Proposed procurement of used vessels by PNSC: Cabinet refers exemption matter back to PPRA board

ISLAMABAD: The Federal Cabinet has referred the proposal to procure second-hand used vessels, crafts, ships, and associated equipment/ machinery by Pakistan National Shipping Corporation (PNSC) after Prime Minister Shehbaz Sharif held that Public Procurement Regulatory Authority (PPRA) rules need to be observed, sources close to Secretary Maritime Affairs (MoMA) told Business Recorder.

The Cabinet Division briefed the Federal Cabinet on May 19, 2023 that PNSC requested PPRA for grant of exemption from applicability of Public Procurement Rules, 2004, for procurement of second-hand used vessels, crafts, ships, and associated equipment/ machinery through negotiated tendering under Rule 42(d)(ii) of public procurement Rules, 2004.

PPRA Board, in its 6th meeting held on February 20, 2023, recommended exemption to the PNSC. The decision of the Board was as under: “The Board decided to recommend to the Federal Government exemption under Section 21 of PPRA Ordinance 2001 from applicability of public procurement Rules, 2001, procurement of two second-hand vessels by PNSC.

PPRA for exempting procurement of two second–hand vessels from rules

The Board further decided that PNSC shall forward a case through its line Ministry for insertion of a new Rule defining mechanism for carrying out procurement of second-hand used vessels in future“.

Section 21 of the PPRA Ordinance, 2002, stipulates: “The Authority may, for reasons to be recorded in writing, recommend to the Federal Government that the procurement of an object or class of objects in the national interest be exempted from the operation of this Ordinance or any rule or regulation made there under or any other law regulating public procurement and the Federal Government on such recommendations shall exempt the aforesaid objects or class of objects from the operation of the laws and rules and regulations made there-under”.

Foregoing in view, the recommendation of PPRA Board for grant of exemption to PNSC from the applicability of Public Procurement Rules, 2004, for procurement of two second-hand vessels under Section 21 of PPRA Ordinance, 2002, were submitted for approval of the Federal Cabinet.

During discussion, the Maritime Affairs Division gave their view that the instant exemption for the second-hand vessels was not required and the PNSC had been purchasing used ships in the past without observing the PPRA Rules but under a procedure provided by PPR Authority.

The Prime Minister; however, exhorted that in the interest of transparency the PPRA Rules would have to be followed irrespective of the fact that new or used vessels were being purchased.

The observation of the Prime Minister was endorsed by the members, highlighting that there was a history of financial impropriety and dubious transactions in such purchases. It was observed that as per Section 21 of the PPRA Ordinance, 2002, the Authority, while recommending the Federal Government to grant exemption from the operation of Ordinance/ rules/ regulations in a particular case, was bound to give reasons in writing, which had not been done in the instant case. It was suggested that the matter may be referred back to the PPRA Board to give the reasons supporting their recommendation.

After detailed discussion the Cabinet referred the matter back to the PPRA Board to give the reasons for their recommendation, in writing, as stipulated in Section 21 of the PPRA Ordinance, 2002.

Copyright Business Recorder, 2023