Despite directives of the Chairman National Assembly Standing Committee on Petroleum and Natural Resources the bosses of the Sui-Southern Gas Company Limited (SSGC) have awarded two tender worth hundreds of million rupees to favourite firms violating the Public Procurement Regulatory Authority (PPRA) rules.
According to sources, the company recently has opened two tenders for the procurement of "Line Pipe API 5L Grade X70-Pre coated 24" OC X0.469" WT Grade X70 Pre-coated (T/Qty 12,300 Metre) and Line Pipe API 5L Grade X70 - Pre-coated 24" OD X0.344" WT Grade X70 Pre-coated (T/Qty 8,000 Metre)" with the condition that only local manufactures having valid American Petroleum Institute (API) and ISO 9001 certificates would be allowed to participate in the bidding.
Documents Available with Business Recorder revealed that the SSGC management wanted to award these tenders to Crescent Steel and Data Steel, which only produce 20 percent of the required material in Pakistan, while the rest of the coil would be imported. It added that under such situation the condition of local manufactures automatically becomes irrelevant as the required material has to be imported.
The above mentioned companies are working with SSGC for last five years and SSGC management have awarded many contracts without opening tenders, causing loss of billions of rupees to national exchequer.
On August 16 Sardar Talin Hussan Nakai, Chairman National Assembly Standing Committee on Petroleum and Natural Resources directed SSGC management not to move further on the above mentioned tenders and asked Managing Director (MD) SSGC to appear before the committee. According to details the SSGC sent chief manager procurement to appear before the parliamentary panel instead of appearing himself. Ten cases of embezzlement have been registered against the procurement managers by the FIA.
The Chairman Assembly Standing Committee on Petroleum and Natural Resources office wrote to SSGC "Violation of PPRA rules by SSGC for tender No: SSGC/LP/PT/679024' pipeline and tender number SGCFP/390212" pipeline. Enclosed please find a complaint received from Syed Twaha Hussain, which is self explanatory. It is suggested that this should be brought before the meeting of Standing Committee which was held on the 18th August, 2011 and until then the matter may not be expedited".
"The above mentioned tender were advertised in the newspaper and also flashed on official website of Sui Southern Gas Company specifies that only local manufacturers can participate in the bidding. This is against Public Procurement Regulatory Authority (PPRA) Ordinance 2002 clause xxii under which PPRA rules have been framed. The interest of SSGC has been ignored as the rule 2 (c) has not been followed, as SSGC personnel have engineered and framed this tender, particularly for two companies-Data steel and Crescent steel. These SSGC personnel have also done the same thing previously" it added.
M/s Data Steel and Crescent Steel only have (three layer pipe coating) API SPEC QI certificate. It is, thus, obvious that the order will be awarded to these two companies. This clause has deliberately been inducted in this tender. If some other international manufacturer is to participate in this tender, their bid would be rejected on this ground.
Thus, the question as to why this clause has been included in the tender can be arisen. This clearly shows that these two companies alone will profit from this clause in the tender. These two companies constitute a cartel that manipulates the price with the conveyance of SSGC personnel.
Therefore, how can it be stated that only a local manufacturer will be allowed to participate in this bid when a mere 20 percent of the manufacturing will be held in Pakistan and the rest of the material will be imported. This shows clear intension to manipulate the prices. Sources said that the company has to make this tender open for international and local manufacturers and create healthy competition so as to safeguard national interest and remove the ambiguity.
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