The appointment of Financial Advisors/Consultants for the next round of sell-off of Public Sector Enterprises (PSEs) has raised some eyebrows. The Privatisation Commission (PC) Board has just counter-stamped - in every case - the recommendation it received from the Evaluation Committee. Further, it has been claimed that all the rules and regulations of Public Procurement Regulatory Authority (PPRA) Act have been followed in letter and in spirit. We beg to differ because the sub-criteria marks for technical evaluation having an 80 percent weightage were not pre-announced as required by the law. Placing technical marks as well as giving the PIA advisory to a consortium with the lowest financial bid is not enough. What is also not plausible is uploading the process on the web after the award. Procurement rules strictly require placement on the web of technical marks and invitations to point out any mistake for a reasonable period of time prior to opening of financial bids. Unfortunately, however, this was not done, but having said that, we seek to stress that there are no suspicions of financial hanky-panky. Moreover, we want the process to proceed as fast as possible. Sell-off of state-managed and -owned enterprises (SOEs) is the only tool available to us in our environment that is largely characterized by the curses of nepotism, cronyism, corruption, and political patronage to stop not just the hemorrhaging from the national kitty but also improve the quality and profitability of these enterprises. It would also provide the much-needed funds to retire the government or public debt which in turn would provide the fiscal space for investment in the country's crumbling infrastructure; as well as improving the quality of service as well as expansion of vital social sectors such as health and education. Adhering strictly to PPRA rules sometimes compromises the much-needed efficiency; but these rules lend transparency and integrity to the process and forestall any frivolous litigation. For example, the annulment of Pakistan Steel's privatization by the apex court has landed not only the SOEs but the entire nation itself in the soup. Therefore, our objective is not to be critical but raise the flag to learn from past mistakes. Similarly, the procurement rules require that the marks given by the evaluation committee against the prescribed sub-criteria within the technical group need to be uploaded on the website of PC for a certain number of days. And also for returning unopened financial bids of non-responsive bidders, ie, who have obtained less than the prescribed marks for technical section. Was this done? If not, then, was any waiver under the law sought and received?
Selection of a Financial Advisor is always a judgmental call and, at times, despite the best of intentions, can go terribly wrong. Therefore, it is essential to provide as much clarity as possible to bidders prior to bidding, as required by the law. For instance, it would be highly instructive to analyse the scorecards in relation to credibility and standing of each member of the bidding consortia. Sub-criteria could also be based on separate marks for the team leader and other team members who would be working on the project within the consortia in terms of relevant experience, past success and their commitment to travel to Pakistan to interact with PIA management as well as PC officials.
What weight was accorded to the work plan and the quality of presentation? We are sure the Evaluation Committee led by the PC chairman alongwith two eminent members of the commission plus relevant four officials must have followed a robust and transparent process. However, adherence to law is a must. Therefore, familiarity with relevant laws is a sine quo non for the evaluation committee members. Ignorance of the law is no excuse for breaking it.
Sometimes, law can be an ass. That is why it needs to be suitably amended. After all the PPRA Act is not a divine but a man-made law. It provides for exemptions in certain cases of "emergency". But one must not lose sight of the fact that "emergency" means "natural calamities, disasters, accidents, war and operational emergency which may give rise to abnormal situation requiring prompt and immediate action to limit or avoid damage to person, property or the environment". Perhaps two of the five bidders found non-responsive could not exhibit strong commitment to the privatisation process in terms of persons who would be assigned for the task. This had to be a pre-announced sub-criterion for technical marking according to the PPRA law. Was it done or not?
The government could have written to the Prime Minister to approach the Federal Cabinet for a waiver if PC was faced with any difficulty due to the PPRA Act. The Supreme Court has already ruled that no individual - not even prime minister - on his own can grant a waiver. PC on its own cannot decide not to pre-announce the marks for sub-criteria within the 80/20 rule as required by the law. In government, 'process is more important than financial aspects'. The law disallows negotiations. This is meant to curb corruption. If the law requires adherence to a timeline it is also meant to curb cost overruns. Ministers usually want quick decisions but that is not possible all the time. The law is meant to cut the notorious red tape and make the country an attractive destination for genuine investors only; and not provide a window to spurious investors to take the nation for a ride.
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