Tag Archives: PPRA

PPRA: defender or derailing Infrastructure Development in Pakistan

on 04/09/2018

(Focusing on PPRA application in Mega Infrastructure Projects)
By M. Haris Farooqi

“PPRA is followed so that this project may be executed”. This myth has been encircled us since last decade. Is it really true? Few pages of documents can ensure transparency? Is transparency really required in projects for project success? Is PPRA helping us or not?

Who is required to follow PPRA and who is actually following it? What is the real purpose of PPRA? Does it apply to all kinds of procurements? What is the role of an engineer/consultant if PPRA is governing rule and no one can deviate from this rule?

A few years ago, a meeting was organized for an Electrical and Mechanical (E & M) services for a huge/large infrastructure project. The tender submission date was due after a few days from the meeting. It has been informed in the meeting that PPRA rule is being followed and only Financial Bid will be received instead of Technical and Financial Bid together, as per the general practice of E&M projects.

After enquiring about this major decision, it is confirmed from authorities with confidence that all procurement is as per PPRA rule. The executing agency quoted PPRA 2009 rule 36. Procedures of open competitive bidding.– Save as otherwise provided in these rules the following procedures shall be permissible for open competitive bidding, namely:- (a) Single stage – one envelope procedure.– Each bid shall be comprised of one single envelope containing, separately, financial proposal and technical proposal (if any). All received bids shall be opened and evaluated in the manner prescribed in the bidding document.” Now the question as to why have not technical bids been invited in our case; because the word “if any” is attached with technical proposal requirement. (For information: the word “if any” is being removed from PPRA 2014 amended up to 06-01-2016). It was really shocking how PPRA is being interpreted wrongly for such large size E&M projects, or it was merely an anomaly in PPRA 2009 which is removed now?

PPRA website FAQ state answer of one of the important question as below:

Question: Only one tender/bid is received in response to a tender notice advertised in both or one of the media (Authority’s website/ print media), should the single tender be accepted or the tender is re-advertised.

Answer: Punjab Procurement Rules, 2014 don’t put any limit on a number of tenders/bids received in response to tender notices provided that, the procurement opportunity has been advertised in the prescribed manner. The single bid may be considered if it meets the evaluation criteria expressed in tender notice and is not in conflict with any other rules, regulations or policy of the Punjab Government. However, the procuring agency should make a decision with due diligence and in the light of Rule 4 “Principles of Procurement”.

As per general practice in the Government Projects, single Bid is supposed to go to re-bidding for at least three times before consideration. No one in the Government is supposed to accept or use this rule even it is clearly mentioned on the website. Even re-bidding/rejection is considered since this is not a violation of any rule because rejection or re-bidding is always the option for Client. However, the time duration for the re-bidding is added in the project timeline and a lot of time is wasted restricting timely execution of the project. In fact, everyone is reluctant in using this single bid acceptance method which creates ambiguities in the general public mind.

Another question in the website state as below:

Question: Can procuring agency reject bids without assigning any reason?

Answer: In terms of Rule 35(1) of the Punjab Procurement Rules 2014 the procuring agency may reject all bids or proposals at any time prior to the acceptance of a bid or proposal. The procuring agency shall immediately give notice of rejection of bid(s) to all bidders. On request of the bidders, the Procuring Agency shall intimate the reasons for rejection of bids but will incur no liability on this account nor is required to justify the rejection of bids.

The procuring agency is authorized to reject the bid and is not liable to give justification. At one end PPRA seems the sole authority for any decision and no one is authorized to take any decision beyond the PPRA rules and regulation and at the same time giving full authority to the agency for rejection what so ever. This may lead to manipulation of authority since it seems the only power in the hands of the agency.

Projects handled by rules or executed with authority are two different spectrums in Pakistan. Interpretation of rules is still in the hand of the agency. We are giving the opportunity to the procuring agency to shift responsibility to PPRA rules by using it and applying it by their own requirement. The Projects look protected and secured in the hands of Engineer/Consultant; however, they are forced to follow the rule.

Recently we faced another serious issue in many of the E&M projects where the experience available in the market does not respond to prequalification criteria specifically PEC registration for the specified services is not meeting the requirement of the project even after 3-4 bidding processes. PPRA defines prequalification requirement to be met before proceeding, however, it is unable to define any situation arises due to unavailability of such experience in Pakistan. The Answer is “Go for international tender”, which means much higher cost, more time duration and failure in utilizing of our own resources. Interestingly “Joint Venture” details are available partially for Consultant selection but PPRA 2014 is silent about “Joint Venture” option for contractors. The international tender shall be required when no experience of such services are available at larger or smaller scale in the local market. Preference shall be given to local bidder with a joint venture from International bidder (if required).

Any prequalification requirement shall be allowed to be relaxed including PEC certification criteria by the Procuring Agency to save time, develop local market and utilizing our own resources. What PEC certification tell us; how many engineers, funds, previous project financial size etc are available. But these criteria never discussed the pure technical expertise available to some contractor. We will further discuss this PEC certification requirement and its real importance in another article.

