Both Dawn and the Business Recorder carried the same news item on July 4, under different headings - 'PS signs deal with Indian firm' (Dawn) and 'Indian firm to supply iron ore to Pak Steel' (BR): "... The evaluation of offers and considerations were spread over a period of 24 months and finally the transparent decision to award contracts based on lowest price and recommendations of the PNC (price negotiation committee) was taken by the competent authority...."
This message was apparently transmitted by the contract winners (we will call them 'A') and referred to the contentious appraisal of nine offers. Two of the bidders concerned, the losers, (whom we will call 'B' and 'C') are now challenging the decision.
The qualifying word 'transparent' inevitably is used when matters are anything but transparent, and the ambiguous designation 'competent authority' is usually used when an authority is far from competent and does not wish to be pinpointed.
The affairs of Pakistan Steel Mill are ostensibly managed by a board of directors comprising the PSM chairman, Lt Colonel Afzal Khan, and other members nominated by the government, amongst whom the armed forces are well represented: Air Marshal Shahid Hamid (DG, Air Weapons Complex, Wah), Vice-Admiral Taj Muhammad Khattak (chairman, Port Qasim), Sajid Hassan (additional secretary, ministry of finance), Muhammad Ramzan Bhatti (member, CBR), Syed Ali Raza (president, NBP), Tariq Kirmani (MD, PSO), Tariq Rehman (MD, EMCO), Abdul Hafeez Choudhry (joint secretary, ministry industries and production), Khalid Amin Qureshi (joint secretary, ministry of industries and production), Ejaz Ali Pirzada (director, finance PSM).
PSM is one of the charges of our ministry of industries and production, under its minister Liaquat Jatoi. Jatoi is a malleable man, who way back in 1990 was found suitable to be a provincial minister by none other than the notoriously corrupt absconder, Jam Sadiq Ali (brought back from exile by Ghulam Ishaq Khan to be his chief minister in Sindh). Jatoi survived Jam, but when Benazir Bhutto returned to power in autumn 1993 with her chief minister, Abdullah Shah, Jatoi, with multiple corruption cases filed against him, decided it was time to vamoose and boarded a dhow for Dubai. He lived there in style, in his chosen self-exile, until Benazir was dismissed for the second time. He has now been politically resurrected and rehabilitated by the white-washed Chaudhry Shujaat Husain and appointed minister.
The secretary in Jatoi's ministry at the time of the 2003 Steel Mill scam was engineer doctor Akram Sheikh, a government servant who had previously served as the managing director of the Heavy Mechanical Complex at Taxila, as managing director of Pakistan Steel, and as secretary Ministry of Communications. He retired on June 13 2003 and is now executive director of the Higher Education Commission and chairman of the Pakistan Engineering Council.
The PSM chairman, Lt Colonel Mohammad Afzal Khan, a retired 'gunner' of the Pakistan Army, joined PSM in the mid-1980s. In 1987, when general manager Security (Watch & Ward), an FIR (No.03/87 Bin Qasim PS) was lodged against him for his alleged involvement in the murder of a PSM employee, Hafiz Chandio, and he was sacked. He was reinstalled, with the help of 'friends', in 1989 and posted as the PSM general manager in Lahore. He returned to Karachi in 1994 as acting director, marketing, and in June 1995 was dismissed for the second time, charged with corruption and favouritism. Again, his 'friends', in high places and the lowly dealers' mafia brought him back to the Mill.
He lasted until March 1996 when for the third time he was sacked having been found guilty of massive corruption and misuse of power. FIR 01/97 was registered against him in January 1997 by the FIA on the charge of misuse of his official position and the deliberate sale of finished products to bogus dealers using fictitious documents. (Also cited in the FIR was a PSM dealer, Chaudhry Abdul Razzak whose daughter was married to Colonel Khan's son in 1999.)
In 1998, Khan wangled not only another reinstatement in PSM but also an elevation to the post of managing director, and the following year he was appointed chairman.
These facts were related by The Herald, in its issue of September 2001. In the November issue Colonel Khan came out with his defence, pleading that he had always been a 'symbol of accountability' and 'had sacrificed his career three times guarding the interests of Pakistan Steel, every time without any inquiry, charge sheet, show cause notice, explanation or personal hearing.' Colonel Khan's term expired on June 30 2002. He sought an extension of his contract, Minister Jatoi recommended that he be given a further two years, and Prime Minister Jamali confirmed that he be allowed to continue with PSM until December 2004.
Back now to the Dawn news item. The iron ore supply contract signed in August 1997 expired on August 31 2002. At PSM's request it was extended up to November 30 2002, then to March 31, 2003, and finally up to June 30, 2003.
For the ore contract for the next five years (2003-2008) suppliers were asked on November 9, 2001, to prequalify. The prequalified suppliers submitted their bids by November 25, 2002, which bids were computer-evaluated by the PSM Price Negotiation Committee chaired by Chairman Afzal Khan. All the bidders were called for negotiations on February 6, 2003.
After the negotiations were completed the negotiated bids were again computer-evaluated on February 7 and again on February 26, 2003. Six bidders, amongst which were 'B' and 'C', were short-listed. 'A' was not on the short list, not one of the chosen six.
Then, suddenly after office hours on March 9, a Friday, the goal posts were moved. The criteria for evaluation were changed without consulting the PNC members. Faxes were sent to the bidders abroad. The weekend closure (Saturday and Sunday) and different time zones were not taken into consideration. The bidders were asked to respond by the evening (PST) of Monday March 12. Not even one full working day was allowed to reconsider bids worth around $150 million. Why? To accommodate 'A'? The bidders complained to the to the minister, to his secretary, and even to the prime minister, who directed minister Jatoi to hold an inquiry. Jatoi thereupon appointed a committee on June 2 comprising: the retired Major-General Mohammad Mohsin, chairman, National Fertilizer Corporation, Zahid Hussain, chairman PIDC, his ministry's joint secretary, Mohammad Hasan Zaidi, and deputy secretary, Ilyas Dar.
The committee called and questioned all concerned. - including the complaining PNC members, PSM officers, and bidders 'A', 'B' and 'C'. Distressed, they wrote a 50-page report recommending that offers received be scrapped and bids re-invited. Other options were also suggested.
The report arrived at the desk of engineer doctor secretary on June 12 with which he agreed. He accepted that there had been serious lapses on the part of PSM, that all was not right, all was not well, but a bureaucrat to his finger tips, the next day he advised the minister to send the report to the PSM board, and that same day retired in full glory from the government he had so well served.
The minister did not follow his secretary's recommendation. He did not send the report to the Board, but sat on it for eleven days. On June 24, 2002, he ordered PSM to fax the existing suppliers:
Pakistan Steel intends to extend the validity of current FOB Contract further for the period up to June 30, 2004, on the same terms and conditions of contract dated 1.9.1997. (Your) confirmation in this regard must reach us positively by June 26, 2003."
Two out of the three regretfully expressed their inability to supply, and the contract was signed with 'A' on July 2, 2003. 'B' and 'C' have requested the prime minister for a review.
Apart from the impropriety, the nation stands to lose heavily both in cash and in kind. However, it is never too late - the situation can yet be salvaged. This nation is internationally deemed to be corrupt. Such is our destiny - we were born to be corrupt, and yet we persevere in 'demanding' accountability. If this government adheres to the norm, it will keep its mouth firmly shut.