Smart meter procurement under scanner
The Federal Investigation Agency (FIA) has initiated an inquiry into suspected irregularities in the procurement of smart meters by the Lahore Electric Supply Company (LESCO), focusing on the merger of private firms and their continued participation in tenders.
According to documents from the FIA's Anti-Corruption Circle in Lahore, the inquiry has been launched to examine the amalgamation of the companies effective from April 7 last year, as recorded by the Securities and Exchange Commission of Pakistan (SECP).
The probe results from suspicion that the merged entities may have engaged in misrepresentation by continuing business activities, such as prototype submissions, inspections, and certifications, under the dissolved company names after the merger date, potentially violating procurement rules and causing loss to the national exchequer.
The investigation gained public attention following reports of a major contract awarded by LESCO for approximately 300,000 advanced metering infrastructure (AMI) smart meters, valued at around Rs6.5 billion. Sources said the contract was suspected to have been granted while bypassing the Public Procurement Regulatory Authority (PPRA) guidelines, favouring the firm through alleged misuse of authority by LESCO officials.
The FIA has summoned the LESCO general manager (technical) to provide the record and explanations related to the tender process. In letters dated January 2, the FIA sought the detailed record from regulatory bodies.
The agency sought policy guidelines from the Competition Commission of Pakistan (CCP) on mergers in public sector procurement, obligations for disclosure to procuring agencies, and any prior approvals required for merged entities participating in tenders. It also requested certified record of inquiries or actions against the involved companies since April 7, covering issues like abuse of dominant position, deceptive practices, and anti-competitive conduct.
A similar request was sent to the National Grid Company of Pakistan (NGC) chief engineer for standards and specifications for details on prototypes submitted, approved, or under evaluation by the firms post-merger, along with the record of officials involved, noting sheets, and internal correspondence. The FIA emphasised the aim of ascertaining the "factual and legal position" amid allegations of illegal business continuation.
Additionally, a letter to the Power Planning and Monitoring Company (PPMC) chief engineer for material inspection sought the record of inspection calls, inspections conducted, and certificates issued to the companies from April 7, 2025, onward. This includes dates, locations, material inspected, and related distribution company (DISCO) projects, with a focus on any activities conducted under the pre-merger names of the companies. The inquiry is being led by FIA Investigation and Monitoring Deputy Director Muhammad Aman Ullah Khan. Officials from the contacted organisations have been directed to appear with the record at specified times on January 7 and 8, with personnel not below the basic pay scale BPS-18 required for the NGC and PPMC submissions.
Recent media reports had highlighted FIA's demand for LESCO's internal record such as prequalification dossiers, meeting minutes from August, notifications on company eligibility transfers, bidding evaluations, award letters, bank guarantees, and payment details following the merger.