Port Qasim Authority (PQA) incurred a loss of over Rs 0.5 billion in tenders awarded in 2009 to National Logistic Cell (NLC) and Frontier Works Organisation (FWO) due to discriminatory specifications of GRP pipes and again in 2012 same discriminatory specifications may cause further loss of Rs 144 million loss to the exchequer.
The issue was discussed with PQA Chairman Vice-Admiral Muhammad Shafi (Retd) by Transparency International Pakistan Advisor Syed Adil Gilani, which was brought to the notice of Transparency International Pakistan by Business and Engineering Trends (BET) in the shape of a complaint.
Adil Gilani told Business Recorder here on Thursday that although the PQA Chairman had promised to look into the complaint, no action had been taken so far to uncover the losses incurred by PQA. In a letter sent to the PQA Chairman on September 4, Adil Gilani has highlighted the following: There are two issues; one was the efforts of PQA to award the contract to NLC and FWO without inviting public tenders, based on the previous contracts, rates and conditions, awarded to NLC and FWO in 2009.
The second issue is the GRP pipes' specifications, which have caused a reported loss of more than Rs 500 million to PQA in previous contracts awarded in 2009 to NLC and FWO. On the first issue, PQA had confirmed to Transparency International Pakistan verbally that it will invite public tenders according to the Public Procurement Rules 2004 from all parties, and not only from those that were pre-qualified in 2007/08, as Rule 15(1) is very specific that pre-qualification may be conducted prior to the floating of tenders.
However, Transparency International Pakistan said it was reported by the complainant that the specifications of pipes, made by PQA and Engineers International Consultants Limited (ECIL), were non-generic. It appears that the officers of PQA and ECIL are responsible for eliminating the local manufacturers of GRP pipes, which are already in use in Pakistan after the approval of ECIL (Malir Development Authority), Nespak, Osmani & Company (DHA), Techno Consultants and NES.
It is also reported that the cost differential in forthcoming two PQA projects between imported and locally manufactured GRP pipes is over Rs 1.44 billion. On the request of PQA, Nespak had earlier submitted a report that the local manufacturer is not complying with the requirements of PQA, as according to the pipe fittings specified by ECIIL and PQA, GRP pipes were required with bell spigots and joints with rubber gasquests, that are not manufactured in Pakistan.
However, Nespak had subsequently informed PQA on May 29, that specifications of PQA / ECIL are non-generic, and should be made generic, so that local manufacturers are also able to supply the GRP pipes. Rule No 10: "Specifications" and Rule No 32: "Discriminatory and Difficult Conditions" have been quoted by Transparency International Pakistan as under for reference of PQA to note that it had committed violations of the Rules in 2009 also.
Rule No 10: Specifications. - Specifications shall allow the 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. However, if the procuring agency is convinced that the use of a reference to a brand name or catalogue number is essential to complete an otherwise incomplete specification, such use or reference shall be qualified with the words "or equivalent".
Rule No 32: Discriminatory and difficult conditions. - Save as otherwise provided, no procuring agency shall introduce any condition, which discriminates between bidders or that is considered to be met with difficulty. 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.
In view of Nespak confirmation of tailor made specifications of PQA in 2009, which has caused a loss of over Rs 500 million to the exchequer, Transparency International Pakistan requested the Chairman that both contracts be declared as mis-procurement under Rule 50, and action may be taken for causing loss to the exchequer of Rs 500 million, against those responsible for the violation of Public Procurement Rules 2004 under Rule 2(f) "corrupt and fraudulent practices".
It may be noted that such act is also a serious offence of corruption under Article 9 (a) (vi) and 9 (a) (vii) of the NAB Ordinance 1999, quoted below:
Article 9: Corruption and corrupt practices: (a) a holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices:
(vi) [if he misuses his authority so as to gain any benefit or favour for himself or any other person, or [renders or attempts to render] [or wilfully fails to exercise his authority to prevent the grant, or rendition of any undue benefit or favour which he could have prevented by exercising his authority].
(vii) if he has issued any directive, policy, or any SRO (Statutory Regulatory Order) or any other order which grants or [attempts to grant] any [undue] concession or benefit in any taxation matter or law or otherwise so as to benefit himself or any relative or associate or a Benamidar 1 [or any other person].
Transparency International Pakistan in its letter had pointed out that the punishment for committing corruption and corrupt practices in the form of rigorous imprisonment is extendable up to 14 years and fine. (Reference - Article10 (a) of the NAB Ordinance 1999.)
Transparency International Pakistan requested the PQA Chairman to cancel the GRP pipes specifications which are non-generic in new tenders and make generic specifications of GRP pipes to allow local manufacturers also to participate, as recommended by Nespak, which will save Rs 1.44 billion to the exchequer.
"Transparency International Pakistan is striving for across the board application of Rule of Law, which is the only way to stop corruption," the letter said. Copies of the letter have been forwarded to Prime Minister of Pakistan; Chairman, Public Accounts Committee, Islamabad; Registrar, Supreme Court of Pakistan, Islamabad; Federal Minister, Ports and Shipping, Islamabad; Chairman, NAB, Islamabad, Auditor General, Islamabad; Federal Secretary, Ministry of Ports and Shipping, Islamabad; and Managing Director, Public Procurement Regulatory Authority (PPRA), Islamabad - with a request to take action under section 5(2) (a) "monitor application of the laws, rules, regulations, policies and procedures in respect of, or relating to, procurement" and under section 5(2) (i) of the PPRA Ordinance 2002.
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