The committee rejected the decision of a government review panel formed under the PPR 2003 that had asked the Power Development Board (PDB) to disqualify the flawed bid of Chinese company Harbin and negotiate with the two other bidders on the basis of their lowest price offers.

The PPR 2003 says that if a bidder has doubts about transparency in a tender process, it may make formal complaints to a government review panel. The decision of that panel will be final, the PPR says.

But the cabinet committee's decision ignored the PPR and upheld the power ministry's claim that the review panel's scrutiny is flawed and that the panel has no right to pass a judgement on a ministry's affairs. All the committee members yesterday shared the same view.

Emerging from the meeting yesterday, Chairman of the committee Finance Minister M Saifur Rahman told newsmen, "We have reviewed the report of the independent review panel, which was not proper. The purchase committee has rejected the report. The company that got the deal will do it for Tk 86 crore less than the nearest bidder. Why should we pay more?"

Some government officials and power industry insiders said the cabinet committee's decision proved the PPR 2003 is 'ineffective'. This was the first review panel decision under the PPR and probably this will also be the last one, they added.

"No aggrieved bidder will ever want to file a review case by depositing Tk five lakh to the government under the PPR to see that it has no effect," one official pointed out.

Another official wondered how the cabinet committee has approved such a grossly flawed deal. "This will one day lead to an anti-corruption case against each of the officials and businessmen involved in the power project."

Designed to resist corruption in public procurement, the PPR was set to become a law last year but it was stopped at the cabinet level as all its members except Saifur Rahman resisted it. The cabinet members fear that once the PPR turns into a law, they will not be able to raise their 'election funds' in the name of development projects, sources said.

A number of bureaucrats involved in shady infrastructure procurement are also against the PPR, officially arguing that this regulation prioritises transparency over procurement.

Back in November, the World Bank, which was hammering on the PPR and its enactment as a law, had said it wanted to see the government abide by the first ever decision of the review panel for the sake of transparency.

Government's handling

of Harbin

Harbin's flawed bid had no technical offer although it had made a price offer of $41 million, which the PDB termed the lowest bid.

The review panel under the Central Procurement Technical Unit of the Implementation Monitoring Evaluation Department (IMED) found the PDB's acceptance of such a bid highly irregular as the price offer was made against a "phantom technical offer and did not deserve any evaluation."

Official sources said that during the October review of the Chandpur tender, the three-member IMED panel headed by former law secretary Mohammad Asaduzzaman received informal calls from Harbin's business lobby. They were later put under pressure to refrain from announcing the Harbin bid invalid.

Amid such a situation, the panel in its verdict said, "With the given option to choose between the rules and regulations and apparent financial benefit shown in arithmetic that may be derived by accepting an irregular tender, the PPR Review panel has no hesitation in upholding the law of the land and classify the HPE offer... as informal and void."

The PDB had previously awarded two bids to this inexperienced company. Harbin's first venture-- 80 MW Tongi power plant --is technically flawed and it has not operated well in the last nine months.

In its second deal for the 90 MW Fenchuganj plant, Harbin got exceptional treatment from the cabinet purchase committee that gave it around Tk 50 crore or 10 percent advance down payment for implementing the project. The government had restricted such down payments from 2003, and Harbin is the lone exception in this regard.

The business lobby behind Harbin admitted to The Daily Star they spent huge money after a section of officials, including those in the PDB and the power ministry, and also some policymakers and influential politicians at the 'alternative centre of power' of the government.

The lobby also claimed that officials, and not policymakers, generally create all the hitches in a tender process. "As officials keep on changing posts, you pay a policymaker because he is there for a certain term," said one of the top lobbyists.

Both the Chandpur and Fenchuganj tender processes generated complaints about the PDB's bias for Harbin but no action was taken.

State Minister for Power Iqbal Hasan Mahmud at a roundtable on October 31 last had attributed the review panel's complaint about Chandpur project to the PDB's 'minor negligence'.

At the same forum, Secretary for Power MM Nasiruddin had asked whether it was justified to 'sacrifice' procurement in the 'name of transparency'.