ISLAMABAD: The World Bank has announced on Friday the debarment of Pak-Elektron Ltd (PEL), its affiliates PEL Marketing (Pvt) Ltd and Kohinoor Power Company Ltd, and its former general manager for 33 months.

The decision was taken after the company was found engaged in collusive practices during bidding on contracts under the World Bank-financed electricity distribution and transmission improvement project in Pakistan.

The debarment makes the Lahore-based manufacturer of electrical appliances and its affiliates ineligible to participate in WB-funded projects.

Abdul Waheed Butt, PEL’s former general manager, is also ineligible to participate in World Bank-financed projects during this 33-month time period, the group added.

The debarments are part of two Negotiated Resolution Agreements (‘settlement agreements’) under which the company and Mr Butt acknowledge responsibility for the underlying sanctionable practices and agree to meet the specified corporate compliance conditions for release from debarment.

The World Bank-financed project was designed to strengthen electricity distribution and transmission networks to better meet the increasing demand as well as strengthen the institutional capacity of selected distribution companies in Pakistan.

According to the facts described in the settlement agreements — which the companies and Mr Butt do not contest - PEL was part of a trade association group that collaborated to ensure that each received a pre-determined share of five World Bank-financed contracts.

An investigation by the World Bank’s Integrity Vice Presidency found that members of the

group would decide in advance which among them would win particular contracts while setting the prices to be quoted in different World Bank-financed tenders.

Mr Butt was the chairman of the trade association that discussed and allocated two of the five Bank-financed contracts affected by the scheme to the group members.

Under World Bank procurement guidelines, these actions constituted collusive practices.

The settlement agreements provide for reduced periods of debarment in light of Mr Butt’s and the companies’ cooperation and voluntary remedial actions.

As a condition for release from sanction under the terms of these agreements, the parties commit to develop integrity compliance programmes, consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines.

They also commit to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.

The debarments qualify for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010.

Published in Dawn, February 24th, 2018