Federal Govt’s Karachi Port Planning to Award Contract to Company of Choice

In a blatant affront to the Shehbaz Sharif government’s proclaimed commitment to transparency and its efforts to position Pakistan as an investment-friendly destination, Karachi Port Trust (KPT) officials are embroiled in a controversial decision to award a critical dredging contract to a non-compliant Chinese firm. Sources told ProPakistani that KPT had recommended the award of a vital dredging contract to a Chinese firm contrary to the recommendations of KPT’s technical committee which had evaluated their tender offer along with other bids from international companies. This alarming move has not only undermined public procurement rules but also jeopardized vital infrastructure work essential for the port’s operations. KPT had invited bids for approximately 4 million cubic meters of maintenance dredging of its navigation channel to ensure the safe sailing of containers and other vessels calling at the port which was specified to be completed within 120 days before the start of the monsoon season. Bids were received from 4 international companies whereby 3 of the bidders proposed dredging equipment larger than 15,000 cubic meters (cum) capacity whereas 1 bidder proposed underpowered equipment and was found to be non-compliant with the timelines and specified quality standards. In accordance with the specifications, terms, and conditions of the tender, sources confirm that the KPT bid evaluation committee had rejected various bids received including the Chinese offer due to noncompliance, and performance concerns, whilst recommending a large Dutch dredging company as being technically qualified with proven expertise and larger-capacity dredgers. During the evaluation, the KPT team highlighted the need to have a large-sized dredger to complete the job as per the given soil conditions and work methodology, only 20 – 25% of a dredger capacity can be used for the removal of material as per international and engineering standards whilst the balance capacity is filled with water. The qualified bidder had proposed a dredger of greater than 20,000 cum capacity based on its experience, and all other bidders except the Chinese had also proposed large dredgers to complete the job. KPT’s in-house dredger of comparable capacity to the Chinese bidder’s had failed in similar operations, which was noted by the technical committee in their report as requiring a dredger of a higher capacity to finish the job within deadlines. Dredging is essentially required to be carried out as per standards to ensure that vessels calling at the port can enter safely without risk of grounding and so that larger capacity vessels may avail of navigational channels. Sources on condition of anonymity revealed that the high-ups of KPT managed to qualify the Chinese bidder by overruling the technical committee despite strong engineering evidence that the Chinese bidder would not be able to perform. Alarmingly, internal sources reveal that KPT officials were actively delaying the publication of the technical evaluation report however the port department finally published the report on Tuesday which confirmed that China Harbour Engineering Company Ltd and AL Fajr International (JV) are the lowest bidder. Earlier, PPRA, upon complaint from a bidder, wrote to the KPT highlighting that due process was not being followed and stressed the requirement of transparency and the need to publish the technical report to avoid any mis-procurement. In its letter, PPRA stated that: The PPRA letter further emphasized that any “violation of Procurement Rules shall be tantamount to mis-procurement.” Despite this, KPT has continued to suppress the report and ignored PPRA’s directives to ensure transparency. KPT in its response to PPRA demonstrated a complete disregard for the rules and showed favor to the non-qualified bidder when it confirmed that the technical report was ready but had been “withheld pending finalization by the GMs committee of their discussions with CHEC dredging Company”. Sources said that KPT delayed the technical report to give the Chinese bidder a chance to revise its offer to become compliant in a clear breach of procurement rules.  The Chinese firm reportedly has various outstanding legal cases against it due to non-performance as per sources, but KPT continues to entertain them at the behest of various political bigwigs to the detriment of public interest leaving taxpayers to foot the bill for incompetence and nepotism. Certain Board Members raised serious concerns about the legal, financial, and operational risks of this procurement and questioned the attempts by Port GMs to award the contract to a non-qualified bidder. Such members suggested engaging with all qualified bidders in order to secure the most advantageous bid for KPT by reaching a negotiated outcome and avoiding the risk of legal challenges, however these observations were overruled. Awarding the contract to a non-compliant bidder could have catastrophic consequences as the dredging project is unlikely to meet critical deadlines, endangering vessel navigation during the monsoon season. KPT Secretary Ekram Ullah in response to queries shared the technical evaluation report which states that China Harbour Engineering Company Ltd and AL Fajr International (JV) is the lowest bidder and it will complete the work in 120 days.