Procurement activity has attained great importance due to manifold increase in public sector spending of these days. With the government waking up to the requirements of the day, its desire to move the engines of growth , create employment and basic infrastruccture, we further see a spurt in procurement under this head.

And all this, once quantified in monetary terms, converts into anything like $500 to $1 billion per annum- indeed a colossal amount for a country like ours. We must also recognize that the spendings of today can, if conducted inappropriately, be a total waste subsequently.

As such the need to tackle the issue in the best of manner and thus, at the least, to ensure that public sector procurement is worth-while and an investment which would be available for tomorrow and even for the future.

All this further gains importance when we see that such activity- specially during the last twenty years or so has been simply below par. As public sector spendings have been very small during the last 15 years (of the last two decades) but for the tele-com sector, there is a dire need to focus this study on such spendings of the last five years. The investments in the shape of technical equipment for the tele-com sector too would be dealt with appropriately.

A little insight reveals that the procurements are of four type viz. raw materials and technical equipment of the low-tech, the medium-tech and the hi-tech varieties. This is inherently different from contracting of civil works, which needs to be studied separately and in its own perspective.

On the other hand, with the relegation of European, the American and the Japanese manufacturers out of tech field, the Pakistani managers of the public sector rightly looked towards the emerging suppliers for their requirements.

However, this, transition- though saving some money, has not been correct as below-mark products have replaced the earlier specified ones. Actually the new players lacked the will to produce standard goods and nor did these manufacturers had an eye on the various standards and specifications being laid out by the West.

It was because of this mindset of the latest players that new protocols like the Washington Accord came about. And it was not just this, but the ISO standardization too which fixed boundaries for the new players and put estoppels on export to the west in the absence of fulfilment of the tenets of the stringent requirements laid down through the ISO standards, which are getting harsher and naturally harder to maintain and fulfil.

All this, however, escaped the attention of our public sector managers who ended up procuring unspecified and below-mark equipment just on the basis of what is known as the lowest bids.

During procurement we also saw inaptness in the processes and sadly a total disregard for the various standards, specifications and even the basic requirements of the projects for which procurement was to be effected.

IPRs (Intellectual Property Rights), now in the limelight and being much strengthened along with the ongoing war on terrorism was another of the issues simply side-tracked.

Here the 1992 Wapda's procurement of the 150 mw FBC coal-fired power plant at Lakra (Sindh) and the tens of exchanges bought by the PTCL during early 1990s is of notoriety.

In Wapda's case all of the $225 million investment has gone down the drain, which additionally has also been the reason for stoppage of any more use of Thar Coal during the last decade up to 2002, where-after the gods have once again embarked to a near collusion course of more losses- that is if the situation is not dealt with correctly.

Similar has been the case with the PTCL exchanges. Had a north European tele-com giant not come to PTCL's rescue and aid the whole edifice/ system would have simply collapsed. Experts have calculated the loss in billions. On the other hand, imagine the situation and the level of profits if the procured equipment, instead of a failure, was of standard quality.

On WAPDA's front the 150mw FBC Power Plant at Lakra which just produces, on the average, a few MW of electricity could have earned ten-fold on its much over- invoiced price label of $225 million and similar would be the position for other items.

Coming to the procurement of the last five years, we see that it again features Wapda, the PTCL and the Pakistan Railways. Such procurement by the PAEC for its Chashma Nuclear Plant cannot be bracketed in this category and nor should it be made a base or cause-celebre for B-grade purchases in other areas of public sector procurement.

Similar contracting by the CAA for the new airports at Karachi and Lahore is also different because aviation industry still remains primarily a European expertise. The NHA with Korean help, again of American descent, was also able to come up with a standard project.

Wapda during this period has ventured deep into procurement from unvouched and unsubstantiated sources in the realms of such intricate departments as the EHV power transformation even. Such procurement in the hydel sector is also suspect as imperative apparatuses are again un-vouched.

Pakistan Railways, on the other hand, after the most damaging drought of at least three decades, was made to jump heedlessly in the fray and was made to invest colossal sums of foreign exchange for track improvement, rolling stocks (inclusive of CBU carriages), and also for the engines (of all types).

These on the face of it also came duly dowryed with transfer of technology. The fact that the beneficiaries of this magnanimous transfer are still none the wiser is besides the point.

The fact that Japan of all the advanced nations had already transferred more modem technology and also setup the re-build and manufacturing lines at Risalpur and Islamabad respectively was probably forgotten by the new managers and their penchant for re-inventing the wheel.

Another offshoot of the situation is the constant neglect of our assets of national importance by the relevant people. And then all this is done through turning the financial spigot off at any time and without any rhyme or reason. Actually it is also due to ad hocism and the side-lining of imperative checks and balances.

