Prime Minister Shahbaz Sharif has directed an inquiry into alleged procurement irregularities in the Karachi Port Trust’s (KPT) maintenance dredging contract. The investigation focuses on potential violations in the tendering process and aims to ensure transparency and accountability.
On the Prime Minister’s instructions, the Cabinet Division has formed a four-member committee comprising the Chairman of the PM’s Inspection Commission, the Secretary of the Cabinet Division, the Managing Director of the Public Procurement Regulatory Authority (PPRA), and a representative from the Intelligence Bureau.
The committee’s Terms of Reference (ToRs) include examining procedural lapses, deviations, or omissions in the evaluation process, determining the rationale for bidder qualifications or disqualifications, and identifying those responsible for mismanagement or misconduct. The committee will also recommend corrective measures, including revisiting the tender process if necessary, to protect public interests.
Context of the Contract
KPT invited bids for a critical maintenance dredging project, requiring the removal of approximately 4 million cubic meters of sediment from its navigation channel. The project, vital to ensuring safe vessel passage, was to be completed within 120 days before the monsoon season.
Four international companies submitted bids, three of which proposed large dredgers exceeding 15,000 cubic meters (cum) capacity. However, one bidder, a Chinese firm, offered lower-capacity equipment that was deemed unsuitable for the timeline and quality standards specified.
KPT’s bid evaluation committee recommended awarding the contract to a large Dutch dredging company with a proven track record and equipment exceeding 20,000 cum capacity. The decision was based on the soil conditions, methodology, and the limited operational capacity of dredgers, which only use 20–25% of their capacity for material removal, with the rest filled by water.
Concerns Raised by PPRA
However after the contract was awarded, the Public Procurement Regulatory Authority (PPRA) flagged irregularities in the process after a bidder’s complaint. It criticised KPT for not publishing the technical evaluation report and noted a possible violation of Rule 35, which mandates transparency in procurement decisions. PPRA warned that non-compliance with procurement rules could result in mis-procurement.
KPT initially withheld the technical report, citing ongoing discussions with the Chinese firm. However, the report was eventually released in December 2024, declaring the Chinese company as the lowest bidder despite its non-compliance.
Risk of Delays
Experts have warned that awarding the contract to a non-compliant bidder could jeopardise the project’s completion. The dredging may fail to meet critical deadlines, potentially disrupting vessel navigation during the monsoon season and posing severe operational risks.
