Reference certain observations made by the Competition Commission of Pakistan (CCP) in its recent study on road construction sector in Pakistan, and reported in a section of media, the National Highway Authority (NHA) would like to offer the following clarifications regarding bidding process of CPEC projects, which were not covered in the subject study.
NHA works under the Ministry of Communications, and being a government entity, essentially follow rules & regulations laid down by PPRA and Pakistan Engineering Council (PEC) for all projects financed through Government of Pakistan funding. However, for the projects implemented under foreign funding and government to government concessional loans, the bidding process is followed as per the requirements of the donor agencies, agreed in advance by the Government of Pakistan at the time of loan signing agreements. Multilateral Development Banks such as Asian Development Bank (ADB), World Bank (WB), IDB etc drive their financial resources from various countries, and therefore only partner countries contractors can participate.
However, when concessional loans are signed by the Government with a single country such as China, Korea or Japan, the donor agency of that country, most likely Export Import Banks (EXIM Banks) levy restricted bidding environment, specifically to contractors of that country. It is a standard international practice. In case of Peoples Republic of China, only State-owned Companies, that too, nominated by the Government of China can bid in the lender Country. The same situation happened in CPEC Projects, where Pakistani contractors could not participate. However, a large number of local contractors were hired by Chinese companies to sublet part of their works, which not only helped them out financially, but the transfer of technology also occurred.
ALHAMDULILLAH the highway projects under CPEC are going ahead of their planned schedule and well within the approved budget and PC-1 costs, following strict quality control under the supervision of International Experts.
The China Pakistan Economic Corridor (CPEC) is a game changer bearing immense importance for the future economy of Pakistan and such misplaced criticism may not only damage its credibility but also shatter the investor’s confidence. Had the necessary input, either from NHA or EAD been obtained before finalizing the study, the ensuing confusion and misunderstanding could have easily been avoided.