Railways Ministry was grilled when it sought an exemption from PPRA rules, 2004 to engage M/s Nespak as consultant through a direct contracting at a recent Public Procurement Regulatory Authority (PPRA) meeting headed by Secretary Finance Dr Waqar Masood. The Ministry of Railways was compelled to withdraw its summary titled "exemption from Public Procurement Rules, 2014" for hiring consultants for carrying out a feasibility study of Main Line (ML-1) of Pakistan Railways.
According to official documents, the agenda item was presented by the representative of Ministry of Railways (Director General Planning) who attended the meeting on behalf of Secretary, Railways, as she was out of the country. The DG explained that in the China-Pak Economic Corridor (CPEC) which was signed on July 5, 2013, one of the priority areas of co-operation was development of rail construction along the corridor. After a detailed inspection and deliberation, the Chinese side and Railways Department identified high priority early harvest projects with the intent to carry out a joint feasibility study by Chinese experts and a Pakistani consultant firm for some projects including rehabilitation and upgradation of existing railway track from Karachi to Peshawar of Mainline (ML-1), construction of new dry port at Havelian and upgradation/rehabilitation of major railway stations throughout the country.
Ministry of Railways proposed to engage M/s Nespak (Pvt) Limited through direct contracting from Pakistani side. The DG also explained that the present government desired to complete the feasibility study by December 2014 and in case Ministry resorted to open competition the deadline could not be met. Secretary Defence Production, Lieutenant General Tanvir Tahir (Retd) observed that the proposal to include Pak Rail Advisory and Consultancy Services (PRACS) in the study would be a conflict of interest. The Secretary Housing & Works and Secretary Communication supported the proposal of the Ministry of Railways.
Secretary Industries and Production, Raja Hasan Abbas was not convinced with the reasons for selecting M/s Nespak on a single source basis and suggested that the Ministry of Railways should go for an open bidding process. Secretary Water and Power, Mrs Nargis Sethi informed the forum that Nespak, a subsidiary of the Ministry, was already overworked. In case the proposed feasibility study was assigned to Nespak, they could not do it without sourcing. She further argued out that the joint co-operation committee meeting, which declared the higher priority early harvest projects was held on February, 19, 2014. Since then the Ministry did not take action for the proposed study which could have been completed by now if action was taken in a timely manner.
Managing Director, PPRA, Nazrat Bashir, also questioned the justifications of single source selection of Nespak ie competence of Nespak in railway sector and secrecy of railway installations. She suggested that the Ministry of Railways should go for an open competition. The Chair observed that the Ministry of Railways did not present its case in the light if China-Pak Economic Corridor and no legal agreement between the two countries on Railways was produced.
The Chairman explained that section 21 of Public Procurement Ordinance, 2002 should only be invoked when there would be no other alternative to the PPRA laws/ rules. In the current situation the Board could not allow the exemption under section 21 of PPRA Ordinance, 2002. However, the Board could allow the Ministry of Railways to withdraw its proposal. After detailed deliberations the Board allowed the Ministry of Railways to withdraw the proposal for exemption under section 21 of PPRA Ordinance, 2002 to engage M/s Nespak through a direct contracting.
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