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February 20, 2012

Purchase of 75 engines by Pakistan Railways

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February 20, 2012

ISLAMABAD: The PPP government’s recent actions could prove the last nail in the coffin of Pakistan Railways, as a cabinet’s special committee has condoned the PPRA rules violations and allowed PR to go for the procurement of 75 locomotives from China at a cost of $105.143 million (Rs12.7 billion).
Moreover, a tamed Federal Investigation Agency has once again been used to get a free chit for such procurement at the cost of taxpayers’ money.
Details reveal that a ministerial committee headed by interior minister Rehman Malik, a few days ago, after deliberations and viewing the FIA report on the matter, gave a go-ahead to the railways ministry to procure 75 locomotives from a failed supplier. One of the members of the cabinet’s special committee, Sheikh Waqas Akram, went public against such huge corruption and said that those responsible for this should be held accountable.
In 2008, soon after the tender for the mega procurement, the National Assembly’s standing committee on railways headed by Sardar Ayaz Sadiq took up the matter and unearthed all irregularities and illegalities. Reportedly, nine out of 10 members of the Public Procurement Regulatory Authority (PPRA) voted for not giving an exemption to buy 75 Chinese locomotives but only chairman railways who is also secretary railways ministry, voted for it.
PPRA rules were grossly violated earlier in purchase of 69 engines and the department suffered a heavy loss as 32 of them went out of order.
A sub-committee of NA Standing Committee held a series of meetings and after due deliberations, discussions and scrutiny of record made available by the Pakistan Railways, detected violations of Public Procurement Rules, 2009 which include Rules 26, 29, 30, 33, 36 (b) (viii) and Rule 48 of the Public Procurement Rules, 2004. Pakistan Railways, however, defended itself position on the basis of national interest, difference of prices offered by the bidders and equal treatment to both the

participating firms.
Despite adverse recommendations by the NA Standing Committee, in 2009 the Pakistan Railways paid Rs1.905 billion as down payment for procuring 75 Chinese locomotives and sought to open an LC (Letter of Credit) in this regard.
Sheikh Waqas Akram publicly said that the Chinese company had attached forged and fake performance certificates, which were initially not attached with the tender but were attached with the documents after the National Assembly’s Committee took cognisance of the matter. The certificates had to be issued by the Railway department of the country to whom the locomotives were to be supplied and were to be attested by the Pakistan Embassy functioning in that country but the documents, which were attached, were not attested by the embassy, he said.
He held that it was a faulty procurement therefore there was criminal intent behind it and responsibility should be fixed against those responsible. Sardar Ayaz Sadiq while talking to The News said that he was present in the meeting recently held on the issue which was also attended by minister, secretary interior and new and old administration of PR and that the Railway people did not reply to the irregularities and illegalities committed in award of contract to a favourite supplier.
“It is all being done to receive kickbacks”, said the MNA adding: “I had referred the case to NAB but NAB has not mentioned this case while presenting its report to the Supreme Court”. He said that he would write to the Supreme Court if NAB had deliberately concealed this issue from the apex court.
He said that during the meeting, Sheikh Waqas Akram, a PML-Q minister, also expressed dissatisfaction over the PR’s activities. He said the Railways had disbursed ten percent down payment to the supplier before getting any formal approval.
He mentioned that he himself appeared before the Supreme Court in the same case and upon SC’s direction referred the case to NAB. It is pertinent to mention here that earlier in 2001 Railways Ministry purchased 69 locomotives from China and several things were yet to be finalised as there were huge deviations in the contract and the procured Chinese locomotives had also several defects like cracks in the frames, overweight and lifecycle costs, due to which it was termed a one-sided contract at one stage. Several inquires were held into this scam of the Musharraf regime.

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