TIP, TCP lock horns over award of urea handling contract

MUSHTAQ GHUMMAN

ISLAMABAD: Transparency International Pakistan (TIP) has locked horns with Trading Corporation of Pakistan (TCP) over the award of a urea handling contract to M/s Fauji Akbar Portia Marine Terminal (Private) Limited (FAP).

Tenders were advertised by TCP on July 30, 2010, and under Rule No. 38 TCP cannot now award a contract to Fauji Akbar Portia Marine Terminals (Private) Limited (FAP), based on an old Tender as the contract was awarded to another bidder as admitted by the TCP.

The TIP argues that the bidder with the lowest evaluated bid, if not in conflict with any other law, rules, regulations or policy of the Federal Government, shall be awarded the procurement contract, within the original or extended period of bid validity.

The TCP has quoted the provision of Article 3.1b of the implementation agreement of FAP with the PQA, read with the provisions of Article 3.26 to mean that no other cargo handling company will be permitted by the PQA to handle such cargo at any other berths of the port, including marginal wharves.

“Such restrictions have been declared as anti-competitive by Competitive Commission of Pakistan (CCP), and quoted below is the CCP order dated 29 June 2011 declaring such provisions to restrict competition within the relevant market as anti-competitive,” TIP added.

Despite General Order issued by CCP and published in the Official Gazette vide SRO 51(I)/2008 of January 15, 2008 (which required all undertakings to seek exemption within 90 days from the date of issuance of General Order), EVTL raised the objection and remained persistent throughout the proceedings that the Act is not applicable on the Concession Agreement as it was executed prior to promulgation of the Act.

However, the PQA filed an application under Section 5 to seek exemption in respect of the concession agreement during the course of hearing. The bench in this order has held that all agreements entered into prior to promulgation of the Act but are continuing and have object or effect to restrict competition within the relevant market, fall within the purview of Section 4 of the Act and are required to seek exemption under Section 5. Therefore, EVTL has been penalized in the sum of Rs.10 million for its failure to seek exemption under Section 5 of the Act.

Moreover, the TCP by its own admission in para 2.v, states that Cargo Safety Services was awarded the contract for the subject tender. It is to be noted that the PQA did not stop Cargo Safety Services from successfully performing the contract and Cargo Safety Services discharged several vessels without any hindrance.

Had it been true that the PQA would not allow handling at the marginal wharves then how were these TCP vessels handled by another cargo handling company on the marginal wharves of PQA, the TIP questioned.

The FAP bid was conditional and hence they cannot be treated as the lowest financial bidder, because of the conditionality their bid stands rejected, according to PPRA rules.

The Sindh High Court issued a stay order because there was a prima facie case of disregard of tendering rules by the TCP.

Cargo Safety Services turned out to be the lowest bidder as FAP’s bid was conditional. In any case, since Cargo Safety Services was awarded the contract by the TCP, the tender stands discharged and a fresh tender notice is now required to award any further contract.

The Sindh High Court has ruled that procurement rules shall strictly be applied in accordance with law. TCP has misused this order to assume that Sindh High Court has awarded the contract to FAP, which clearly is not the case.

Gwadar Port Authority has different jurisdiction than Port Qasim Authority and the contract of Messers PSA Gwadar International Terminals Ltd with GPA is completely different from FAP agreement with the PQA. No parallels can he drawn as in Gwadar the complete Port Operations are being performed by PSA Gwadar and the tariff of PSA Gwadar is protected under PPRA Rule No 42(c) (vi),as the price of services is fixed by PSA Gwadar which is an authority, agency or body duly authorized by the Government. On its behalf and in PQA the port is being operated by PQA itself and not by Fauji Akbar Portia Marine terminal.

The TCP cannot justify the award to FAP on the basis of its misrepresenting contents of the implementation agreement between FAP and the PQA. The TCP is trying to mislead PPRA in this apparent case of mis-procurement.

The enlistment of FAP by TCP board on Feb 17, 2012 against a tender notice issued on 30-7-2010 is a clear case of mis-procurement as due process of inviting tenders under Rule 12 of PPRA rules has not been followed.

The enlistment of FAP is violation of the High Court of Sindh order dated 1-11-2011.

TIP further said that it is wrong for TCP to state that the arrangements in Gwadar Port by GPA are exactly identical to the agreement between FAP and PQA, as in Gwadar the complete Port Operation has been given to PSA Gwadar, and in PQA port is being operated by PQA itself.

 It is also incorrect to state that FAP was the lowest bidders, as no tendering process was conducted for the award of the present contract to FAP, while TCP has used an excuse of a two-year-old bidding in which a contract had already been awarded to a successful bidder. The TCP is said to have recently conducted a fresh tendering to select a company for handling cargo at Karachi. The implementation Agreement of FAP with PQA, in article 1, defines Port Qasim situated in Karachi Sindh, therefore FAP should also have participated in the tender, where the lowest bidder has already been awarded a contract. It is to be noted that TCP issues regular tender notices for import of Urea where it combines the port of discharge to mean Karachi/Qasim, thus the same criteria should have been applied to the cargo handling tender.

A reply to Transparency International Pakistan letter dated 9 February, 2012 given by TCP to PPRA vide letter POD/U.1-8-21/2010 dated 16 March, 2012 has also been received at TIP.

There are discrepancies in the TCP reply, TIP concluded.

An urgent email titled “ PSI inspection of 50,000 tons urea” sent on March 29, 2012 by Muhammad Afzal  to TCP says “sorry for delay in providing information regarding inspection of cargo. Now the cargo is available near Odessa port and ready for inspection. We are thankful to the TCP for cooperation extended by the TCP by giving reasonable time to complete the transaction.”