Rental power procurements: PPIB and Pepco not providing info to Transparerncy Intl

[Naveed Yaseen]

IQBAL MIRZA
KARACHI (September 05 2009): The Private Power Infrastructure Board (PPIB) and Pakistan Electric Power Company (Pepco) are avoiding supply of evaluation report and contract agreements of rental power procurements (RPPs) to Transparency International Pakistan (TIP).

Adil Gilani, Chairman of TIP, in several letters sent to Pakistan Power Resources (PPR) since July 24 had been emphasising that according to the laws of Pakistan, it is mandatory on PPIB and Pepco to provide the information asked for by the TIP.

The failure of the Ministry of Water & Power and the procuring agencies to respond to TIP request is strengthening the doubts about non-compliance of rules, especially the post-tendering terms of fuel supply guarantee by Government of Pakistan (GoP), almost one year's rental being paid in advance and government's obligation in case of its failure to supply gas.

PPR is an Oklahoma-based US company, which is 65 percent owned and controlled by Lahore-based Associated Group. David Walters and his firm Walters Power International (WPI) is a minority partner (35 percent) in PPR.

TIP has made it clear that standard procedures are required to be completed by Wapda, PPIB and Pepco, and also the contractors in processing and award of any contract, and it is also the contractor's responsibility to comply with all procedures. Any violation leading to proof of corruption is to be dealt as per the Integrity Pact (mandatory on PPR also) signed by the contractor.

It was further stated that in case if any violation is detected in future in the award of RPP contract in any one of the 50 requirements of Public Procurement Rules 2004, the contract award may be declared as "mis-procurement". TIP has advised PPR in its own interest to ensure that all rules "have been completed by your firm". TIP aims at building a coherent national integrity system, to institutionalise efforts to curb corruption, and make the country zero tolerant against corruption.

Adil has pointed out in his letter that as there were frequent stories appearing in the newspapers pointing to corruption in tenders of rental power being acquired by the Government of Pakistan under the policy framed by the government to have immediate power to cover up the shortfall, TIP contacted the ministry concerned on July 24, 2009.

It had requested the Minister of Water & Power for the copies of the tender documents containing Terms of Reference (TOR) and GoP terms to confirm that all bidders were provided the information that GoP would make 7 percent to 14 percent advance payments, the evaluation criteria, evaluation report declared and given to bidders 10 days before the award of contract under Rule No 35, copy of the Integrity Pact signed by the bidders and contract agreements, evaluation reports, and compliance of Rule No 35 of PPR 2004.

He has emphasised that transparent competitive bidding process and only competitive bidding process are two different subjects. Under the laws of Pakistan, all bidding process by public sector shall be transparent competitive bidding, which are based on the following principles:

1 Terms of Reference and scope of work shall be clearly defined in the bidding documents, including the specifications, detailed evaluation criteria on which contract is to be awarded (in such cases as RPP, life cycle cost is mandatory as use of gas as fuel and furnace oil will make a huge difference in evaluated cost to the lowest bid).

2 Once the bids have been received and publicly opened, there can be no change in the specifications, nor in the terms of reference like government guarantees, mode of payment, advance payments, time of completion, etc.

3 For competitive bidding, the documents shall include the following: invitation to bid, instructions to bidders; form of bid, form of contract, general or special conditions of contract, specifications and drawings or performance criteria (where applicable); list of goods or bill of quantities (where applicable); delivery time or completion schedule. Qualification criteria (where applicable), bid evaluation criteria, format of all securities required (where applicable), details of standards (if any) that are to be used in assessing the quality of goods, works or services specified; and any other detail not inconsistent with the rules that the procuring agency may deem necessary, and any information that becomes necessary for bidding or for bid evaluation, after the invitation to bid or issue of the bidding documents to the prospective bidders, shall be provided in a timely manner and on equal opportunity basis. Where notification of such change, addition, modification or deletion becomes essential, such notification shall be made in a manner similar to the original advertisement.

Any post-tendering change in these terms renders the contract award as mis-procurement, and comes under the definition of corrupt practices, which are defined as "corrupt and fraudulent practices" and includes offering, giving, receiving, or soliciting any thing of value to influence the action of a public official or the supplier or contractor in the procurement process, in contract execution to the detriment of the procuring agencies; or misrepresentation of facts in order to influence a procurement process or the execution of a contract. Corrupt practices also include collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the procuring agencies of the benefits of free and open competition and any request for, or solicitation of anything of value by any public official in the course of the exercise of his duty. The Chairman of TIP has reiterated that PPR should use its good offices with the Ministry of Water and Power, PPIB and Pepco and provide the required documents.

http://www.brecorder.com/index.php?id=957765