CDA to spend Rs 5b of taxpayers’ money on controversial LED project

[Salman]

CDA to spend Rs 5b of taxpayers’ money on controversial LED project


ISLAMABAD - The Transparency International Pakistan (TIP) has raised concerns about the No Objection Certificate issued by the National Accountability Bureau (NAB) to the Capital Development Authority (CDA) for initiating a Rs 6.5 billion project.
The TIP says that for the controversial Light Emitting Diode (LED) project, Rs 5 billion of the project’s total cost will be paid by public money.
Referring to the media reports about the NOC granted to the CDA, the TIP has written a letter to the civic body in which it said that the project should cost only Rs 1.35 billion. The extra Rs 5 billion needs to be saved, by implementing the PPRA Ordinance 2002, and Public Procurement Rules 2004, that state other than the Public Procurement Regulatory Authority; no organisation has the mandate to give the CDA an NOC or regulate the application of law relating to the public procurement of goods and services. According to the letter, copy of which is available with Pakistan Today, the project award process has faced many allegations.
The irregularities reported by the media need to be addressed by the CDA, Planning Commission, Asian Development Bank, ECNEC and ECC.
The letter pointed out that the CDA had stated in its 9 January letter to the TIP, the NAB chairman, PAC chairman, PPRA MD, AGP and the Supreme Court of Pakistan, that the project is funded principally by the Asian Development Bank which includes soft terms for repayment.
This includes a carefully restructured repayment plan allowing the CDA to repay the loan from the savings resulting from the lower energy consumption.
However, the Asian Development Bank officially informed the CDA and the Ministry of Water and Power on January 4, 2012, that the bank would not fund the project.
The letter added that the Asian Development Bank had refused to finance the project as the CDA had not completed the bidding in line with the standard bidding process defined by the ADB.
It also stated that the Planning Commission has not approved the PC-I, without which the CDA cannot invite tenders.
“Planning Commission Deputy Chairman Dr Nadeem-ul-Haq confirmed to the TIP that the project’s PCI-I was not approved, as the cost estimated by the CDA was much higher than the market prices,” the letter added.
The letter stated that the market prices for LED lights are Rs 20,000 to 22,000 if procured in bulk which should project the total cost of purchasing 65, 000 at Rs1.36 billion, which is stated to be cost of energy borne by the CDA.
The CDA can replace the lights itself as it has a large maintenance staff and either auction the 65,000 lights, or gift them to other cities.
The letter said the CDA is required to have at least 25 percent of the total project cost as a requirement for initiating the project. However, the CDA does not have the Rs 1.6 billion required.
The Planning Commission has suggested to that a Cash Development Loan be taken from the federal government.
However, that is a post tender condition and is not allowed under the PPRA Ordinance.
The letter added that if the procurement is declared as mis-procurement, the parties involved may be heavily fined.