Federal cabinet''s decision to exempt $125 million Safe City Islamabad project from Public Procurement Regulatory Authority (PPRA) Rules 2004 on the insistence of Interior Minister, Rehman Malik is illegal, analysts said. The Supreme Court of Pakistan is already hearing a case with respect to the Safe City Islamabad project for which China is extending concessional loan to Pakistan
According to the PPRA, 2002, Authority (ie Board of PPRA under section 6) has approve and then to recommend for the exemption for procurement of an object, to the federal government under section 21. According to the chapter III- management and administration of the Authority- Section 6 Board (1) General directions and administration of the Authority and its affairs shall vest in a Board which may exercise all powers, perform all functions and do all acts and things which may be exercised, performed or done by the Authority.
Section 21 about Power to exempt reads: "The Authority may, for reasons to be recorded in writing, recommend to the federal government that the procurement of an object or class of objects in the national interest be exempted from the operation of this Ordinance or any rule or regulation made thereunder or any other law regulating public procurement and the federal government on such recommendations shall exempt the aforesaid objects or class of objects from the operation of the laws and rules and regulations."
Analysts argue that Ministry of Interior should have applied for the said exemption giving the grounds to PPRA, and PPRA MD was required to call Board of PPRA meeting to consider the request and take decision and if they were convinced, then they should have recommended to the Federal Government, through its parent Ministry , Cabinet Division.
"Ministry of Finance has no role in recommending any exemption under the PPRA Ordinance 2002, and therefore the exemption recommended by Ministry of Finance is illegal," the analyst added. According to analyst, it is post award exemption, which is also not allowed under PPRA notification of June 2009.
The federal cabinet exempted the project from PPRA Rules even though some cabinet members expressed reservations on the departure from the PPRA Rules and grant of the project to a single party ie M/s Huawei Technology Company Limited without formally advertising the project.
Official documents reveal that Interior Minister, Rehman Malik stated that sensitivities of the project and special relations with China warranted a departure from the PPRA Rules as the Chinese loan facility was linked to the grant of project exclusively to M/s Huawei.