New fire snorkel given to KMC costs double to taxpayers: report

  • Project director claims price inflated due to hike in dollar prices
  • Rs 195 million extra paid to contractor than the price on Customs clearance documents 
  •  Govt could have saved Rs90 million in case of direct procurement
  • Contract given to local company which was blacklisted by Punjab government in 2009

Despite tall claims made by Sindh Chief Minister Syed Murad Ali Shah on occasion of handing over of a 104-metre fire snorkel to the Karachi Metropolitan Corporation (KMC) about three weeks ago, what still remains a disturbing fact is that the snorkel had cost the taxpayers as much as double the actual market price of it, a private media outlet reported on Tuesday.

Said to be one of the highest snorkels in the world and a much-needed apparatus to navigate fires in high-rise buildings in the city, the CM had said that it was procured for Rs495 million, despite the actual cost of the snorkel to be about Rs210 million.

Project Director Niaz Soomro, while talking to a private news channel stated that the government had given the contract, keeping the Punjab government’s procurement in mind.

“The only difference is the dollar rate, which was slightly higher when we placed the order and we also paid extra as two-year operational costs,” Soomro said.

Project Manager Khalid Masroor while seconding Soomro’s point of view, said that at least four or five vendors had bid for the contract, of which the contract was awarded to the bidder with the closest price to Punjab’s purchase. In this case, the winning bid was made by the same company that supplied the snorkel for Lahore.

However, neither of the officials managed to explain the discrepancies in the actual price of equipment, as invoiced by Bronto Skylift, and the amount paid for by the Sindh government.

The actual cost, according to the Customs clearance document, is around Rs210m. Even after adding the Customs duties and taxes costing around Rs90 million, about Rs195 million extra was paid to the contractor before the snorkel could come under the use of the government.

The Local Bodies Minister Saeed Ghani while talking to a private media channel said that he had asked from his department the price of the snorkel procured for Lahore. “My department’s officials told me that the snorkel for Lahore cost the same and was delivered at the same time as ours,” he said, claiming that each snorkel was tailor-made to the client’s specifications.

According to some media reports, even the duties and taxes could have been avoided altogether had the Sindh government imported the snorkel itself, without involving the middle-man under the Customs law’s chapter 44 and 99.

Soomro, however, maintained that the Sindh government does not have any sort of technical expertise to make such procurements, which is why they contracted them out.

“The same is the case in the construction of roads,” he justified. “If we had to operate this way, wouldn’t we make the roads ourselves too, instead of giving them to contractors?”

It is further said that Finnish the contract was eventually given to a local company named Meraj Limited, instead of a Finnish company which is known for not giving any kickbacks and commissions.

The Meraj Limited was blacklisted by the Punjab Emergency Service “on account of poor performance”. In an advisory, Punjab’s deputy director for procurement Dr Muhammad Yahya Butt had stated that the “firm had failed to fulfil her contractual obligations, supplied defective vehicles and delayed the repairs”.