$200m World Bank-funded programme: concerns raised over procurement process

ISLAMABAD: Transparency International Pakistan (TIP) has raised questions over transparency and alleged procurement irregularities in the civil works tender of the 215 MW Madyan Hydropower Project, estimated to cost over USD200 million, and funded by the World Bank under the Khyber Pakhtunkhwa Hydropower Renewable Energy Development (KHRED) programme.

In separate letters addressed to Khyber Pakhtunkhwa Chief Minister Sohail Afridi and World Bank Country Director Bolormaa Amgaabazar, TIP shared details of what it termed serious discrepancies in the procurement process.

According to TIP’s letter to the chief minister, the Pakhtunkhwa Energy Development Organisation (PEDO) invited bids for the civil works package of the project, which includes construction of major structures such as the weir, intake, headrace tunnel, surge shaft, tailrace, underground powerhouse, access roads, residential colony and hydraulic steel structures.

The TIP alleged that the prequalification and bid evaluation processes were conducted in violation of the World Bank’s Procurement Regulations for IPF Borrowers, particularly with respect to eligibility criteria, financial capacity and disclosure requirements.

The AGE ?n?aat ve Ticaret A.?.–Ghulam Rasool & Company (Pvt) Ltd Joint Venture (AGE-GR JV), which was prequalified and allowed to submit bids, allegedly concealed material information regarding AGE ?n?aat’s financial condition. TIP claimed that AGE ?n?aat filed for concordatum (court-supervised insolvency protection) in Turkiye on May 25, 2023, but failed to disclose this in its prequalification submission dated July 2023.

According to TIP, such non-disclosure violates mandatory requirements of the prequalification document. Under Section III (Financial Capabilities), applicants are required to demonstrate adequate cash flow capacity, submit audited financial statements for the past five years and establish long-term financial soundness. TIP contended that the AGE-GR JV did not meet these requirements, as AGE ?n?aat was insolvent and under judicial protection during both the prequalification and bid stages.

The complainant further alleged that the deliberate concealment of AGE ?n?aat’s insolvency constitutes a “fraudulent practice” under Clause 2.2(a)(ii) of the World Bank’s Anti-Corruption Guidelines.

The TIP maintained that despite multiple complaints submitted earlier to both PEDO and the World Bank, PEDO has continued with the evaluation of the AGE-GR JV without first determining the alleged fraud and eligibility issues, potentially jeopardising the integrity of the procurement process.

It further pointed out that due to PEDO’s prolonged evaluation and inaction on eligibility concerns, bidders were repeatedly required to extend bid validity, exposing compliant bidders to commercial risk and uncertainty.

Transparency International Pakistan said it had reviewed the allegations and that, prima facie, they appeared to be correct. TIP noted that under the World Bank’s Anti-Corruption Guidelines, failure to disclose material information constitutes a fraudulent practice and warrants immediate investigation and corrective action.

TIP also recalled that it had submitted a complaint in September 2025 regarding irregularities in a related procurement package of the Madyan Hydropower Project.

In its letter, TIP requested the chief minister to look into the allegations and, if found correct, direct PEDO to take action in accordance with applicable procurement rules.

When contacted, Secretary Energy Khyber Pakhtunkhwa said the report had been shared with the World Bank’s Project Management Office (PMO) for comments. He maintained that every step of the procurement process is strictly monitored by the World Bank and that no procurement can proceed without the World Bank’s no-objection letter (NOL).

Copyright Business Recorder, 2025