Setback: 3G auction running into snags, yet again

Ever increasing possibility of further delay in bidding.

ISLAMABAD:

There are strong indications that the government may ignore the competitive bidding process as envisaged in the Public Procurement Regulatory Authority (PPRA) rules and appoint consultants directly to oversee the much anticipated 3G auction.

According to informed sources a key party associated with the auction has sent a written proposal to the effect to Prime Minister Yusaf Raza Gilani.

The written proposal was submitted to the premier during a meeting of the Auction Supervisory Committee (ASC), held in the last week of February at the PM House. However, when questioned, all the participants of the meeting including Dr Abdul Hafeez Shaikh who happened to be chairman of the ASC denied the existence of any such proposal.

The ASC nonetheless did not rule out the possibility of invoking the emergency clause of in case of a fear that the government might fall behind in its schedule of auctioning three licenses of 3G spectrums and the Instaphone licence by March 29. The government aims at raising minimum $800 million to fill the gap between its expenditures and income, a gap that has been growing with every passing month.

According to sources, the written proposal says that the Pakistan Telecommunication Authority (PTA) may be authorised to adopt the shortest possible route for appointment of consultants by invoking the emergency clause for enabling direct contracting of the consultant. It further suggested the ASC may conduct interview of the “shortlisted candidates”.

The PTA has already invited expression of interests till March 26 from consultant firms of international repute to oversee the transaction. This has however raised doubts whether the March 29 deadline can be met or not. This also questions the rationale of the move as the PTA has already published the Information Memorandum and fixed the base price for each 3G license at $210 million.

PTA has insisted that the hiring purpose was to determine the “reserve auction price”. However, the PTA alone cannot be blamed for the likely delay in the transaction.

According to a note sent to the premier, before publication of the Information Memorandum, the PTA offered its services to ASC for managing the transaction instead of hiring a consultant.

The note further states that then finance minister (now adviser) Hafeez Shaikh accepted the PTA offer and constituted an Experts Group in his capacity as chairman ASC on January 6. Subsequent to that decision, the PTA launched the Information Memorandum and announced the auction dates.

In a first sign of possible delay of scheduled auction on March 29, the PTA failed to hold a pre-bid conference of investors that had been initially announced for March 2.

Till filing of this story, the chairman PTA Dr Mohammad Yaseen did not respond to written questions regarding the reports that there is a proposal to set aside normal procedures for appointment of consultant and the reasons for cancelling the pre-bid conference.

However, according to PTA’s website, the pre-bid conference was postponed due to “great interest shown by operators through their representatives in World Mobile Congress being held in Barcelona, Spain”. It stated that the conference has been postponed to give more time to the operators to evaluate the emerging situation and allow them more room to plan.

Published in The Express Tribune, March 3^rd, 2012.

Correction: Due a typographical error, the word 'regulatory' was earlier misspelled in the story. The error has been rectified.