150 engines Railway deal may be declared improper: Transparency International

Pakistan Railway's bid to purchase 150 locomotives, in violation of Public Procurement Rules (PPR) 2004, may be declared mis-procurement. Transparency International Pakistan in a letter sent to the Secretary/Chairman, Railways, on May 12, has expressed concern over the violation of rules in the procurement of locomotives which may result in a loss of Rs 40 billion to the exchequer.
Syed Adil Gilani, Chairman, Transparency International Pakistan, has sought clarification from the Secretary regarding the deal. Pakistan Railways are bound to conduct all procurements in accordance with PPR 2004 and any violation of rules amounts to declaring the process as misappropriation. Following allegations need to be clarified, he said.
-- Only US-made locomotives are specified in the tender. This is not allowed under Rule No 10 which states: "specifications shall allow widest possible competition and shall not favour any single contractor or supplier nor put others at a disadvantage. Specifications shall be generic and shall not include references to brand names, model numbers, catalogue numbers or similar classifications."
-- Tender notice was published only in one newspaper. This is against Rule No 12 (2) which states: "all procurement opportunities over two million rupees should be advertised on the Authority's website as well as other print media or newspapers having wide circulation."
-- The advertisement in newspapers shall principally appear in at least two national dailies, one in English and the other in Urdu.
-- Cost of tender documents was Rs 500,000. This is against Rule No 23 (5) which states: "the procuring agency shall provide a set of bidding documents to any supplier or contractor, on request and subject to payment of price, if any. Explanation - for the purpose of this sub-rule price means the cost of printing and providing the documents only."
-- PC-1 was not prepared or approved. This is a violation of Rule No 11 which states: "approval mechanism - all procuring agencies shall provide clear authorisation and delegation of powers for different categories of procurement and shall only initiate procurements once approval of competent authorities concerned has been approved."
-- According to Rule No 50 any unauthorised breach of these rules shall amount to misappropriation. PPR 2004 are mandatory on Pakistan Railways, Gilani said.
-- In case, Chairman, TIP said, reports about the deal are proved to be true, then under PPRA Rule 2(f), it would be a collusive practice designed to establish bid prices at artificial, non-competitive levels and to deprive procuring agencies of the benefits of free and open competition, and Rule No 7 "Integrity Pact" and as a result the contractor may have to pay 10 times the loss to Government of Pakistan.
Rule 2(f) states: "corrupt and fraudulent practices includes 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 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."