TIP reveals loss of Rs. 13.5b in FBR’s contract

Pakistan Observer

Transparency International Pakistan (TIP) has pointed out the violation of PPRA rules by FBR, in tender for IT-based solutions for the electronic monitoring (a track and trace system) for tobacco products, sugar, fertilizers, and cement causing loss of Rs. 13.5 billion in contracts of Rs.39.4 billion.

In a letter written to Chairman FBR Vice chairman TIP said that Transparency International Pakistan in response to its letter on the subject matter dated 8.2.2021, has received a reply from 2nd Secretary Project dated 12 February 2021. FBR in its reply did not respond to the following issues pointed in TI Pakistan letter raised by the complainant, and in the comments of TI Pakistan.

As stated by FBR that the exchequer is losing annually tax of Rs 40 billion, i.e. Rs 280 Billion in last seven years only on Cigarettes, why FBR avoided tendering for the Track & Trace after abandoning the tendering process in 2013 RFP.

The FBR has prima facia violated PPRA Rule No32. Discriminatory and difficult conditions, which do not allow in ascertaining the discriminatory or difficult nature of any condition reference shall be made to the ordinary practices of that trade, manufacturing, construction business or service to which that particular procurement is related.

When in 2013 and 2019 the Evaluation Criteria with consent of all bidders was that after Technical Evaluation, financial bids of only Technically Qualified Forms/JV will be opened, and Contract will be awarded to the lowest responsive Bidder, change made in the Evaluation Criteria, is against the ordinary practices of this trade.

If Consultant does not have any past experience of Tobacco Track and Trace System, how and why this firm was appointed by FBR.

If additional payment of Rs 13.5 Billion is not exchequer loss, but Contractor will be paid by manufacturer, does it not amount to a favour to contractor at the cost of public who will include this Rs 13.5 Billion in product cost, to be paid by public.

The consultant appointment process was rejected by the World Bank. Thereafter, the FBR appointed Consultant allegedly in violation of PPRA Regulations, and did not post the Contract Agreement on PPRA website, till today. But FBR as well as Consultant did not took samples from 8 bidders for physical checking, to determine the awarding of 19 marks, Then how many marks to any bidder could be awarded. It is reported that the successful bidder’s product is used in only one country, and that too is not satisfactory.

Chairman FBR is again requested to look into these the allegations, as non serious attitude of FBR on this Project since 2013 may results in again abandoning of Track & Trace System Project implementation, similar to the precious tender of 2020, in which FBR and Ministry of Law committed violation of PPRA Rules and Contract Award was cancelled under the IHC Orders.

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