Rules relaxation for ships purchase opposed

The Maritime Affairs Division has opposed the grant of waiver from public procurement rules to Pakistan National Shipping Corporation (PNSC) for the purchase of two second-hand vessels.

According to sources, the matter was tabled in a recent meeting of the cabinet, where the Maritime Affairs Division gave its point of view, saying that “instant exemption” for second-hand vessels was not required.

It pointed out that PNSC had been purchasing used ships in the past as well without observing Public Procurement Regulatory Authority (PPRA) rules but under a procedure provided by the PPRA.

The prime minister, however, exhorted that in the interest of transparency, PPRA rules should be followed irrespective of whether new or used vessels were being bought.

The premier’s remarks were endorsed by cabinet members, noting that there was a history of “financial impropriety and dubious transactions” while making such purchases.

It was observed that as per Section 21 of the PPRA Ordinance 2002, the authority, while recommending the federal government to grant exemption from the operation of ordinance/ rules/ regulations in a particular case, was bound to give reasons in writing, which had not been done in the current case.

It was suggested that the matter may be referred back to the PPRA board to seek reas+ons for supporting its recommendation.

The Cabinet Division was briefed that PNSC requested the PPRA to exempt it from the applicability of Public Procurement Rules 2004 for the procurement of second-hand vessels, crafts, ships and associated equipment/ machinery through negotiated tendering under Rule 42(d)(1) of the Public Procurement Rules.

The PPRA board, in its 68th meeting held on February 20, 2023, agreed on granting exemption to PNSC.

It decided to recommend to the federal government to give PNSC exemption under Section 21 of the PPRA Ordinance 2002 from the applicability of Public Procurement Rules 2004 for the procurement of two second-hand vessels.

It also decided that PNSC would forward a case through its line ministry for the insertion of a new rule to define the mechanism for the purchase of used vessels in future.

The board pointed out that Section 21 of the PPRA Ordinance 2002 stipulated that “the Authority may, for reasons to be recorded in writing, recommend to the federal government that the procurement of an object or class of objects in the national interest be exempted from the operation of this ordinance or any rule or regulation made thereunder or any other law regulating public procurement and the federal government on such recommendations shall exempt the aforesaid objects or class of objects from the operation of the laws and rules and regulations made thereunder.”

The cabinet considered a summary titled “Grant of exemption from applicability of Public Procurement Rules 2004 for the procurement of second-hand, used vessels by Pakistan National Shipping Corporation (PNSC)”, which was submitted by the Cabinet Division.

It referred the matter back to the PPRA board, seeking reasons for its recommendation in writing, as stipulated in Section 21 of the PPRA Ordinance 2002.

Published in The Express Tribune, May 31^st, 2023.

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