Conspiracy against LNG import project: ECC decides to take action against certain officials

The Economic Co-ordination Committee (ECC) of the Cabinet has decided to take legal action against those officials who allegedly conspired against Liquefied Natural Gas (LNG) import project, revealed official documents made available to Business Recorder.
According to the documents, an inquiry committee has been constituted comprising Minister for Science and Technology (Convenor), Changez Jamali Secretary Finance Division and Secretary, Law & Justice Division to examine the matter for ascertaining the reasons for managing the bidding process in a non-professional manner and fixing the responsibility for taking legal action against the person(s) at fault to avoid recurrence of such lapses in future. The committee will submit its report to the ECC within a fortnight.
On January 29, 2013, the ECC was informed that pursuant to its decision under Case No ECC-122/13/2012 of October 3, 2012, the process of tendering for the fast track (200 MMCFD) and first 400 MMCFD LNG import projects were taken in hand immediately by SSGC. The fast-track project was subsequently put on hold when notice was taken that it would cause confusion in the procurement of long-term LNG.
The sub-committee of ECC constituted for the purpose is supervising the process of tendering. After due tendering process, technical bids for first 400 MMCFD LNG import project were received from the following three firms: (i) consortium led by GEl Pakistan (Global); (ii) consortium led by Pakistan Gasport (Gasport); and (iii) consortium led by Elengy Terminal Pakistan (Engro).
The bids were opened on January 9, 2013 and it was noticed that Global had submitted a bid-bond in Pakistani rupee, which on conversion at the SBP selling rate on the date of opening of the bid gave a lower value than the other bidders and thus was not equivalent to $1 million specified in Request for Proposal (RFP) documents. On the other hand the bid of Gasport was submitted about 19 minutes after the bid closing time of 4.00 pm but before the bid opening time ie 5:00 pm.
The issue was considered by the SSGC's Board of Directors, in its meeting held on January 18, 2013. The board recommended to the sub-committee of the ECC to reject all bids under Rule 33 of the Public Procurement Rules 2004 and also suggested that keeping in view the importance of the project, the sub-committee may consult other relevant/competent authorities in the matter.
The matter was deliberated at length in the meeting of the ECC sub-committee held on January 22, 2013. The sub-committee argued that even though the procedural lapses are there but these are not significant to warrant rejection of bids from the point of view of time and effort that has gone in the procurement process. However, it was imperative that all bidders should be co-operative. In the absence of such behaviour, it will not be imprudent to allow a single bid to be considered.
Consequently, the ECC sub-committee in its meeting of January 22, 2013 made the following alternative recommendation: The deviations, being minor in nature and not materially affecting the bids, may be condoned and subject to agreement by the bidders all the three bids may be considered for evaluation. However, in adopting this option there is a risk of future litigation on account of accepting the non-compliant bids or all the bids received may be rejected in exercise of the powers under Rule 33 of the Public Procurement Rules 2004 as rejection of two non-compliant bids will leave only one bid, which will deprive SSGC to receive competitive bids. In this case, the second round (already tendered) will become the first round and subsequent round (i. e. re-tendering of the subject tender) will become second round.
During the ensuing discussion, the ECC was informed that, in order to avoid the delay in re-tendering and future litigation, the matter was discussed with the CEOs of the bidding firms who initially agreed to cooperate, but later back-tracked. Thus, the only option left is re-tendering. It was also observed that the matter appears to have not been managed professionally, despite the fact that about four years have elapsed since initiation of the process and the acute shortage of gas in the country.
Finance Minister Dr Abdul Hafeez Shaikh showed his annoyance and dismay for not taking the matter seriously by the concerned person(s). The matter, therefore, needs to be thoroughly investigated with a view to taking legal action against the person(s) at fault. After detailed discussion, the ECC rejected all bids and directed the concerned ministry and its attached gas utility to float tenders afresh.