Pocketing billions with the help of fake committees

These bodies are constituted to clear funds for procurements

ISLAMABAD: A number of federal and provincial departments have set up fake committees for clearing funds for the purchase of machinery and equipment from local and foreign companies.

These committees give green signal for the purchase of products that cost the national exchequer heavily as prices and the procedure for making the purchases help the officials involved pocket hefty amounts in kickbacks at the cost of taxpayers.



The procurement is initiated not in response to demand from the lower tiers of government organisations, but is the result of hobnobbing by supervisory officials with the supplier of machinery and equipment. Over Rs500 billion per annum goes down the drain in such procurements, which are categorised as:

Violation of rules laid down by the Public Procurement Regulatory Authority (PPRA); expanding the scope of purchase beyond the demand coming from field organisations like agriculture, education, health, minerals, oil and gas, etc; and purchasing the goods that are in line with the brand and specification of the companies whose agents in Pakistan pay the highest amount in kickbacks.

Geological Survey of Pakistan Director General Dr Imran has floated a tender, published in the national print media, inviting bids by January 11, 2016 for the supply of core-drilling rigs (hydraulic system) truck-mounted 8x8, 250 horsepower.

The article writer called Imran to know how he issued such an objectionable tender for the procurement of rigs which does not specify the following:

Why demand a truck for which fuel is not available in Pakistan?; why details of the truck, accessories, etc are specified to suit a particular supplier?; and why design the procurement tender in a manner that the foreign supplier will be paid the price after arrival of the equipment and that too in local currency?



These questions were asked after a survey of the market helped to conclude that foreign suppliers were always paid in foreign currency and the procurement was made through a letter of credit which demanded payment in advance.

Secondly, the supplier is asked to offer machinery and equipment in accordance with the specification of buyers and not according to the specified items the supplier can offer. Such process is meant to ensure transparency and cost management in order to save the funds allocated for procurement.

Unsatisfactory reply

Imran, instead of answering the questions, said a committee of a department of the Ministry of Petroleum and Natural Resources had cleared the tender and its specifications.

When asked whether the committee worked in compliance with the PPRA rules and whether clearance of the PPRA was sought before inviting the bids, he said such questions could be answered only by the director procurement, who was on leave and would return only after the tender process was over – meaning after the January 11 deadline for the submission of bids.

When relevant businessmen were approached for comments, they said the entire tender was illegal and had been called only to help local agents of foreign companies to pay kickbacks.



According to them, no European and US company offers kickbacks on supplies and the tender has been designed to ensure that the local agent is able to bypass the rules applied to the suppliers. Only Chinese companies indulged in offering kickbacks without restriction and penalties, they said.

The writer has worked with major newspapers and specialises in the analysis of public finance and geo-economics of terrorism

Published in The Express Tribune, January 11^th, 2016.

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