beneficiary of the scam. Informed official sources said it was the involvement of this group in Pakistan Steel cases that had resulted in the surprise transfer of Tariq Khosa as Director General FIA last month.
Mr Khosa, an officer of impeccable integrity, was transferred on a Sunday last month following his reservations on Ministry of Interiorís decision to neutralize the focus of probe by changing the terms of reference of the FIA investigation. It is still not clear what prompted FIAís slackness in making efforts for the arrest of accused persons in Pakistan Steel case. The delay allowed many of the accused persons to comfortably seek bail before arrests from relevant court while a few of the accused persons including an important director of Abbas Steel Group left the country with an unprecedented official protocol at Islamabad airport last month.
TDAP tenders and contract for expositions: TIP smells a rat
Business Recorder 8 January, 2010
KARACHI (January 08 2010): Transparency International Pakistan (TIP) smells a rat in Trade Development Authority of Pakistan's (TDAP's) tenders and award of contracts for EXPO YEOSU 2012, Korea and EXPO 2010 in China.
In response to the letter written by Najeeb Khawar Awan, Joint Secretary, Ministry of Commerce on December 18 to TIP, to provide "substantive evidence" and "concrete information" regarding alleged corruption and violation of Public Procurement Regulatory Authority's rules, Syed Adil Gilani, Chairman, TIP said that its report on corruption in TDAP is based on various violations by the Authority of PPRA rules and non-compliance of the mandatory requirements under the Public Procurement Rules (PPR) 2004.
In his letter sent to Zafar Mahmood, Secretary, Ministry of Commerce on January 6, Gilani wondered "how could TDAP invite tenders like event manager for EXPO YEOSU 2012, Korea without providing details of the terms and conditions, specifications and evaluation criteria to award contracts". TIP had been pointing out the violations by TDAP to all relevant agencies.
Many contracts like EXPO 2010 in China, consultancies in June and September 2009 were awarded in violation of the rules. He has suggested the Secretary to ensure that all departments under his ministry complied with the law of the land, and fully observe compliance of PPR 2004.
World Expo 2012 is scheduled to be held in YEOSU Republic of Korea from May 12 to August 12, 2012. The theme of the Expo is the living Ocean and Coast with four sub-themes ie (a) The preservation of the Oceans, (b) High value added ocean industry, (c) Development of ocean resources and technology, and (d) The ocean cultural activities.
The YEOSU Expo would provide an opportunity to enhance the international community's perception of the function and value of the ocean and coast, share knowledge on the proper use of the ocean and the coast and recognise the need for co-operation in the marine sector.
Regarding YEOSU Expo, TDAP in a letter sent to TIP in November clarified its position as under: TDAP had released an advertisement in national newspaper on November 21 inviting "Expression of Interest" (EoI) from companies willing to organise the event in a befitting manner. It was clearly indicated in the EoI that TDAP will not provide any financial assistance to the selected company.
The expenditure incurred on the Expo will be met by the consultant/event manager from its own resources and no financial liability would accrue to the Government of Pakistan or TDAP. On TIP's observation that TDAP is not providing a set of bidding documents to the applicants under rule 23 of PPR - 2004, it was pointed out that the rule applies only to those cases where procurement is made by the procuring agency.
In this case TDAP is neither making any procurement nor providing any financial assistance to the event organiser/consultant, hence the question of providing a set of bidding documents to the applicants does not arise. In the EoI, TDAP has laid down clear and unambiguous criteria for the selection of a suitable event manager/consultant for Expo YEOSU 2012, Korea, which TDAP will strictly adhere to with a view to ensuring transparency and fair play.
Rejecting TIP's contention that TDAP should re-invite the pre-qualification notice to avoid mis-procurement charge under rule 50, TDAP was of the considered opinion that since no procurement is being made and no financial assistance is being given by TDAP as clearly indicated in the EoI, the question of mis-procurement does not arise.
Disagreeing with TDAP's clarification, TIP said even if procuring agency is not funding the procurement, it is procurement under PPR - 2004. TIP gave the example of Expo 2010, Shanghai, China where the contractor is funding 41 percent of the project cost from the earnings he would make.
