• OGDC clarifies Rs72 billion scam

      January 28, 2012
      Print : National

      ISLAMABAD: Apropos to the news item titled “Another Rs72 billion oil scam in the making” published in The Daily News and Daily Jang on 26th January, 2012. At the outset it may be clarified that the quantum of contract for consultancy services for the three fields is Rs255 million and not of Rs72 billion. It may be mentioned that the story is totally baseless, concocted and is in no way near to the truth. OGDC therefore rejects the allegations leveled in the said news items and confirms that the above news is based on imaginary figures / assumptions and lack of information on the part of the correspondent.

      OGDC has reasons to believe that the story is motivated and only serves the vested interests of those who intend to create impediments in the development of important projects undertaken by OGDC. This is being done only for personal gains. The fact is that OGDC has been trying to develop Kunnar Pasakhi Deep and Tando Allah Yar (KPD-DAY) fields since the year 2005 but unfortunately there has been no progress and the tendering process had to be repeatedly annulled. KPD-TAY, when fully developed will produce 284 mmscfd gas and 4800 bbls of oil besides 387 Metric Tons of LPG. Had these projects been timely developed, the gravity of acute energy crisis prevalent in the country would have been largely mitigated.

      After having been unsuccessful at different occasions to award the development contracts on turn-key basis, OGDC decided to set-up the projects by itself. OGDC therefore initiated necessary measures for self execution with the objective of completing the projects without further delay and in a cost effective manner. Accordingly the Company, through press tendering process started the process for prequalification of engineering & design consultants.

      Fifteen companies applied but only viz: Enar Petrotech (Pvt) Ltd., (ENAR) ILF Pakistan (Pvt) Ltd., (ILF), Zishan Engineering (Pvt) Ltd., (Zishan), Combined Engineering & Integrated Solutions (Pvt) Ltd., and Gas Liquids Engineering were prequalified strictly on the basis of eligibility requirements as per laid down pre-qualification criteria. The process was completely transparent and none of the pre-qualified consultants including ENAR objected to it. Later, the bids on two envelops basis for the award of contracts for Design & Engineering Consultancy for KPD-TAY, Nashpa & Mela were then invited from the pre-qualified bidders only. In response the tender for KPD-TAY only one bidder i.e. M/s ENAR submitted their bid which was found non compliant to the Terms of Reference (TOR) during the preliminary examination. As only one bid was received and that too technically non-responsive hence, the requirement was re-tendered. In response to this tender two companies viz ENAR and Zishan submitted bids for all the three projects i.e. Mela, Nashpa & KPD-TAY Development Projects. Zishan submitted the bids of Rs42.5 million, Rs45 million & Rs168 million for Mela, Nashpa and KPD-TAY respectively as against Rs75.73 million, Rs93 million and Rs278 million respectively filed by ENAR. Being technically responsive & financially lowest evaluated bidder contracts were therefore awarded to Zishan.

      The above facts establish that cumulatively the bids of Zishan were about 57% of the amount quoted by the loosing bidder, ENAR. This difference in no way could have been ignored by the management. By awarding the contract to the lowest bidder the company ensured savings of Rs192 million.

      It may also be clarified that making presentation before the grievance committee on frivolous grounds and mere accusations do not bar OGDCL for proceeding ahead for the implementation of the vital projects of national importance. Rule 48(4) of the PPRA Rules 2004 clearly state that mere filing of a complaint cannot be made the basis for halting the procurement process. The allegation regarding the hiring of services of some ex-management officials of ENAR by M/s Zishan is also misleading as these professionals are independent consultants and such there is no bar on them to extend their services to M/s Zishan.

      The above clarifications clearly suggest that the news items appeared in Daily News and Daily Jang dated January 26, 2012 are totally baseless and devoid of any substance. It is regretfully noticed that continuous attempts are being made to derail the Company’s sincere efforts for narrowing the energy shortfall. This clarification has been issued to place the actual facts and circumstances before the people of Pakistan.

      Aftab Maken adds: The amount of Rs72 billion was referred with respect to the total cost of the projects and not for the consultancy services charges only.

      When an engineering consultant, not having related experience, and accompanied by personnel facing charges of corruption and profession misconduct, is selected in a suspicious manner i.e. without announcement of prequalification results, it raises questions on the transparency of the prequalification and selection of the engineering consultant and consequently on the execution of the projects.

      Considering the fact that M/s Zishan Engineers (Pvt) Limited (ZEL) was itself not selected on merit but on some “other criteria / grounds”, one could easily establish that after the contract award and during execution of projects, M/s ZEL would also adopt “other criteria / grounds”, rather merit, for the specifications, evaluation and recommendation of high cost machinery / equipment and it is “Supplier” which apparently appears to be the “actual assignment” of M/s ZEL.

      OGDCL’s levels allegations that “story is motivated”, “serves the vested interest, and personal gains” without disclosing the “reasons” for such allegations.

      If the process for prequalification of engineering and design consultants was transparent and as per eligibility and other requirements then what was the reason that OGDCL did not follow the PPRA’s Rule # 35 “Announcement of Evaluation Reports” and it’s relevant SOP’s like SOP47 “Announcing Tender Evaluation”.

      The prequalification results were never announced on its website by OGDCL. Similarly, the evaluation reports of the three projects of MELA, NESHPA & KPD-TAY were neither published in newspapers nor uploaded on OGDCL’s website which is required as per PPRA rules and SOP’s. The News stands by its story.

      OGDC clarifies Rs72 billion scam was posted in National of TheNews International - https://www.thenews.com.pk on January 28, 2012 and was last updated on January 28, 2012. This news story is related to Archive - breaking news, latest news, pakistan ne. Permanent link to the news story "OGDC clarifies Rs72 billion scam" is https://www.thenews.com.pk/archive/print/343642-ogdc-clarifies-rs72-billion-scam.