The Planning Commission has unearthed massive financial irregularities in the 'Clean Drinking Water Initiative' (CDWI) launched to provide clean water to the people. Official sources told Business Recorder that the Planning Commission Deputy Chairman Dr Akram Sheikh presented a fact finding report to the caretaker Cabinet on Friday.
It was prepared by Member, Infrastructure, Asad Ali Shah. The Cabinet, however, questioned Planning Commission Deputy Chairman for not fixing responsibility on any of the concerned officials for the mismanagement and delays. The water scheme was basically handled by the Ministry of Environment, Ministry of Science and Technology and Ministry of Industries and Production at different stages.
"The project could not be a success due to a variety of reasons such as defective bidding process, violation of PPRA rules, kick backs by some of the decision makers of the ministry," sources said.
They said that the Ministry of Environment (MoE) prepared PC-1 in October 2003 for CDWI. The Planning Commission noted that the subject related to provincial governments.
MoE justified the amendment project on the basis of catalytic role of the federal government and as pilot approach for demonstration and replication purposes to meet the targets under the Millennium Development Goals (MDGs).
Sources said that MoE had invited technical and financial bids/proposals on April 9, 2005 for the installation of 121 water purification plants, one in each district, and three companies responded. One was rejected during the pre-qualification process and the remaining two firms declared were non-responsive, and their bids were scrapped on June 10, 2005.
Proposals for pre-qualification were again invited on June 13, 2005 and 21 firms expressed interest. Based on Departmental Purchase Committee (DPC), three pre-qualified firms were asked to render their tender documents by July 28, 2007, but only two companies participated in the bidding--'So-Safe' quoted a figure of Rs 268.9 million, and CDWC quoted a price of Rs 282.2 million.
These prices were considered high by the DPC and through a process of revised financial bids; these were reduced by August 15, 2005, without GST.
'So-Safe Water and Technologies' quoted Rs 153,099,998 for 121 plants and Rain Drop, of Lahore, Rs 143,537,500. So- Safe Water Technologies also volunteered to undertake installation at the lowest rates quoted by Rain Drop. This was accepted and it was agreed to divide the work between the two firms. Accordingly, So-Safe Water and Technologies was awarded contract to install 48 water filtration plants at the following costs.
So-Safe Water Technologies quoted bids of Rs 53,469,500 for 48 plants and rain Drop, Lahore, Rs 81,472,000 to install 73 plants.
Following revision of the project scope to 445 water filtration plant (additional 324 plants), one in each Tehsil, pre-qualification exercise was carried out again. Based on the recommendations of DPC, Secretary, MoE, on December 10, 2005 approved pre-qualification of the four additional companies, totalling to 45.
THE COMPANIES WERE: Al-Hasan Technology and Engineering Services (Pvt.) Ltd, PSP Exp, Al-Fajr International (OTV) Habib Rafique Limited, and AG Spiral.
To enhance the number of shortlisted companies, another pre-qualification notice was advertised in the press on December 19, 2005. The process had yet not been completed when tenders were invited for the second phase from the seven pre-qualified firms on February 2, 2006 with financial proposals by February 22, 2006.
The tendering process was stopped to allow the DPC to propose additional shortlisted firms ie Descon Engineering, KK Power and Siemens, according to the fact finding report.
After visiting the facilities of all companies it was decided by the DPC on March 12, 2006 to drop the four pre-qualified companies ie Al-Hasan Technology and Engineering, OTV of Rafique Habib, AG Spiral and CDWC.
According to the report, the decision of the DPC was not endorsed and it was decided by the MoE Secretary to reconstitute the DPC and change the selection criteria. A set of new criteria for the pre-qualification was approved by the Secretary on April 5, 2006 and the DPC was reconstituted.
Thereafter, the record is silent, and recommendations of the new DPC are not available on the file, which means that MoE could not finalise the pre-qualification of the companies for the second tender for the installation of additional 324 plants.
Additional work orders to install 324 plants were issued by the MoE through a large number of variation orders spanning over a period of one year to the same two pre-qualified companies.
Noting on files indicates that a meeting was held in the office of Special Secretary to the Prime Minister on September, 21, 2005 wherein it was decided that 445 plants, as envisaged in the PC-1 may be awarded on the same price as was done in case of 121 plants.
Following complaints of mismanagement, President Musharraf on December 2, 2006 and February 23, 2007, transferred the project to the Ministry of Industries and Production.
The President gave directives to immediately award an interim three months maintenance contract to the existing firms and undertake third-party validation of the project and cap the project at the already installed 409 plants.
It was also decided to revise PC-1 of the project and make three years maintenance of the installed plants under CDWI as part of the revised PC-1.
Sources said that Planning Commission Deputy Chairman informed the Cabinet that the second revised PC-1 of the project at a cost of Rs 955.1 million had been prepared and all problems had been solve in the new project.
Responding to a query regarding inclusion of the treatment of waste water in the project, Planning Commission Deputy Chairman informed the Cabinet that such treatment plants for Peshawar, Karachi and Lahore had been included in the project digest and these plants had even started functioning in Karachi and Lahore and they were being funded 50 percent by the federal and 50 percent by provincial governments.