June 23, 2006	Friday	Jumadi-ul-Awwal 26, 1427

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Multan, June 22: Wrangling in the Board of Management of the Multan Industrial Estate has deepened over the issuance of multi-million-rupee contract for development of the second phase (of the estate).

BoM president Tahir Zaidi has opted time-out reportedly after the submission of a no-confidence motion against him by 12 of the 19 board members.

Insiders said that the already souring situation in the BoM had led to what now seemed point of no return between the chairman and a majority of the members over the divergent views on the award of a contract of around Rs 460m for the development of the MIE second phase.

Two firms — M/S Progressive International and M/S Arshad & Co — were short-listed to bid for the second phase’s development contract. Both the firms had offered their services with a very thin price differential — the former firm reportedly tendered a bid of around Rs 470m while the latter submitted a bid of around Rs 480m. The insiders said that the actual cost of the proposed development work should not be more than Rs300m.

Later, the firm M/S Arshad & Co also matched its bid to the contending firm, M/S Progressive International. At this, the issuance of contract hanged in balance and, therefore, in the BoM meeting held on May 24, 2006, an eight-member committee from among the board members was constituted to evaluate the professional standing of the two firms. The PIEDMC chairman, Mohsin Syed, was also present in that meeting of the MIE board.

The criteria laid down to assess their capabilities was to take into consideration their previous experience with the work they were contending to do at the MIE, financial capabilities, commitment to the project, ongoing projects, number of equipment and overall project management capabilities.

The evaluation committee in its report declared Arshad & Co capable to execute the development work on the basis of financial standing, better project management and business volume. According to the committee report, the firm had also committed to install an asphalt plant at the site within a short period of time after issuance of the work order while M/S Progressive International declined to do so even in a year.

The committee report however was signed by its six members while BoM president Tahir Zaidi and Mian Iqbal Hasan were the members who did not sign it. This situation sharpened exiting strife among the BoM members, which ultimately led to the tabling of a no-confidence motion against the BoM president.

Insiders said that objections were also raised at the time of awarding contract for the rehabilitation of the MIE first phase infrastructure because the people at the helms of BoM had given it to an inexperienced firm at inflated rates. The firm later left the project midway and the board had to issue another tender for the remaining work.

The defaulting firm however was not even given the full payment for the work it carried out; it was not also charged the additional cost that had to be incurred on issuing the tender on new rates. Insiders said that the defaulting firm was also issued a cheque of Rs 600,000 without any justification.

Moreover, a plot No 89 of the first phase was sold out at Rs5.2m without getting full payment in cash. Sources said that the buyer had yet to pay Rs2.5m to the industrial estate. The people at the helm of affairs however had not even deposed before the registrar office that full payment had been received but they had issued NOC to the buyer to get a bank loan against the plot.

The BoM for MIE was constituted in October 2003 to what official circles claim kick off a new era of industrialization in Punjab under the stewardship of chief minister Pervaiz Elahi. To achieve the goal, a firm named Punjab Industrial Estates Development and Management Company was formed under the official patronage.

The PIEDMC was awarded one billion rupees as seed money while astonishingly the ownership of state lands in Kot Lakhpat and Sundar Industrial Estates of Lahore and Multan Industrial Estate was transferred to the company free of cost. A 20-member board of directors was also constituted, with only one member from the southern part of Punjab.

The idea behind PIEDMC was to do away with the official bottlenecks in order to gear up industrialisation in the province by empowering the stakeholders to decide on their own all the infrastructural issues at the industrial estates without the involvement of Punjab Industries Department.

Observers said that rampant corruption and malpractice in the official working had no doubt marred the industrialisation process, but the method envisaged alternatively had also given birth to commission and real estate mafias in the private sector. “The phenomenon has divided the stakeholders where there PIEDMC is in charge of the affairs,” they added.

Sources in the BoM said that the PIEDMC authorities in fact called shots in all the MIE affairs and they wanted to award the second phase contract to the firm rejected by the board’s evaluation committee. In a letter (dated: June 17, 2006) to the PIEDMC chairman, BoM president Tahir Zaidi had somehow hinted at this situation as he writes:

“I am firm in my views expressed before you and Mr Mansoor Abbas and earnestly request you to consult all the members of BoM/MIE individually so that I do not have to take the unpleasant responsibility of exposing some bitter facts. It was evident from your conversation that your priority is awarding of contract for phase-II and you are more focused on that as compared to the turmoil in BoM, but my self-respect compels me to stay away from the game for a while... I am taking time off and you may go through the process of awarding phase-II contract in the meantime”.