TI Pakistan seeks clarifications on exemptions of PPRA rules

Transparency International Pakistan has sought clarification from Secretary Finance for alleged violation of Public Procurement Regulatory Rules (PPRA) 2004 in award of projects like 1100 MW Kohala hydropower project and Safe City Islamabad project.
Transparency International Pakistan has refereed to five reports that appeared in the media including Business Recorder regarding exemption under PPRA Rules for award of contracts without inviting public tenders. In a letter to Secretary Finance, Transparency International Pakistan has claimed that it received a complaint that on February 23, 2011, PPRA Board recommended following amendment in application of Rule No 5 for the approval of federal government.
Following is the text of Rule 5: New Recommendation "Whenever a Sponsoring Ministry/Division is of the view that the prospective procurement are required to be made by invoking Rule 5 of Public Procurement Rules 2004, it shall bring a case to the ECC after doing due consultation with stakeholder/ministry/division/department etc as prescribed in the Rules of Business 1973. The ECC shall consider such cases and authorise or otherwise sponsoring ministry/division whether or not to proceed in terms of Rule 5 of Public Procurement Rules 2004".
Public Procurement Rules 2004-Rule 5 international and inter-governmental commitments of the federal government. Whenever these rules are in conflict with an obligation or commitment of the federal government arising out of an international treaty or an agreement with a State or States, or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict.
Transparency International Pakistan argues that according to PPRA Ordinance article 19 all PPRA Board Members (even the private members) are deemed to be public servants as per Section 21 of the Pakistan Penal Code (Act XLV of 1860). Though, PPRA Board is allowed to recommend to the federal government that the procurement of an object or class of objects be exempted from the operation of this Ordinance or any rule or regulation, but under Article 21 of the PPRA Ordinance 2002 this is allowed only if such exemption is in the national interest, said Transparency International Pakistan Chairman Adil Gilani in the letter. Transparency International Pakistan has clarified all the reasons why PPRA was created under the World Bank recommendations given in the CPAR 2000.
J. SUMMARY OF RECOMMENDATIONS Enactment of a modern, transparent and competitive public procurement law based on UNCITRAL Model Law for procurement. Creation of a small, independent procurement regulatory agency, with functions defined by the procurement law (which are mainly confined to policy, documentation, development of rules, etc and not to include line clearance functions for awarding of contracts).
Transparency International Pakistan which was recently targeted by the Executive for its alleged role in downgrading Pakistan's ranking in the Corruption Perception Index has also requested Chairman PPRA to examine news reports and the compliant, and deny or clarify each of these allegations.
According to Transparency International Pakistan, these clarifications are required because if these news reports and allegations are true, the exemptions granted, or the implementation method of application of Rule 5 which may allow contracts awarded at thrice the market cost (as noted in news report on the Safe City Islamabad project), will be against the PPRA Ordinance, UNCAC ratified by Pakistan in August 2007, and against all loan agreements of bilateral treaties by governments and IFIs.
All loans by every lender /donor IFI are always subject to necessary steps to establish appropriate systems of procurement, based on transparency, competition and objective criteria in decision-making, and for such reason, procurement guidelines of either Pakistan (ie Public Procurement Rules 2004), as in some of the World Bank or USAID funded projects for less than a certain value of contracts, otherwise, lenders own procurement guidelines are applicable, which are always based on public tendering.