Kickbacks? HIT chairperson says APCs available locally at third of cost

39 vehicles were procured by Sindh govt for Rs170m each in 2013, causing a loss of Rs4.7b

ISLAMABAD:

A decision by the Sindh government to procure armoured personnel carriers (APCs) from a foreign firm has allegedly caused a loss of Rs4.7 billion as a domestic manufacturer revealed that the same vehicle was available for a price three times cheaper.

A parliamentary panel — the National Assembly Standing Committee on Defence Production — was informed on Wednesday that the provincial government had decided to procure 39 APCs from Serbia for Rs170 million each instead of locally-produced vehicles at Rs50 million each. The revelation by the Heavy Industries Taxila (HIT) chairperson highlighted allegations of kickbacks in the deal by the Sindh government in 2013.

“The Pakistan Peoples Party and Muttahida Qaumi Movement (MQM) were in power at the time of the purchase and they took kickbacks,” claimed Minister for Defence Production Rana Tanveer Hussain.



Committee chairperson Khawaja Sohail Mansoor of the MQM responded by saying that whoever was involved in the malpractice should be held accountable. The committee was of the opinion that as APCs of similar specifications were manufactured by HIT, there was no justification to import them and first right of refusal should be given to national manufacturers.

HIT chairperson Lt Gen Wajid Hussain told the committee that the HIT had provided B-6 level vehicles to the Sindh government in 2005, as per the requirements of the Sindh police. He added that HIT could, however, now supply B-7 and advanced versions of the APCs. “We can provide vehicles for Rs50 million similar to those ordered for Rs170 million,” he claimed.

The committee observed that the imported vehicles had been exempted from tax while there was no tax exemption for the local defence production industries. It decided to call the Federal Board of Revenue chairperson, chief secretary, home secretary, police IG and Public Procurement Regulatory Authority (PPRA) management to the next committee meeting.

The committee discussed the first right of refusal in detail, unanimously deciding that the Ministry of Defence Production and PPRA managing director would issue a letter to all federal and provincial departments directing them to ensure adherence to  PPRA’s Public Procurement Rule 24. A report on the implementation of this decision is to be submitted to the secretariat within 15 days.

The rule reads: “(1) Procuring agencies shall allow all prospective bidders to participate in procuring procedure without regard to nationality, except in cases in which any procuring agency decides to limit such participation to national bidders only or prohibit participation of bidders of some nationalities, in accordance with the policy of Federal Government. (2) Procuring agencies shall allow for a preference to domestic or national suppliers or contractors in accordance with the policies of the Federal Government.”

Published in The Express Tribune, February 19^th, 2015.