Pakistan Steel Mills (PSM) Board of Directors (BoD) is reportedly all set to clear an iron ore commercial import tender for five years with one company on Monday (today), well informed sources told Business Recorder.
Documents, which have been circulated amongst the Board members and a copy of which is available with this scribe, suggest that Board Price Committee (BPC) considered the technical committee's report wherein they considered the offers of M/s Ehya Sephan Mining and Industries Complex Co. Iran and ICOIC Iran and Cargil International Singapore as technically qualified and accepted them for commercial opening whereas offer of M/s CCBMM was rejected on technical grounds.
The committee observed that documentation of the bidders as per tender requirement have not been strictly taken into consideration or their linkage is missing in the files presented before the BPC.
According to the documents, BPC observed that documentation are required to be linked strictly in accordance with the tender terms and conditions or proper justification should be recorded for any relaxation by accepting alternate documents.
The committee accordingly called the representatives of the qualified bidders ie M/s Ehya Sephan Mining & Industries Iran, represented by Shahid Jaffery, M/s Cargil International represented by Nasir Abbasi and Fawad Aftab and M/s ICOIC represented by Nishat Ahmad.
They were apprised that the BPC has recommended that all the documents are required to be linked as per tender terms and conditions and if some are not available in the files, they should be obtained from relevant authorities and presented duly linked before the BPC in its next meeting. The situation of participation in long term contracts favours only one party whereas parties from Iran will not be able to perform as one party from Iran has yet to receive more than Rs 1.5 billion on account of unsettled receipt of iron by PSM in the past. Moreover, no Pakistani bank is willing to open the LC for Iran to import Iron ore due to sanctions.
This leaves only one party for long term 7th generation agreement which is against the spirit of fair trade and competition. The situation also calls for intervention of Competition Commission of Pakistan (CCP) if PSM favours award of 7th generation agreement to one company, said an insider.
TIP in the past had also invited the attention of PSM for fair tuning the conditions of the contract otherwise it apprehends customised structuring of tender documents in favour of a certain company.
A source close to PSM affairs said that the provisional pricing will become basis of favouring single party and for some or other reason one company may supply iron ore from any destination according to its profit making thrust.
BPC in its last meeting had strongly opposed the deal. The committee was under pressure from management to approve the 7th generation agreement but the committee did not succumb to the pressure of management and categorically told the management that circumstances of incomplete documentation and approval appear to be favouring a single party is against fair trade practices.
They also said that in near future Boards and committees are likely to be dissolved and new committees will be formed as per new rules of corporate governance with new TORs. Therefore, the matter should be left for decision to the new committee and new board, the sources maintained.
The Board will also replace two members ie Mirza Islam Baig, Engneer Abdul Jabbar Memon with Ali Raza Ghee Wala and Kalbe Abbas Dharmsey. The name of Dr. Mahreen Razzaq Bhutto, ex-MNA will be deleted from the Board as she has ceased to hold the office after completion of tenure of National Assembly.