Centralized planning may have its negative points and it may not be fashionable these days, but it remains the best option for a country like ours. India too has progressed about on the basis of the same style of planning.

The basic question thus far is as to why the West and Japan makes are better in comparison to the products by our eastern friends. This is the situation where IPR makes a big mark. It is also of note to understand and comprehend the difference between an original manufacturer, a licensee and a pirate.

Experts are of the opinion that there are ten basic attributes which make any establishment an original manufacturer. These are the invention of the core product itself, a history of evolution of the invention from the rudimentary stage to a fully developed one, a string of patents to the credit of the company, a very strong and original R&D setup (different from copying or even reverse engineering) to its credit- this may also have a very viable attachment to the academia, an appropriate manufacturing assembly line, a minimum level of human resource with ability of HRM and HRD, inclusive of in-house training facilities, a sales team able to sell the product, after sales service team, follow up of the field performance of the sold product and lastly for assimilation of such an experience to further improve upon the product- ending up with a new generation after a fixed cycle depending upon the product itself.

An example would be the decade long same design for a fighter plane and new processors for computers every six months. Any establishment, thus, without these ten prerequisites cannot possibly claim to be an original manufacturer.

The second category of manufacturers would be the licensee or some establishment manufacturing a particular product under a license or agreement from the original manufacturer.

And the license or the agreement would place quite a few of the original ten prerequisite/ attributes at the disposal of the licensee. Through this arrangement, the licensee thus becomes an extension of the original manufacturer but with a proviso that the arrangement is for a definite time period and not in perpetuity.

The end user would, however, be wise enough to ensure that the warranties / guarantees of the original manufacturer retain their value even after a particular license expires.

Another issue which keeps on tickling any probing mind in the so-called agreement of transfer of technology. Can the beneficiary of such a transfer be considered as an original manufacturer for the purpose of bidding for a contract?

Here experts are of the opinion that such a company can be considered as an original manufacturer in case at least eight of ten imperatives laid out in preceding paras are available and the company has also had a history of manufacturing in the past- though different items but which should be in the same technological vein. However, it needs to be recognized that such decisions are hard to come by but important in contracting and purchasing, specially by the public sector.

Joint ventures, another of the gimmicks taking place these days, have to be touched with kid gloves. The third of the type of manufacturers are the mavericks or the pirates which copy patented designs through reverse engineering etc. Covert operations special of the military nature or setups thriving on the fruits of industrial espionage are good examples of such efforts.

As primarily covert operations or manufacturers producing military hard ware, have the backing of their respective governments a semblance of quality is somehow maintained.

All this is fastly changing in the post-USSR break-up period with the present uni-polar world striving hard to implement the IPRs. Experts suggest and also foresee a world bereft of piracy soon- at least on the hi-tech level.

The situation for the medium technological level has lot of ground left for the pirates to play and probably they would keep on copying with impunity. Talking about the lowest rung, we see that piracy on the low-tech level is rampant and would continue without any check nearly forever.

Actually this sector is totally unregulated. Looking at this issue geographically we see that the hi-tech frontiers end at the east-west border and are also destined unfortunately to stay that way, the saleable medium technology is available with Russia, Japan, China, South Africa, South American countries like Argentina and Brazil and even with the Asian tigers of the near yester- years.

Capability to manufacture low-tech goods- specially for the public sector, are available nearly everywhere; in-house and internationally. In this category patents, IPRs or specific designs are not the main issue- these being a viable product and able to with-stand the vigorous at the end users.

In addition, these products must also confirm to the standards and specifications formulated by the end users. This may be besides the point that many an important specification has been formulated by interested parties themselves.

Because of this negative trend, there is a special need for the public sector's higher management to ensure that nothing of the sort happens and that the relevant staff knows it's role.

Necessary systems would need to be formulated to confirm quality, present level of testing capabilities would need to be enhanced, more use of international testing facilities would be needed and lastly a new mindset would evolve, whereby public money's true worth would be understood and also redeemed.

It must also be recognized that the relevant people have to be duly trained in contracting and purchase practices, which remains inherently a specialty much different from the normal management sciences. This specific part of the issue would need separate space.

The public sector managers must understand the situation and also be able to exactly gauge their requirements with a vision to see tomorrow in clear and cogent terms.

Never must their visions be blurred and never must they look at short term goals- unlike businesses, the public sector is a trust and the trustees have to stay and operate within very stringent limits.

And they must remember that their doings have far reaching effects and would only be truly comprehended after decades have passed. Just look at the public sector projects launched at the turn of the nineteenth century by the British colonial in India and the dividends we are still reaping in comparison to the remnants of our own follies of just 50 years or so.