PM Orders Probe into Alleged Violations in KPT Maintenance Dredging Contract

Prime Minister Shahbaz Sharif ordered the inquiry into alleged procurement violations related to the Karachi Port Trust (KPT) maintenance dredging contract. Sources told ProPakistani that the cabinet division on the instructions of the PM has formed a four-member committee including the Chairman of the PM’s Inspection Commission, the Secretary of the Cabinet Division, the Managing Director of the Public Procurement Regulatory Authority, and a representative from the Intelligence Bureau Division. The Terms of Reference (ToRs) of the committee include investigating any deviations, omissions, or violations in the technical and financial evaluation of the tendering process for the maintenance dredging project, reviewing the rationale and justification for qualifying or disqualifying bidders, identifying individuals or departments responsible for procedural lapses, mismanagement, or potential misconduct during the tender process, and providing actionable recommendations for addressing the current issues, including rectification of the tender process, if required, and safeguarding public interest. KPT had invited bids for approximately 4 million cubic meters of maintenance dredging of its navigation channel to ensure safe sailing of container and other vessels calling at the port which was specified to be completed within 120 days prior to 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 had 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 said 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 percent 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 that required a dredger of a higher capacity to finish the job within deadlines. 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 “this prima facie is a violation of Rule 35 as neither complete technical evaluation report has been announced nor any justification has been provided for acceptance or rejection of the technical proposals” The PPRA letter further emphasized that any “violation of Procurement Rules shall be tantamount to mis-procurement”. KPT, in its response to PPRA, stated that the technical report was ready but had been “withheld pending finalization by the GMs committee of their discussions with CHEC dredging Company.” Later on, The KPT also released the technical evaluation report in December 2024 stating that the Chinese firm is the lowest bidder. Sources said that awarding a 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.