Delving deep in the tender deals

One such process incurred a loss of Rs450m to the provincial exchequer

ISLAMABAD: Media in Pakistan is getting growingly sensitive to the issue of public money being stolen by the Balochistan bureaucracy via spurious purchases, kickbacks in the award of contracts and acquiring trash technology in the name of ‘advancement’.

This and some other leakages in the budgetary drum make Balochistan the highest guzzler of public money by corrupt means as compared to other provinces — in terms of percentage of the budget.

This angle is to be probed further to establish and to name the top activists of the guzzling mafia manipulating a culture of misspending and theft of the public money.

A fresh deal under which 40 bulldozers were purchased by the Agriculture and Cooperative Department (A&CD) has nudged up the National Accountability Bureau (NAB).

NAB has been active in Balochistan over provincial government’s purchases for a long time. But the latest deal, concluded in December 2014, has proved to be such a blatant attempt that NAB wonders what kind of daredevils reside in the province’s bureaucracy. Through an open tender they invited bids for the provision of 40 bulldozers of the USA, UK, EU and Japan make only. The end purchase was that of bulldozers made in France, with almost all the core and attached parts produced in China.

The actual purchase, however, nullifies the A&CD bigwigs’ claim that these dozers were made in France

NAB Balochistan and the Competition Commission of Pakistan (CCP) remained in direct touch with the process of this procurement.

Their officials are yet to go public with information that these 40 bulldozers were assembled and manufactured in France using parts imported from China and supplied to the French manufacturer by certain Chinese enterprises.

Such manufacturers helped the producer attain at least 45% more in profit embedded in the price of bulldozer. The suppliers and the procurement officials connived to avail the procurement right under the noses of the CCP and NAB officials supervising the process of tendering and bidding.

The provincial government is thus reported to have incurred a loss of about Rs450 million to its exchequer only in this deal.

NAB is on the heels of the relevant officials, one of whom said that the dozers have already been supplied to the user agencies but that there was no word at the A&CD offices of NAB getting active about the purchase of machinery by the department.

The CCP ensured participation of maximum bidders in the procurement of these bulldozers.

The Government of Balochistan allocated Rs3 billion in its budget of 2014-15 for the procurement of 200 bulldozers for agriculture purposes. A&CD, Balochistan floated a tender to procure the first lot of 40 Bulldozers.

The CCP received complaints from suppliers of bulldozers on the terms of the tender. It was complained that five brands of bulldozers were invited in the tender.

However, bids were to be entertained only if the bidders provided details of supply during the last five years proving that their brands were already in business in Pakistan.

CCP learnt that the import data of Customs showed import of only one brand of bulldozers in Pakistan during the last five years, and found out that such deals inevitably created a monopoly of one supplier.

It was also complained that the prerequisite horse-power (HP) range for the procurement of bulldozers was set at 120-125 HP, despite the fact that the majority of the brands mentioned in the tender failed to meet this requirement.

CCP also learnt that the former (now dissolved) provincial Ministry of Food, Agriculture & Livestock had established a horse-power range between 120-130 to ensure better competition and the practice was emulated by the Agriculture Department of Sindh in its latest procurement.

These prerequisites in the tender document appeared to hinder a level-playing field among various suppliers of bulldozers by ostensibly foreclosing the market to most of potential bidders.

The CCP advised A&CD that the inclusion of such prerequisites would restrict competition in the market and that it would heap up heavy costs on the national exchequer.

In response, the AC&D acknowledged the competition concerns and resolved the matter by amending the bidding document, which eventually required supply record during the last 25 years instead of 5 years.

The writer has worked with major newspapers and specialises in analysis of public finance and geo-economics of terrorism

Published in The Express Tribune, August 10^th,  2015.

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