Pakistan Steel violates PPRA rules

The award of consulting contract to VO Tyazhpromexport of Russia is not only in violation of Public Procurement Rules 2004 but would also lead to awarding of $ 350 million contract to the same company.
Transparency International Pakistan Adviser Adil Gilani in a letter sent to the Chairman of Pakistan Steel Mills Corporation has raised serious objection to the Ministry of Production's request seeking waiver from Public Procurement Regulatory Authority Rules (PPRA Rules) - 2004 to award technical audit contract of Pakistan Steel Mills (PSM) amounting to $0.15 million (Rs 135 million) without withholding tax to Russian state-owned firm VO Tyazprom-export.
The firm is the original designer and manufacturer of Pakistan Steel, which expressed interest in technical audit of the politically controlled financially undisciplined entity.
Background material suggests that the matter of expansion of Pakistan Steel's production capacity came up for discussion during the visit of President of Pakistan to Russia (May 11-13, 2011).
Adil said that TI Pakistan would like to inform the Chairman that such an effort was also made in 2010, and, on TI Pakistan 's objection, the Managing Director of Pakistan Steel had clarified that no such agreement was in process with one single party, and that if and when such scheme would be finalised, it would be processed further.
During the second meeting of the expansion committee, held in Islamabad on May 20, 2010, Pakistan Steel was directed to work out comprehensive requirements, including the financing aspect, for undertaking the expansion plan.
On the advice of the committee to contact renowned steel plant manufacturers for the job, Pakistan Steel said that such manufacturers were being contacted, and preliminary work was being done in order to firm up the requirements. Once approval is accorded by the Government to the firmed up proposal, only then further process would be followed.
According to Adil, another disturbing news was published on October 20, 2011 about the signing of MoU. Under the expansion project, the capacity of Steel Mills will be enhanced to 1.5 million tons annually from existing 1.1 million tons. The initial cost of the project has been estimated at Rs 30.45 billion, while the actual cost will be determined after technical audit of the plant carried out by the Russian firm.
Russia has linked its financing for Pakistan Steel Mills' expansion project with the award of contract to its state-owned firm VO Tyazhpromexport. After Central Development Working Party (CDWP, a body of Planning Commission, gives a go-ahead, the Ministry of Production will seek final approval from the Executive Committee of National Economic Council (Ecnec).
After seeking approval from the apex body, Pakistan and Russia will sign Memorandum of Understanding (MoU) under which Russia will finance $350 million Pakistan Steel Mills' expansion project. The MoU is currently being finalised between the two countries.
Transparency International Pakistan has asked Pakistan Steel to clarify following issues:
How could the company be awarded a consulting contract for making estimates for the expansion of Pakistan Steel Mills, which itself is being considered for award of $ 350 million contract?
Is it not a Conflict of Interests, and collusive practice under Public Procurement Rules 2004, Rule 2(f), which talks about 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.
Who has given the authority to Pakistan Steel to request ECC for granting an exemption from Public Procurement Rules 2004 in presence of PPRA Ordinance 2002?
Why Pakistan Steel assurance given to TI Pakistan to follow the procedures to TI Pakistan is being violated by the management?
TI Pakistan letters, Pakistan Steel letters and news reports attached have been forwarded to the following:
Chairman, Public Accounts Committee, Islamabad, Federal Minister of Finance , Islamabad, Auditor General of Pakistan, Islamabad, Chairman NAB, Islamabad, Secretary Ministry of Production, Islamabad, Registrar, Supreme Court of Pakistan, Islamabad, and Managing Director, PPRA, Islamabad.