Bidders reject criteria for outsourcing railways freight operations

Published September 18, 2021
Most of the participating firms have described as unfair the bidding process for outsourcing of commercial operations of freight trains by the Pakistan Railways. — AFP/File
Most of the participating firms have described as unfair the bidding process for outsourcing of commercial operations of freight trains by the Pakistan Railways. — AFP/File

LAHORE: Most of the participating firms have described as unfair the bidding process for outsourcing of commercial operations of freight trains by the Pakistan Railways (PR).

Rejecting the evaluation process, bidders have urged the PR authorities to go through the facts, bidding documents, rates and requests for proposal (RFP) and ensure merit while awarding the projects to eligible firms.

“Ten of the 13 bidders have rejected the bidding evaluation criteria, decisions initiated in February and completed in August. After the whole process took almost six months, the typical bureaucratic and anti-private sector culture and favouritism within the PR, which is behind its destruction also, finally worked,” an official source deplored while talking to Dawn on Friday.

According to a letter written by one of the firms to the PR’s Grievance Committee chairman, it worked on a detailed plan and submitted its bid to ensure highest yield per wagon per annum” as per the requirements of the RFP document.

“However, to our disbelief, we received a letter from the office of the chief marketing manager on Aug 31, informing us of non-acceptance of our ‘financial bid’ on the basis of our offered bid rates being less than the existing notified rates of the PR for the destinations for which we have submitted our bid,” the letter reads.

It called the reason unjustified, saying the railways neither provided an exhaustive schedule of existing notified rates for all destinations in the RFP nor laid down any instructions in the RFP directing all interested parties to use any benchmark rates for the destinations as ‘reserve price’ for the submission of bids.

On the contrary, instructions in the RFP and, more specifically, the Financial Proposal Submission Form Multiple Train Options’ Note unambiguously mentioned that “the bid would be evaluated on the basis of highest yield per wagon per annum subject to maximum capacity of loading and unloading yards”. Even in the minutes of the pre-bid meetings, there was no reference to the tariff.

The RFP clearly establishes that the bidder with the highest yield per wagon per annum will be declared successful. Imposition of any new criterion or requirement at this stage, which restricts the participation of a bidder, is therefore considered unjust and prejudiced.

Another firm also wrote a letter, stating: “We are shocked at your decision as it is extremely important to understand that the tender ensures annual guaranteed earning for PR, regardless of whether the wagon is partially or fully loaded (up to the amount provided for in the RFP), at the stipulated time by PR. Earnings mean that PR is guaranteed ‘full earnings’ even when lower volume is loaded on a wagon therefore any comparison with per tonne, or per tonne kilometre rates becomes hypothetical, arbitrary and mala fide.

“It is extremely unfortunate, illegal, discriminatory, and arbitrary that PR while clearly and repeatedly declaring in the RFP ‘highest yield per wagon per annum’ as the criteria for awarding the tender, post bid arbitrarily added a new evaluation standard to reject our bid.”

Other firms also submitted grievance letters to the committee declaring the bidding process unlawful for being against the Public Procurement Regulatory Authority rules.

When contacted, PR Chairman Dr Habibur Rehman Gilani said the bidding process was completed by an evaluation committee.

Published in Dawn, September 18th, 2021

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