TI alleges PIA agreed to violating PPRA rules

With reference to the allegations of violation of Public Procurement Rules 2004 by Pakistan International Airlines in procurement of two Boeing 777 aircraft on lease, the Transparency International Pakistan has alleged that the management of PIA had agreed to its allegations submitted with the Supreme Court of Pakistan that PPRA Rule 10 of the Public Procurement Rules 2004 did not allow mentioning of brand names in tender specifications.
“The TI-Pakistan has not received a reply from PIA to its comments dated August 15, 2012, but has noted the press release of PIA published in newspapers on August 18, 2012. We are grateful to PIA as by issuing this clarification in the press, PIA has agreed with the TIP’s comments submitted in the Supreme Court that PPRA Rule 10 of the Public Procurement Rules 2004 does not allow mentioning of brands names in tender specifications,” TIP adviser Adil Gilani said in a letter sent to the chairman and CEO of the Pakistan International Airlines.
PPR Rule No 10 Specifications say, “Specifications shall allow the widest possible competition and shall not favor any single contractor or supplier nor put others at a disadvantage. Specifications shall be generic and shall not include references to brand names, model numbers, catalogue numbers or similar classifications.”
PIA’s clarification dated August 18 said, “The TIP earlier blamed PIA for specifying brand names for the Boeing 737-800 aircraft. The same was very much in line with the PPRA Rules as the same type of aircraft is already being operated by PIA in its fleet. Induction of the same type of aircraft results in huge savings in terms of cabin and cockpit crew, maintenance engineers and spare parts commonality. Now again TIP is accusing PIA for not specifying Engine Brands and may acquire B777 aircraft with Pratt and Whitney instead of GE Engines. Such strange logic of TIP on specifying brand names is beyond understanding. PIA did not specify the brand name of the engines and would be acquiring aircraft with lowest cost to PIA.”
The TIP adviser argued how could PIA claim that “Boeing 777-800” was not a brand name, and that PPRA allowed PIA for only leasing of only “Boeing 777-800”, whereas PIA itself had now admitted in August 18 press report that stating that PIA did not name the engines (i.e. GE Engine) was not allowed under PPRA as it was a brand name.
“Kindly note that PIA does not have any discretion to circumvent PPRA Rules in same tender, by using two different criteria for use of brand names and not use of brand names,” Gilani said.
In its letter dated August 15, 2012, the TIP had pointed out that PIA was in fact circumventing PPRA Rules as it deemed fit for PIA manipulation. “Press release of August 18 also confirms that PIA’s reason that it had opted for Boeing aircraft because was presently operating Boeing 777-800, (another false statements as PIA dos not have any 777-800, but it has only Boeing 777-200, 777-200ER and 777-300 ER), and the PIA will have savings in terms of cabin and cockpit crew, maintenance engineers and spare parts commonality, and that any additional crew requirement will be easy to fulfill due to availability of trained instructors,” added the letter.
“But the matter of fact is that PIA has trained engineers and spare parts for General Electric GE 90 Engines, and not for Pratt & Whitney 400 engines. In case of this procumbent, PIA therefore will have to spend extra funds to get their engineers trained on Pratt & Whitney 400 engines and also buy and keep enough additional spares for Pratt & Whitney 400 engines, as each Engine costs approximately US $ 25 million.”
“And this is a contradictory situation, as the PIA is going for lease of only Boeing Aircrafts, and not considering Airbus, as 12 Airbus A310-300 aircraft are reported to be in PIA fleet, which are equivalent to Boring 777-800,” he added.
Gilani reiterated that the TIP stood by its statement that PIA had made a wrong statement in the Supreme Court that mentioning of the B-737 aircraft was, therefore, covered under the relevant clauses of PPRA rules, and that use of any brand name was not allowed under Rule No 10, and the Supreme Court had to adjudicate the HR Case No 49143 – S/2011.
He also forwarded copies of his letter to the Public Accounts Committee chairman, the NAB chairman, the Supreme Court registrar, in Human Rights Case No 49143 – S/2011, the Ministry of Defense secretary, the PPRA MD and the PIA board members.