A recent judgment of the Peshawar High Court has not only highlighted the importance of the law dealing with public procurement, but also exposed the haste in which the provincial government had given sanction for awarding five mega development projects to the National Logistic Cell (NLC) in Peshawar and Mardan without fulfilling legal requirements.

A division bench comprising Chief Justice Yahya Afridi and Justice Abdul Shakoor had on July 12 disposed of a writ petition filed by the Khyber Pakhtunkhwa Contractors Association and had set aside the approval given by the KP chief minister for award of the contracts to NLC by declaring it against the provisions of the KP Public Procurement and Regulatory Authority (KPPPRA) Act, 2012.

`The sanction accorded to the impugned five projects by the worthy chief minister of Khyber Pakhtunkhwa is against the clear provisions of the KAPPRA Act and the settled principles of law and are devoid of legal force, and thus set aside,` the bench has ruled in its detailed judgment.

The bench ruled that the mode and manner in which the approval of the five projects had been granted to NLC by the provincial government through direct sourcing was in complete violation of the spirit of KAPPRA Act and KAPPRA Rules.

The KPPPRA Act is an important piece of legislation aimed at ensuring transparency in public procurement of goods, services and works by the procuring agencies. This law was passed by the provincial assembly on Sept 3, 2012 and the KP governor gave assent to it on Sept 16, 2012. Subsequently, the Act was published in the official Gazette on Sept 20, 2012.

This law had replaced the KP Public Procurement of Goods, Works, Services and Consulting Services Ordinance, 2002.

Section 3 of the Act provides: `All public procurements shall be conducted in such a manner as provided in this Act, rules and regulations made under this Act and shall promote the principles of transparency, economy, value for money, accountability and swift grievance handling.

Under the Act, the KP Procurement of Goods, Works and Services Rules 2014, were notified by the government in 2014.

In the instant case, the petitioner had made several prayers to the high court. The petitioner had requested the court to declare the direct contracting/sourcing to government organisations over private sector organisations through Rule 3(2)(c) of the KPPRA Rules as being illegal, unfair, discriminatory; to declare Rule 3(2) (c) of the KPPRA Rules as being against the spirit and purpose of the KPPRA Act and are ultra vires of the KPPRA Act and are unconstitutional; to direct that the KPPRA Rules be harmonised with the KPPRA Act; to declare the impugned meeting dated 27.2.2017 and the award of the contract through direct contracting to NLC in respect of the said five projects as illegal and without lawful authority.

The projects included: Flyover at Warsak Road-Ring Road intersection; Level-Il flyover at GT Road and Ring Road intersection (Pir Zakoori flyover), Peshawar; Internal road rehabilitation projects in Peshawar city; Peshawar uplift programme; and, Flyovers at Jawad Chowk and Katlang Chowk, Mardan.

While Section 33 (1) of the KPPPRA Act provides that procuring entities shall resort to open competitive bidding as the preferred method of procurement, a proviso to Section 33 (2) provides certain exemptions from open bidding.

The said proviso states: `Provided that the procuring entities may exceptionally use other methods, including negotiations, in the following eventualities in accordance with the rules to cater for: (a) procurements of small value through petty purchase or through request for quotations; and (b) procurements through direct contracting in an emergency caused by nature or governments, for urgent requirements caused by unforeseeable events, single repeat order not exceeding fifteen percent of the original procurement, for considerations of inteIIectual property, if price is fixed by agovernment in the country or procurement from another procuring entity/public sector organisation within Pakistan.

Furthermore, Section 14 (2) of the Act provides that the government shall notify the exemption and publish the same for public consumption in the print media.

The bench observed that despite the initiation of the approval for the projects by the secretary Communication and Works Department, the Peshawar Development Authority (PDA) was made the procuring entity. The bench further observed that the PDA was made procuring entity for projects outside the territorial limits of Peshawar and in the instant case for a project in Mardan district.

It was observed that the sanction of the five projects by the provincial cabinet was obtained after the chief minister had approved the same and that too during the pendency of the instant petition. Another anomaly pointed out by the bench was that the negotiated rates approved for the five projects awarded to NLC were beyond the government-approved Market Rate Schedule (MRS) of 2016.

The bench observed that reasons for the direct sourcing of the five projects to NLC required to be published under section 14 (2) of the KAPPRA Act had not been complied with. The bench declared that PDA could not be a procuring entity for a project in Mardan district.

The court directed that in case the government intends to grant the five projects through direct sourcing, the objecting note of the secretary finance duly endorsed by the chief secretary of the province, both dated Nov 16, 2016, have to be placed before the cabinet, while deliberating on its approval under the enabling provisions of the KAPPRA Act.

Legal experts believe that the instant judgment would serve as guidelines for the provincial government while awarding direct contracts to government entities and help enhance transparency in award of contracts of mega projects.