December 4, 2002	Wednesday	Ramazan 28,1423

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LAHORE, Dec 3: Wapda’s scandalous meter purchases took another turn for the worse when the authority scuttled an international tender to favour a cartel of three local companies and caused power consumers a loss of Rs510 million.

Against all the prudent business practices, the authority split an international tender (No 2728) into individual quotations and placed an order for 600,000 meters with the local companies at a price Rs85 (per meter) higher than the Chinese company selected earlier for the supply.

The purchase orders for 600,000 meters — 5348 and 5349/CE(P&D)/DPE-I/T-2728/2377 — dated 02-11-02 clearly mention qoutation numbers and letter of intent numbers. They also include provision for 100 per cent repeat order, which means that the fate of 1.2 million meters, out of 1.5 million mentioned in the tender, almost stands decided. By doing so, the authority had not only scuttled an international tender against all legal or moral practices but also caused consumers a loss of Rs 510 million; the loss would go up to Rs1,020 million if and when the repeat order is placed.

The authority had already caused itself a loss of Rs1.86 billion during the last three years by purchasing 3.5 million meters from the same cartel through purchases made without tenders and in closed-door negotiations. It had been buying meters at an exorbitant rate of Rs1,050 and 1,125 per meter from these companies.

After the anomaly was pointed out on these pages on March 19, 2002, the authority floated a tender (No2728) on 23-06-02 for the purchase of 1.5 million AC Single Phase meters. Ten bidders participated in the tender that was opened on August 1, 2002.

When asked to comment on the new orders, a Wapda spokesman denied having scuttled the tender. “The negotiations with the Bhuman Associates were very much on and it had been asked to supply samples. Once its supplies them, it could be given the rest of the order.” The spokesman also claimed that these 600,000 meters were meant to meet emergency requirements and the provision of repeat order to meet any contingency. Otherwise, the tender has not been scuttled.

About the price hike, he said the government of Pakistan had ordered the utility to give 15 to 25 per cent price preference to local companies. If base cost is taken as Rs765 — mentioned by the Chinese — and 15 per cent added to it, the total cost comes around Rs885. This way, according to him, the utility had saved Rs138 million.

But an official of Wapda purchase department differs with this official version. According to him, the government policy of “domestic preference” does not, in any way, allow actual price hike of 15 to 25 per cent. How can the government ask any department to pay 25 per cent more to any local supplier? The domestic preference of 15 per cent is only to give theoratical advantage to local companies when making calculations, not actual payment. How the government can tell any utility to pay 15 to 25 per cent extra to any supplier, especially over and above what the supplier is himself asking in the tender. This was a ploy to favour the local cartel and those in charge had done it again — unfortunately, at the cost of helpless consumers, he said.

These companies, which had been supplying the same meters at Rs1,050 and 1,125 per piece, had now agreed to supply the same at Rs850 per meter. It happened only because the tender was floated. When asked why the authority had not blacklisted these companies for fleecing consumers to the tune of Rs1.86 billion, the spokesman said that where would Wapda buy meters from if these companies were blacklisted.

But a former member finance differs with the explanation. According to him, Wapda should have blacklisted these companies for causing consumers such a huge loss. It can buy meters from allover the world, and purchase them at cheap rates as had been proved by the recent international tender. Where would these companies sell their meters if Wapda does not purchase them. This was only an excuse to mint money, not an actual threat, he insisted.

Wapda’s excuse of placing order to meet emergency is even ridiculous, claims a former member of power. The authority should have known how much time an international tender takes to mature and it should have floated the tender earlier. Those in charge must be held guilty of delaying the tender to later find an excuse to oblige those they wanted to oblige at the cost of consumers, he maintained.