According to a section of the Press, the 60 billion rupee Prime Minister's Housing Programme is in danger of being awarded to a UK based company, Imperial Houses (Pvt) Limited (IHL) with, surprisingly no web presence though there is web presence of Imperial Leather.
Allegations of 'undue haste', considered to be synonymous with bypassing normal process in the award of contracts in this country have, reportedly, been acknowledged by the Housing Secretary and Managing Director of Pakistan Housing Authority (PHA). The MD has stated that he was given to understand that the Law Ministry had taken care of everything and added that "it has the potential to become a financial scam and create huge embarrassment for the government."
In defence of the project, the Housing Minister, Rahmatullah Kakar, accused the Housing Secretary and PHA MD of creating hurdles in the implementation of the project which, he averred, was in the interest of the people of this country as it envisages providing low cost housing to the poor.
The sequence of the paper trail is, reportedly, as follows: PHA issued the advertisement and letter of intent for public-private partnership as per Infrastructure Project Development Facility (IPDF); 20 firms applied including IHL which submitted its proposal on 17th October 2008; MoUs were signed with 12 to 13 firms, including IHL which signed the MoU a day later, ie 18th October 2008; subsequently the Housing Ministry requested the Ministry of Finance (MoF) for issuance of sovereign guarantee to IHL and sent the draft agreement to the Law Ministry as required; on 31st October, Kakar wrote on the file that the agreement was vetted by the Law Ministry and directed that an agreement be signed with IHL; the PHA MD at this time advised against undue haste and suggested waiting for the completion of the technical and financial analysis for the joint venture and response from the Ministry of Finance. But the story does not end here.
The IPDF has noted major 'defects' in the agreement of which the most unacceptable is zero percent equity of IHL and 100 percent of PHA; in addition, the PHA would be required to provide the entire revenue stream upfront with the additional proviso that it must purchase all units even if they are not sold to shelterless people.
Awarding government contracts is a cumbersome procedure in most countries; however there is a legitimate rationale for this: public money cannot and must not be seen to be used in a manner which is neither fair nor transparent. Unfortunately there are numerous instances in Pakistan's history where government awards (both at federal and provincial levels) have been made without adhering to the principles of fairness or transparency.
What is relevant is that such instances have never remained buried and as and when they have resurfaced they have done incalculable damage to the country's economy as well as to the government. Without going into a blame game and identifying specific projects associated with particular former governments, it is, nonetheless, critical for the government to ensure that it meticulously follows the process in the award of all contracts to effectively forestall such allegations in the future.
This must include audit trails, conflict of interest, if any, must be duly noted by all those involved in awarding the contracts and exemptions may be made only with a written record for reasons behind approving the exemption clearly stated in the file.