Pakistan casts serious aspersions on auction process for 3G licence

Transparency International Pakistan has cast serious aspersions on the process of auction adopted by Pakistan Telecommunication Authority (PTA) in the award of contract for 3rd generation (3-G) licence which could otherwise fetch up to $2-3 billion.
In a letter sent to the Principal Secretary to the Prime Minister on March 24, TIP Advisor Syed Adil Gilani has brought to his notice allegation that the government is seeking procurement rules exemption for multi-billion 3-G contract from which Pakistan could fetch $ 2-3 billion from the auction of the license.
He said that Transparency International Pakistan had received a complaint against the PTA which alleged that the whole process of auction of the multi-billion dollar 3rd Generation (3-G) license by PTA was marred with irregularities and oriented in favour. "India is not 70 times bigger than Pakistan in economy or any way, but it got $69 billion that too, two years ago ( 2010), from its auction of only 3-G. Why our Finance Minister has kept budgeted amount of only $ 800 million as expected income from the auction of not only 3G but 4G and 5G as well," he has questioned.
He has referred to a report published on March 23 that the government has requested for procurement rules exemption for multi-billion 3-G contract for appointment of Consultants. At the very infancy stage of auctioning of a license, which has all the potential to obtain the highest price in the history of Pakistan, the Pakistan Telecommunication Authority (PTA) has moved a controversial proposal seeking exemption in Public Procurement Regulatory Authority (PPRA) Rules for hiring an internationally reputed consultancy firm to assist and advise it in carrying the auction.
The issues highlighted by the complainant, he said, fall under Public Procurement Rules 2004, Rule 2 (f), "corrupt and fraudulent practices" 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.
In view of the serious issues pointed out by the complainant which alleges that Pakistan could get US $ 2-3 billion if transparent bidding is allowed, whereas the finance minister has recently declared that the auction prices will fetch only $800 million for the 3G licenses, and now PTA was asking for exemption in the appointment of Consultants who will determine the value and process of the controversial 3G license auction from application of Public Procurement Rules 2004. TI Pakistan has requested the Prime Minister "to stop PTA from violations of Public Procurement Rules 2004 as above allegations are very serious."
Adil Gilani has drawn the attention of the Prime Minister that the Supreme Court of Pakistan on April 28 2010 in Suo motu case No 5 of 2010 for GDF Suez supply of LNG/LPG had stated: "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 to strictly to exhibit transparency. It is universally recognised principle that such type of transactions must be made in transparent manner for the satisfaction of the people, who are the virtual owners of the national exchequer, which is being invested in these projects.
Unless mandatory requirements of the PPRA are enacted by PTA, these procurements are deemed to be mis-procurement in accordance with Rule 50 of the Public Procurement Rules 2004. TI Pakistan is striving for the Rule of Law, he said.
Copies of the letter have been forwarded to Chairman, Public Accounts Committee, Islamabad; Minster of Finance, GoP, Islamabad; Chairman, NAB, Islamabad; Registrar, Supreme Court of Pakistan, Islamabad; Auditor General Pakistan, Islamabad; Managing Director, PPRA, Islamabad, and Dr Mohammed Yaseen, Chairman PTA, Islamabad.