LAHORE: In violation of rules and exceeding its own mandate, the ministry of water and power has ‘decided’ to engage the National Engineering Services Pakistan Pvt Ltd (Nespak) as a project consultant for 3,600MW LNG-based power plants to be set up in Punjab.

Although the ministry denies violating the Public Procurement Regulatory Authority (PPRA) rules or exceeding its mandate by directly hiring a consultant, its letter to Nespak’s managing director shows his organisation has indeed been engaged as the project consultant.

The letter even contains directions with regard to the follow-up measures required. In it the ministry has asked Nespak to “immediately launch field teams and also hire a foreign consultant”, without going through any bidding process.

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According to sources, Nespak has already hired a foreign consultant and is making presentations at the highest provincial and federal levels.

A former general manager of the central contract cell of Wapda, however, differs with the stance taken by the ministry. “It is not only a clear case of violation of PPRA rules but also the ministry’s own rules of business,” he said.

“The ministry is a policy-making body which can write to one of its allied companies, the Genco Holding Company, in this case, conveying to it the federal government’s decision and asking it to prepare the ground work. This is because the Genco Holding Company has technical staff, which the ministry does not.

“The ministry, under no circumstances, can directly hire a consultant, beating the spirit of the PPRA rules that restrict procurement, goods or services, to competitive process. Writing such a letter to a consultant, without hiring it, is an even bigger crime in contractual terms, with huge legal consequences. Funding from the Public Sector Development Programme (PSDP) clearly binds the entire exercise to the PPRA rules, which the federation is violating from the very beginning.”

The ministry’s letter says: “The Cabinet Committee on Energy during its meeting on January 12 has decided to set up 3,600MW LNG-based plants at Bhiki, Baloki and Haveli Bahadurshah (in Punjab) to be implemented by the federal government through the ministry of water and power and its allied organisations. Funding for these projects will be provided through the federal PSDP.

“Your attention is invited to a subsequent meeting held at the ministry of water and power, wherein it was decided that Nespak will be engaged as project consultant for preparation of PC-I and tender documents. It has further been decided that Nespak will take immediate steps to launch field teams for site surveys and engage an international consultant for the preparation of project documents. The GHCL and NTDC will provide necessary technical input for related activities. You are accordingly requested to proceed further for initiating actions as outlined above in order to meet the requisite timelines set by the Cabinet Committee on Energy.”

When it was pointed out that the ministry could not directly hire a consultant without going through the PPRA’s prescribed process of competitive bidding, a spokesman for the ministry denied that a consultant had been hired. “It is not an appointment or contract-awarding letter. No agreement or MoU or any other subsequent documents have been signed. The letter is only a request to Nespak to make necessary arrangements,” he said.

When asked how could the ministry write a letter to one of the consulting firms without going through the competitive process and denying the same privilege to other potential competitors, the spokesman said the ministry had only made a request to one of its subsidiaries. Other companies would not be denied any privilege or opportunity and all PPRA rules would be followed, he added.

Published in Dawn March 3rd , 2015

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