LAHORE  - The government is bypassing relevant PPRA rules to facilitate China to make $35 billion investment in the energy sector without any competition, a knowledgeable source insists. Without opening the projects for international bidding or competition and bypassing PPRA rules, the investment by the neighbouring country amounts to giving it a good business on its own conditions.
A former senior official of water and power sector who does not want to be named said while talking to TheNation that by relaxing PPRA rules Pakistan is losing at competitive edge and international community has already started expressing its objection about the procedure.
It may be recalled here that former president Asif Ali Zardari had made several visits to China and signed dozens of MoUs with the Chinese companies but his government could not dare offer direct investment to neighbouring country fearing legal consequences.
The source said that it was only the PML-N government which offered all mega projects to Chinese companies following their demands that all the projects should be offered to them without opening for international competition.
Asked if it is possible to attract such a huge investment under the prevailing rules of business, the source answered in the negative.
“It was a long standing demand of the Chinese companies that the existing rules of business in Pakistan should be changed before its announcement of mega investment in different sectors. The government, however, did not amend the PPRA rules but assured the friendly state to provide full legal umbrella regarding its investment. But now the government is all set to change the rules.” Answering a question, the source said it was a fact that due to bad law and order situation in Pakistan no other country is ready to invest here. But, he hastened to add that it does not mean that the relevant laws should not be followed. "What will we do in case of another episode like defective locomotives supplied by a Chinese company to Pakistan Railways during the Musharraf period," he asked.
Another official cited the example of Lahore-Islamabad Motorway the contract of which was also given the same way. He said the contract of M-2 was awarded to Daewoo by the then PML-N govt in the 1990s and no other company was allowed to offer bids although Japan and the World Bank had raised objections about the feasibility of the project. The govt overruled all objections terming the project highly valuable strategically.
In response to a query, the official replied: “Yes, the government can amend the Public Procurement Regulatory Authority (PPRA) rules but it will open a Pandora's box and give a way for the promotion of favouritism.” China has agreed to invest billions of US dollars in major projects, including dams, motorways, fiber-links, garments city, mineral resources and in energy sector which include coal, construction of tunnels, economic corridor, Gwadar port, oil refinery, railway and agriculture.
Estimated $22 billion investment is likely only in Thar coal project in Sindh and hydro-electric projects in KPK. Pakistan is also working with China to build its infrastructure as recently inaugurated Gwadar to Kashghar corridor will benefit millions of people across the country. China also expressed it commitment for the revival of Pakistan Railways and is helping to setup new railway tracks.
Another government official, however, said that though PPRA rules are aimed at ensuring transparency in public contracts, they often become a hurdle in speedy implementation of agreements. He added that Chinese investment was in the interest of the country and not for the government.
Wapda former chairman Shamsul Mulk when contacted for the comments said: “It is unfortunate. The best way is that the government must adopt the rules but discipline is more important than rules. You have the reason that why are you adopting shortcuts. If there is no compromise on transparency and quality, then I think there is no problem in Chinese investment,” said he, however, quickly added that why transparency and quality assurance in our country was the biggest issue.
Wapda former chairman Gen (Retd) Zulfqar Ahmed also opposed such kind of investment in any field by any company which would be done without adopting legal process. He also raised questions regarding more costly coal projects in Pakistan when compared with other countries.