Chinese investment: government considering amending PPRA rules, minister denies

The government is considering further amending relevant Public Procurement Regulatory Authority (PPRA) rules to further facilitate $46 billion Chinese investment, an official of PPRA told Business Recorder on condition of anonymity. However, when contacted, Federal Minister for Planning and Development Ahsan Iqbal, said the government is not considering making any amendment in PPRA rules.
Referring to rule (5) dealing with government to government agreements, he said the Authority is not authorised to monitor such contracts and agreements in any case. "Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002), rule 5 states whenever these rules are in conflict with an obligation or commitment of the Federal Government arising out of an international treaty or an agreement with a State or States, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict." Whenever a sponsoring Ministry/Division is of the view that prospective procurement are required to be made by invoking rule-5 of public Procurement Rules, 2004, it shall bring a case to the ECC after undertaking due consultations with the stakeholder Ministries/Divisions/Departments etc as prescribed in the Rules of Business, 1973. The ECC shall consider such case(s) and authorise, or otherwise the sponsoring Ministry/Division whether or not to proceed in terms of rule-5 of the Public Procurement Rules, 2004.
Syed Adil Gilani, Advisor to TIPS, had reportedly written a letter to Dr Abdul Hafeez Shaikh, Minister of Finance in PPP government, on October 25, 2011, mentioning that the impugned amendment by the Board of PPRA in PPRA Rules is ultra vires of the PPRA Ordinance 2004 and is in flagrant violation of the provisions of Section 4 and 21 of the PPRA Ordinance 2004 and that the PPRA Board or the prime minister has no lawful authority to recommend and approve such an amendment which allows award of contract without open competition.
Source said that it was only the Pakistan Muslim League-N government which offered all mega projects to Chinese companies following their demands that all the projects should be offered to them without going for international competition. Sources maintained that it was a long standing demand of the Chinese companies that the existing rules of business in Pakistan should be changed before the announcement of mega investment in different sectors. The government, however, did not amend the PPRA rules but assured the friendly state to provide a full legal umbrella regarding its investment, sources added.
Chairman Board of Investment (BoI) Dr Miftah Ismail reportedly stated that it is also a fact that due to bad law and order situation in Pakistan no other country is ready to invest here. The Chinese investment is in the interest of the country and not for the government, he added. A case like defective locomotives supplied by a Chinese company to Pakistan Railways during the Musharraf period repeatedly came under discussion in parliament.