Ensuring transparency: TIP raises concerns over PIA procurement process

TIP observers note PIA has been awarding several contracts to the same suppliers/contractors for 10 to 22 years.

KARACHI:

Transparency International Pakistan sent a letter to Pakistan International Airlines, raising concerns over its procurement process.

According to the text of the letter, a copy of which is available with The Express Tribune, TIP maintained it had been participating in PIA’s tender process as an observer since October 2012 on the airline’s request to to ensure compliance with the Public Procurement Rules 2004.

TIP observers noted that PIA has been awarding several contracts to the same suppliers/contractors for 10 to 22 years. The letter noted for instance that between 2000 and 2004, PIA had been getting its supply of edible oil from Dalda Oil (of Lever Brothers). It added that after Lever Brothers (now Unilever Pakistan) sold Dalda Oil in 2004, PIA switched to Rafhan Oil and had been purchasing it on a single tender basis since then.

According to the letter, TIP advised PIA to invite all edible oil manufacturers to bid on its tender for edible oil. The lowest bidder, Pakistan Oil Mills, quoted a price Rs3.7 million lower than the one quoted by Unilever Pakistan. Despite this, PIA’s food department delayed the awarding of the contract to lowest bidder on one pretext after another. The contract was finally awarded on TIP’s intervention on March 28, 2013, the letter added.

TIP, in its letter, urged the PIA managing director to institute an inquiry into the tenders where millions of rupees in savings were at stake due to hurdles created by old suppliers in collusion with PIA’s user department.

Published in The Express Tribune, April 4^th, 2013.