Issuance of OGDCL exchangeable bonds: PPRA rules violated for appointment of FAC

The Privatisation Commission (PC) has violated Public Procurement Regulatory Authority (PPRA) Rules - 2004 in inviting Expression of Interest for appointment of Financial Advisory Consortium (FAC) for issuance of Oil & Gas Development Company Ltd (OGDCL) exchangeable bonds by monetizing up to 10 percent of Government of Pakistan''''s shareholding (up to 430,000,000 shares) in OGDCL.
The move is in violation of Rule 5 & 6 of PPRA Rules for procurement of consultancy service notified in November 2010. Due to this violation the procurement is deemed to be declared as "mis-procurement" under Rule 50, unless it is re-invited.
Transparency International Pakistan, Chairman, Syed Adil Gilani, in a letter sent on March 22 to the Secretary, Ministry of Privatisation has invited his attention to this violation and pointed out that no evaluation criteria has been published and only 21 days have been allowed for international bidding instead of 30 days.
He has referred to the Supreme Court of Pakistan''''s order of April 28, 2010 in the case of disputed award of multi-billion dollar LNG contract to GDF-Suez, which read as under: "Here we may observe that it is the duty of the court to ensure that the Public Procurement Regulatory Authority Ordinance 2002 read with the Public Procurement Rules - 2004 are adhered strictly to exhibit transparency."
Transparency International Pakistan Chairman has also enclosed PPRA notification of July 7, 2009, which had reminded all procuring agencies to issue a set of pre-qualification documents in case of pre-qualification process under Rule 12 and requested PC to prepare such documents, while re-inviting this expression of interest. Copies of the letter have been sent to: Public Accounts Committee, Chairman, NAB, and Auditor General of Pakistan, Registrar, Supreme Court of Pakistan, and Managing Director, PPRA.
OGDCL is the largest petroleum exploration, production and development company in Pakistan and is listed on all the three stock exchanges in Pakistan as well as on London Stock Exchange. Presently, Government of Pakistan holds 74.82 percent of OGDCL shares and plans to monetize up to 10 percent ODGCL shares by means of an issuance of exchangeable bonds to international institutional investors. To refresh, PPRA had re-produced Rule 16, which provides as under:
- The procuring agency engaging in pre-qualification shall announce, in the pre-qualification documents, all information required for pre-qualification including instructions for preparation and submission of the pre-qualification documents, evaluation criteria, list of documentary evidence required by suppliers or contractors to demonstrate their respective qualifications and any other information that the procuring agency deems necessary for pre-qualification. - The procuring agency shall provide a set of pre-qualification documents to any supplier or contractor, on request and subject to payment, if any.