If the Expo 2010 - Shanghai, China was more profitable, contractor may not have charged any amount from TDAP, and might have even paid to TDAP. Brushing aside the TDAP explanation, TIP said the understanding of TDAP that PPR - 2004 do not apply to selection of event manager for Expo YEOSU 2012, Korea is, therefore, wrong. Unless it is re-advertised as per rules, "this procurement will amount to mis-procurement under PPR - 50."
How could TDAP process award of a contract without following the rules," it said. TIP further said that TDAP has failed to reply its letter of October 3, 2009 on Expo Shanghai, China which pertained to the allegation that the contractor has claimed additional cost of USD 2.2 million TIP would like to know the status and veracity of this allegation.
TIP has again asked that copies of the evaluation report and contract agreement be supplied to conform that the procurement was made according to PPRA rules. It has also challenged that TDAP clarifications are against the PPR - 2004. The following information is required to avoid mis-procurement charge under rule 50, and further re-invite pre-qualification notices under the prescribed procedure.
The information required relate to: scope of work, number of seminars and workshops, cities of seminars and workshops, time period of contract, and who will bear the cost of travel, lodging and boarding of participants, how many participants are desired per seminar/workshop.
CAA accused of violating procurement rules
Dawn 3 January, 2010
ISLAMABAD, Jan 2: The Public Procurement Regulatory Authority (PPRA) has taken serious note of the alleged violation of procurement rules by the Civil Aviation Authority (CAA) in the purchase of a hydrant refueling system for the new Benazir Bhutto International Airport, Islamabad.
The PPRA, which functions under the Cabinet Division, has sought report from the CAA on the alleged violation of its power vested under relevant sections of PPRA Ordinance 2002.
The report has been sought in the wake of a ‘petition for intercession’ by China National Precision Machinery Import and Export Corporation (CNMPIEC) filed with the secretary defence through Transparency International Pakistan.
The Chinese firm alleged that its bid for the project opened on August 5, 2009, was the lowest - amounting to Rs1,290,509,127 inclusive of duties and taxes - against AlTariq Constructors whose bid offer amounted to Rs1,398,784,629 inclusive of duties and taxes. Thus the Chinese bid was Rs108,275,502 less than its competitor.
The Transparency International in a letter to the chairman of the CAA pointed out that if any violation of the public procurement rules occurs and are proved, the procurement may be declared as ‘mis-procurement’ and may be liable for action under Rule No 2 (f), “corrupt and fraudulent practices”.
Chairman TIP Syed Adil Gilani pointed out to CAA that the authority had to sign the ‘integrity pact’ with the contractor under Rule No 7. Procurements exceeding the prescribed limit shall be subject to an integrity pact as specified by regulations with approval of the federal government, between the procuring agency and the supplier or contractor.
And under the integrity pact, if corruption is deducted at any stage, the contractor is committed to pay ten times the amount of loss to Civil Aviation Authority due to corrupt act besides facing legal action under the law of the land.
In the case of complaints lodged by the Chinese firm, if Rs100 million is proved the amount of recovery from the contractor may be Rs1 billion.
The Chinese firm maintained that it had already successfully completed the hydrant refueling system at Allama Iqbal International Airport, Lahore, saying that its competitor had no expertise of hydrant refueling system.
While rejecting the Chinese firm’s offer, the Civil Aviation Authority advised CNMPIEC in a letter dated December 3, 2009, that it had been declared ‘commercially non-responsive’ as its bid price included the customs duty and taxes.
The Chinese firm explained that it had complied with Civil Aviation Authority’s own instructions to bidder.
The hydrant refueling system is required for airports with high air traffic density and where the demand for fuel is high a refueling system known as the ‘hydrant refueling system’ is used.
The main characteristic of this system is that fuel from the airport depot is supplied, under pressure, directly to the apron through a system of pits connected to a network of lines.
The fuel is then loaded into the aircraft using a servicer fitted with a supply monitoring station.
The major advantages of hydrant refueling system, compared to re-fuelling carried out using re-fuellers, are practically no limits in quantity to be loaded on board aircraft; quicker fuelling procedures; and safer for airports, since there are no re-fuellers circulating with fuel on board.