ISLAMABAD: The World Bank has warned that cancellation of the awarded contracts of 765 kV Double Circuit Dasu Transmission Line by National Transmission and Despatch Company (NTDC) without appropriate justification may be considered a noncompliance of two clauses which may lead to stoppage of financing for these activities in future.
This warning was conveyed by the World Bank Country Director Najy Binhassine in a letter to Finance Minister Dr. Shamshad Akhtar in response to the recommendations of Senate Standing Committee on Power Regarding kV Double Circuit Transmission Line from DASU Hydro Power Plant to Islamabad and Grid Station.
A senate panel headed by Senator Saifullah Abro has accused Mr. Binhassine, Secretary Power, Rashid Langrial and top NTDC brass of conniving with German Consulting Firm M/s GOPA for a consultancy contract.
Binhassine referred to the Office Memorandum (OM) of September 6, 2023 of Power Division shared with the Bank under the signature of Hammad Raza, Deputy Secretary. The OM required the World Bank to clearly indicate that the process was strictly carried out in accordance with the applicable WB Guidelines.
The bank’s immediate comments and response are as follows: The Bank confirms that the contracts for the 765 kV transmission lines have been procured following the World Bank Procurement Regulations, as stipulated in the Legal Agreement signed between World Bank and Government of Pakistan for the $ 700 million IBRD loan is not correct.
Based on the information provided to the World Bank, the latter considers the procurement activities for Lots 1, 2 and 3 in relation to the construction works for the Dasu Transmission Line and the Mansehra Substation were completed in accordance with the requirements of the applicable Procurement Regulations and issued Bank’s no-objections at various stages of the procurement.
Detailed information concerning the Prequalification (PQ) and bid evaluations was shared by NTDC with the World Bank throughout the PQ and bid evaluation stages and formed the basis for the Bank’s no- objections to allow NTDC to proceed with recommended pre-qualifications and awards.
“Complaints received during the process were addressed in accordance with the requirements set out in the applicable World Bank Procurement Regulations. The OM does not provide any new additional information or instruction, consequently there is no justification for cancellation of awarded contracts,” so stated the letter…
According to the Bank clauses 3.25 & 3.26 of the World Bank Procurement Regulations refer to “noncompliance” and indicate the possible actions and remedies that may be taken by the World Bank.
The clauses require that the Bank determines whether the Borrower (Government of Pakistan) has not complied with the procurement requirements (as set out in the Procurement Regulations or Legal Agreement) and consequently a legal remedy may be invoked. “Cancellation of the awarded contracts by NTDC without appropriate justification may be considered such a “noncompliance” referred to in the two clauses,” the Bank added.
The legal remedy in this case may include (i) misprocurement (ii) the consequent cancelation of the allocated funds to these procurement activities and (iii) not financing these activities in future.
Copyright Business Recorder, 2023