ISLAMABAD: The Public Procurement Regulatory Authority (PPRA) is to approve SOEs (State Owned Entities) procurement policies tailored to their industry-specific needs while maintaining compliance with CIPS (Chartered Institute of Procurement and Supply) Global Standards and core procurement principles, well-informed sources told Business Recorder.
According to the PPRA, Finance Division has forwarded different independent procurement policies framed by the following State-Owned Entities (SOEs) under Section 17(2) of the State-Owned Enterprises (Governance and Operations) Act, 2023 with the request to furnish views/ comments on the policies:
(i) EXIM Bank;
(ii) State Life Insurance Corporation of Pakistan;
(iii) STEDEC Technology Com-mercialization Corporation, Ministry of Science & Technology ; and
(iv) House Building Finance Company Limited (HBFC).
The PPRA further stated that it has already provided its stance regarding independent procurement policy drafted by EXIM Bank. Given the large number of SOEs it is imperative to issue general policy guidelines regarding the mandate of framing an independent procurement policy under SOEs Act, 2023 to ensure uniformity, transparency, and regulatory coherence.
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Section 17(2) of SOES Act, 2023 is reproduced as under: “State-owned enterprises shall maintain independent procurement policies with the approval of the Federal Government, which comply with the Chartered Institute of Procurement and Supply’s Global Standards of Procurement and Supply and shall only be responsible for compliance of provisions of Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002) to such an extent as may be directed by the Federal Government.”
Public Procurement Regulatory Authority was established under PPRA Ordi-nance, 2002 empowered to improve governance, enhance transparency and strengthen accountability.
The preamble of PPRA Ordinance, 2002 reads as follows: “an Ordinance to provide for the establishment of Public Procurement Regulatory Authority for regulating public procurement of goods, services, works and disposal of public assets in the public sector.”
As per Authority’s understanding Section 17(2) of SOES (Governance and Operations) Act, 2023 explicitly indicates that:
(i) independent procurement policy shall comply with CIPS Global Standards; and
(ii) SOEs have to comply with PPRA Ordinance, 2002, to the extent as may be directed by the Federal Government. Instead, SOEs have imitated public procurement rules, 2004, with desired customization, already in vogue.
The PPRA proposed that SOEs may consider following two proposals while framing their respective procurement policies:
(i) either mirroring existing procurement regulatory framework, SOEs should draft procurement provisions classifying industry-specific requirements different from the Standard procurement framework, ensuring alignment with their operational and regulatory needs (eg, energy, banking, telecom, aviation, etc.). They can have more detailed or specific procedures tailored to their particular needs, but they cannot deviate from the fundamental principles of transparency, competition, and value for money. This approach will enable SOEs to maintain flexibility, efficiency, and regulatory compliance while fostering sector-specific procurement excellence; and
(ii) certain SOEs operate in dual capacity - both as procuring agency and as contractor.
When acting as a procuring agency, SOEs are legally bound to comply with procurement regulatory framework mutatis mutandis. While functioning as a contractor, SOEs have the autonomy to develop their independent procurement policy aligned with CIPS Global Standards, ensuring procurement excellence and ethical practices.
The PPRA has proposed that SOEs should develop procurement policies tailored to their industry- specific needs while maintaining compliance with CIPS Global Standards and core procurement principles.
The matter is being placed before PPRA Board to guide the management, specifically to address following two questions:
(i) a) at what stage procurement policy framed by SOEs may be vetted by PPRA? and
(ii) to what extent PPRA may intervene in the procurement policy to ensure transparency, efficiency and value for money?
Copyright Business Recorder, 2025
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