Reforms in solar initiatives approved

Cabinet aims to empower public sector entities to conduct procurements

ISLAMABAD:

In response to challenges faced by the centralised competitive bidding process for fast-track Photovoltaic (PV) initiatives, the caretaker government is set to introduce crucial amendments to the Framework Guidelines for Fast-Track Solar PV Initiatives 2022. This initiative aims to empower public sector entities to conduct their own procurements, marking a significant shift in strategy.

The federal cabinet initially approved several interventions under the Framework Guidelines for Fast-Track Solar PV Initiatives 2022 on October 18, 2022, focusing on initiatives like the Solarisation of Public Sector Buildings. Subsequent amendments to the Framework Guidelines were made by the federal cabinet on May 24, 2023, and August 9, 2023.

In a recent meeting, the Ministry of Energy Power Division presented concerns to the cabinet, highlighting Section 2.3.2 of the Framework Guidelines. This section mandates the Alternative Energy Development Board (AEDB, now PPIB post-merger) to prepare standard bidding documents and contract agreements, conducting competitive bidding on behalf of, and in consultation with, public sector entities. Following the selection of successful bidders, the relevant entities issue the Letter of Acceptance and subsequently sign contract agreements.

The Ministry of Power outlined the process, explaining that PPIB, post-merger with the Private Power & Infrastructure Board, followed the Framework Guidelines. It prepared standard Request for Proposal (RFP) documents and contract agreements for the solarisation of public sector buildings. Additionally, it undertook the technical design of net-metering-based solar PV systems for around 250 buildings through NESPAK. The centralised model was executed for an additional 330 on the Lease Purchase Model, with successful bidders declared for 30 buildings to date.

Challenges emerged during the competitive bidding process, with procuring agencies expressing reluctance towards the centralised approach. They sought concurrence from the Public Procurement Regulatory Authority (PPRA), prompting PPIB to seek approval. However, PPRA clarified that its Procurement Regulatory Framework prohibits one procuring agency from conducting procurement on behalf of another, urging entities to follow the Public Procurement Rules, 2004, to avoid legal consequences.

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Moreover, multiple procuring agencies urged PPIB to permit them to independently conduct the competitive bidding process for the solarization of their buildings. Certain agencies also voiced individual concerns after the bidding process, leading to delays in issuing the Letter of Acceptance and subsequently awarding the contract to the successful bidder.

In light of these challenges, the Ministry of Power proposed to the federal cabinet that public sector entities be permitted to independently conduct the competitive bidding process for net-metering-based solar PV systems. The ministry noted that PPIB had already prepared model bidding documents and contract agreements for use by these entities. However, PPIB would offer necessary technical assistance during the competitive bidding process if required.

The cabinet emphasised bringing the matter forward only after the Ministry of Power obtained recommendations from the PPRA board. A thorough discussion on various aspects of the original solarisation scheme, particularly focusing on the availability of idle capacity in the power generation system, was suggested in the Economic Coordination Committee (ECC).

The Ministry of Power sought cabinet approval for the proposal in paragraph 7 of the summary, suggesting a substitution in section 2.3.2 of the Framework Guidelines with the following: “(vi) PPIB will prepare the model bidding documents/contract agreements and support the public sector entities for the procurement of net-metering-based Solar PV systems by the said entities, wherever required.” The cabinet considered the summary titled ‘Amendment in Framework Guidelines for Fast Track Solar PV Initiatives 2022’ dated October 2, 2023, submitted by the Ministry of Power, and approved the proposal, directing a comprehensive analysis of the overall solar policy, including initiatives like the solarisation of tube-wells, to be presented to the cabinet.

Published in The Express Tribune, November 15^th, 2023.

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