6 bn Gadani project begins by violating PPRA Rules, SC rulings

ISLAMABAD: In violation of the PPRA Rules and ignoring the principles of transparency and merit, the government of Nawaz Sharif has decided to appoint Nespak as consultant in the $6 billion Gadani Power Project, which may ultimately produce 6,000MW electricity from imported coal. To give it a legal cover, six federal secretaries in their role as PPRA Board members recently met to get this project exempted from the PPRA Rules and allowed the Ministry of Water and Power to engage Nespak without getting into an open tendering process. The MD PPRA had opposed this move but the board still decided to go for this exemption. This has been done despite the Supreme Court’s past decision of nullifying such contracts, which too were awarded through similar exemptions and in violation of the PPRA Rules. It is interesting to note that the PPRA Board comprises six federal secretaries and three independent members but to get this controversial exemption through in spite of the legal requirements, the three independent private members have not been appointed. According to the minutes of the last PPRA Board meeting held on September 16: “The board resolved to recommend to the federal government to grant exemption under Section 21 of the PPRA Ordinance, 2002 for hiring services of M/s Nespak by PPPMLC, the subsidiary of the Ministry of Water and Power.” This exemption has been approved by federal secretaries-dominated PPRA Board despite the opposition of the PPRA chief.The PPRA MD, in the agenda of the meeting, had made it clear that if the matter was urgent, then rule 42(d)(iii) of Public Procurement Rules, 2004 may be invoked which reads as under: “For reasons of extreme urgency brought about by events unforeseeable by the procuring agency, the time limits laid down for open and limited bidding methods cannot be met. The circumstances invoked to justify extreme urgency must not be attributable to the procuring agency: Provided that any procuring agency desirous of using negotiated tendering as a method of procurement shall record its reasons and justifications in writing for resorting to negotiated tendering and shall place the same on record.” The MD had contended that if Nespak was ideally suited for the subject consultancy and it had the requisite expertise and resources, then Rule 42(c)(ii) may be invoked which reads as: “Only one manufacturer or supplier exists for the required procurement: Provided that the procuring agencies shall specify the appropriate fora, which may authorise procurement of proprietary object after due diligence.” The MD PPRA also wrote: “With reference to grant of exemption under Section 21 of the PPRA Ordinance, it is submitted that Rule 4 of the Public Procurement Rules, 2004 has still to be complied by the procuring agency if exemption to it is granted.” In the absence of competitive bidding, it will be extremely difficult for the procuring agency to establish compliance with the above rules. The MD had advised the board to consider advising the procuring agency to follow the PPRA Rules in this matter. However, despite warnings and recommendations of the MD PPRA, the secretaries decided in favour of the exemption from the open bidding process.Apparently, to pre-empt the possible intervention of the Supreme Court in this matter, the board discussed the aspect of court cases. The minutes of the board meeting say, “A view was expressed that some court decisions have not approved of the single procurement instances. The members were of the view that in none of those cases, the court had adversely adjudged a case that was processed under the provision of Section 21 of the ordinance.” Transparency International Pakistan (TIP) adviser Adil Gilani, when contacted, said the Supreme Court in 2012 had cancelled the $126 million Safe City Project despite the approval of exemption by the then cabinet and the prime minister. The SC had declared the exemption as illegal in constitutional petition No.91 of 2011, Gilani recalled.