Neelum-Jhelum project transmission line: TI Pakistan raises objections over award of unsolicited Rs 25 billion contract

Transparency International Pakistan has raised serious objections over the award of unsolicited Rs 25 billion contract for Neelum-Jhelum power project transmission line, without inviting tenders, to a Chinese firm. In a letter sent to Federal Minister for Water and Power Khawaja Muhammad Asif on March 13, Chairman, TI-Pakistan, Sohail Muzaffar has pointed out that during the hearing of RPP case on November 1, 2011, the Supreme Court had given following remarks on the award of contracts against PPRA rule:
"Any project against the Public Procurement Regulatory Authority (PPRA) rules could not become legal after the cabinet approval, as the cabinet had no authority to approve the contracts against rules and could not bypass the rules. The projects cannot be termed legal if initiated without being advertised, therefore, rental projects can be declared void if proved non-transparent".
The Supreme Court in its judgement announced on March 30, 2013 had declared all the RPP contracts unsolicited, as well as solicited non-transparent, illegal and void ab initio awarded from 2006 to 2010 mainly due to violation of PPRA rules. The relevant para reads as under:
84. III, Thus, in the light of the above facts and circumstances, we hold as under: - The contracts of all the RPPs - solicited and unsolicited, signed off or operational, right from BHIKKI & SHARAQPUR upto PIRANGHAIB, NAUDERO-I & NAUDERO-II were entered into in contravention of law/PPRA Rules, which, besides suffering from other irregularities, violated the principle of transparency and fair and open competition, therefore, the same are declared to be non-transparent, illegal and void ab initio.
Post-bid negotiations with the contractor were held under PPRA Rule 42(d)-III. However, the rule allows negotiations only under "extreme emergency brought about by unforeseen events. No unforeseen events were attributed to talks in this case." A government agreement in conflict with PRRA rules took precedence was not tenable. It was reported that the Ministry of Water and Power had withdrawn the project from National Transmission and Dispatch Company (NTDC) and asked WAPDA to execute the plan because NTDC could not manage to award the contract to the particular firm.
A Senate standing committee has already taken notice of what it called illegal transfer of the project to Wapda. The NTDC faced a hard time justifying accommodating the contractor at an exorbitant rate of Rs 25 billion against the competing bidder's offer of Rs 13 billion. It had to revise upwards the cost of the project by 25 percent within two months to award the contract.
Sohail Muzzafar has pointed out in his letter that "Emergency" under PPRA Rule 2 (g) can not be invoked in circumstances except for natural calamities, disasters, accidents, war and operational emergency (like breakdown in a running plant), which may give rise to abnormal situation requiring prompt and immediate action to limit or avoid damage to person, property or the environment.
He has requested that allegation of violation of PPRA rules relating to the multi-million rupees scam be clarified by the ministry, and tender in accordance with PPR rules be invited, so that this project may not be declared as mis-procurement, which, according to NAB is cognizable offence under NAO 1999.
Transparency International Pakistan was striving for across the board application of Rule of Law, which was the only way to stop corruption, he said. Copies of the letter, along-with attachments have been forwarded for action under the rules and regulations to: Secretary to Prime Minister, Islamabad, Chairman, NAB, Islamabad, Chairman Wapda, Islamabad, Registrar, Supreme Court of Pakistan, Islamabad, and MD, PPRA, Islamabad.