In a meeting of another private group project where the designer/R&D expert is foreigner, He is an expert in developing renewable resources in Pakistan and working efficiently in his area of renewable resources. During the meeting, he stated, “Thank God this is not government project and we don’t need to follow PPRA”. I don’t need to comment on it further and I believe this is self-explanatory.

Different provinces in Pakistan are following different versions of their own provinces which are quite different from each other although they are typically originated from federal PPRA. In one of the meetings held in Peshawar, I reminded that Client continuously asking me to forget Punjab PPRA and follow KPPRA. I was quiet on this issue because I believe there would be no significant difference in format of both but when I returned from the meeting, downloaded KPPRA and I found myself in real trouble to have complete paraphrasing with many alterations, as there is now more interpretations and more confusion. Moreover, how can bidders from other provinces understand their requirements if they are using a different version of the same document?

The chapter – II Procurement Planning, item 10 “Specifications” Punjab PPRA 2014, is a real mess for public procurements favoring equipment and material to be used of cheap and lowest quality from China and Korea etc. With no offense to our long and strong friendship with these countries, Pakistan is just a dumping place of scrap for them in most of the cases. This rule prohibits preparation of specification with brand names or similar (origin) and promotes open bidding for all the brands in the world. We are not technically strong enough to rule out any low-quality product by preparation of strong technical specification. At the same time, our incapability also prevents us from procuring good quality products from these countries which are manufactured for America and western countries. Theoretically, PPRA is correct in this clause but application in Pakistan is a real sabotage of long-term services of the project component. We must give authority to a concerned specialist to decide this manufacturer country of origin, a list with enforcement of at least 3 equal options to avoid favoritism of any single brand/origin. In addition, the same clause is not applicable to ‘Private Client’ which actually again raises questions about the application of procurement rules for a private organization or not. Why does not a private organization follow unified rules for procurement?
PPRA rules were initially developed for Private companies to follow, however, at the moment their implementation is really focused on government project only and private companies really do not care PPRA at all. In a recent update of 2016, the word PUBLIC is added which further confirms/validate this. We need to see that private procurement shall also be regularized by some rules and regulation and exempted them for any procurement process will be another disaster in long-term effective and diversified growth of infrastructure in Pakistan.

PPRA rules can only guarantee transparency if followers want to follow it for transparency, otherwise, it’s become a mess or haven for persons who want to manipulate it for their own cause. The society shall be developed to understand the principles of public procurement and its effect on the infrastructure development overall. Such procurement tends to become disasters for projects and common public, such misprocurement are quite evident around us in hospitals, highways/roads, and infrastructure projects.

The competent authority must have more power and project cost limit to award project without following PPRA or any other rule. Their authority reduces chances of misprocurement due to their real capability to understand such procurement process as per prevailing market trends.

The PPRA rules shall be unified for federal and provinces. The PPRA rules shall be reviewed on yearly basis and updating by the expert panel shall be added /deleted as per successful/unsuccessful project experience instead of merely following the rules of other countries and expertise of higher qualification with less experience in Pakistan. Experts from the market are required for procurement principles formulation. (The author is Principal Engineer NESPAK)

Approval from CCI obligatory for Regulatory bodies notification

on 01/03/2017

The Lahore High Court (LHC) has suspended a notification by the federal government transferring administrative control of five regulatory bodies to their respective line ministries. LHC Chief Justice Syed Mansoor Ali Shah observed that the prime minister should have sought approval from the Council of Common Interests (CCI) before issuing the notification. The government had issued the notification on Dec 19, placing the control of the National Electric Power Regulatory Authority (Nepra), Oil and Gas Regulatory Authority (Ogra), Pakistan Telecommunication Authority (PTA), Public Procurement Regulatory Authority (PPRA) and Frequency Allocation Board (FAB) under their respective ministries. Pakistan Tehreek-i-Insaf secretary general Jahangir Tareen and a citizen, All Irfan, had filed identical petitions in this regard. Advocate Sheraz Zaka, the lead counsel for the petitioners, argued that under the law it was mandatory for the government to seek an approval from the CCI before transferring the control of autonomous regulatory authorities to their respective ministries. He said that in many judgements the Supreme Court had declared approval from the CCI a mandatory provision for this purpose. Advocate Zaka pointed out that on the one hand the government was involved in the production and transmission of electricity, and on the other, it wanted to assume the role of a regulator. Similarly, he said, placing the PTA and the FAB under the control of the Ministry of Information Technology and Telecom, the PPRA under the Ministry of Finance and Ogra under the Ministry of Petroleum and Natural Resources, was a case involving conflict of interest. The lawyer requested the court to set aside the notification. A deputy attorney general argued that approval of the CCI was not necessary as the cabinet had approved the measure. In his remarks, Chief Justice Shah said that the rule of law was indispensable as the prime minister should have sought approval of the CCI before issuing the notification. He suspended the notification and asked the attorney general for Pakistan to appear at the next hearing.