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Pakistan waives off bidding condition for CPEC projects

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Pakistan waives off bidding condition for CPEC projects
By Shahbaz Rana
Published: June 14, 2016

ISLAMABAD: The government on Tuesday permanently waived off the condition of international competitive bidding in Chinese deals and approved to award the construction contract of Eastbay expressway to link Gwadar port with coastal highway to one of three Chinese bidders.

It also gave legal cover to gift four horses of high breed to royal families of Qatar and Saudi Arabia in a non-transparent manner. In its meeting, the Economic Coordination Committee (ECC) of the Cabinet approved the sale price formula of Re-gasified Liquefied Natural Gas (RNLG), passing on the cost of system’s inefficiencies and extra expenditures on import to the consumers. The ECC also allowed hand over of Heavy Mechanical Complex (HMC) to the military’s Strategic Plan Division (SPD), taking it from the Ministry of Industries.

Chinese railway company wins bid for Karachi-Lahore motorway

Headed by Finance Minister Ishaq Dar, the ECC made certain decisions that carry far-reaching implications for execution of the China Pakistan Economic Corridor (CPEC) in addition to setting the base for future RLNG-based projects.

The ECC, once for all, settled the issue of international competitive bidding in execution of the CPEC projects. It approved a report of a sub-committee, which establishes the federation’s authority to override Public Procurement Regulatory Authority (PPRA) Ordinance of 2002 in execution of strategic nature projects.

The subcommittee cited the Constitution’s Articles 90 and 99 that deal with exercising federation authority and conduct of business. The ECC allowed the Gwadar Port Authority to proceed with the procurement of one of the three listed Chinese Companies as well as preference for the use of the Chinese equipment, in accordance with the CPEC Framework Agreement, said the Finance Ministry.

The proposed 19km expressway will be constructed at an estimated cost of $140 million and connect the Gwadar Port with the Makran Coastal Highway, passing along the Eastbay of Gwadar city. Since China is providing interest free loan for the project, the contracts will be awarded in government-to-government mode, waiving off the condition of international competitive bidding. However, there will still be a competition among Chinese state-owned companies and Beijing has forwarded a set of three names.

The competition will be among China Communication Construction Company, China State Engineering Construction Company and CATIC Civil.

Govt’s tight pockets could hamper CPEC projects

Horses gift

The government approved a gift of four horses to the royal families of Qatar and Saudi Arabia in a dubious manner. Each of the royal families will get two horses of high breed.

The horses have already been exported after Finance Minister gave anticipatory approval, as chairperson of the ECC.

He asked the ECC to regularise and give ex-post facto approval. The government did not circulate the summary among the ECC members.

HMC

The ECC approved transfer of HMC to the Strategic Plan Division (SPD). The Pakistan Atomic Energy Commission will administer the HMC on behalf of the SPD.

The HMC, which manufactures high-end engineering goods, was highly mismanaged by the Ministry of Industries.

The ECC assured that the HMC’s employees would be fully protected. It approved Rs500 million to cover essential expenditure of the company and paying salaries till the end of this month.

RLNG price

The ECC approved sale price formula of RLNG, which passes every kind of cost under the roof to the consumers including cost of inefficiency and leakages.

The sale price will be worked out by adding up delivered ex-ship price of the LNG, port charges, Sindh Infrastructure Cess, Pakistan State Oil margin of 2.5%, all charges of LNG Services Agreement including capacity charges, utilisation charges and retainage charges.

The sale price cost will also include SSGC’s margin of $0.025/mmbtu, transmission losses up to 0.5% and distribution losses to be charged at the actual level.

$46 billion CPEC: Projects worth $30b already under way, says Ahsan Iqbal

Even the cost of laying any extra pipeline by the dedicated consumers will be made part of the sale price formula. For other consumers on distribution lines, an average Unaccounted For Gas (UFG) for the last financial year will be taken into determination.

The ECC directed that the price formula guidelines should be placed before Oil and Gas Regulatory Authority as policy guidelines.

Published in The Express Tribune, June 15th, 2016.

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The ECC approved transfer of HMC to the Strategic Plan Division (SPD). The Pakistan Atomic Energy Commission will administer the HMC on behalf of the SPD.

Good move indeed. Atomic Energy Commission would have have more access to heavy machinery and who knows we can start building our own reactors for power generation inside country. Atomic energy commision has the trained manpower with it who just needs more facilities like HMC. Next in line should be PMTF (Pakistan Machine Tool Factory) while TIP should be handed over to MOD as only they can not only revive it but due to its sensitive location its unwise to hand TIP to some private organisation.
 
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The government on Tuesday permanently waived off the condition of international competitive bidding in Chinese deals and approved to award the construction contract of Eastbay expressway to link Gwadar port with coastal highway to one of three Chinese bidders

@Tripoli @salarsikander see this and yesterday you were talking about we are negotiating with this and that. As far as I know CPEC money is loan(soft loan or whatever) not grant right? $10 Billion in roads rest in energy sector. Now since only one country can participate they can form a cartel and quote whatever price they want.

This happened even with coal block allocation in India when they all grouped up and bid accordingly later those found guilty were blocked and the blocks were put for bidding again. This cost very heavy on govts.

This is exactly what I was talking about. I am not talking about they "will" but they "can" and its purely from Pakistan's point of view, I think China's stand will be that they are right in doing so as they are providing money and I am not arguing its right or wrong.
 
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@Tripoli @salarsikander see this and yesterday you were talking about we are negotiating with this and that. As far as I know CPEC money is loan(soft loan or whatever) not grant right? $10 Billion in roads rest in energy sector. Now since only one country can participate they can form a cartel and quote whatever price they want.

This happened even with coal block allocation in India when they all grouped up and bid accordingly later those found guilty were blocked and the blocks were put for bidding again. This cost very heavy on govts.

This is exactly what I was talking about. I am not talking about they "will" but they "can" and its purely from Pakistan's point of view, I think China's stand will be that they are right in doing so as they are providing money and I am not arguing its right or wrong.

It's already a cartel. The 'used' thermal plants are coming in at twice the rate India manufactures them and the electric supply will be at 4 times the rate.

The bigger problem is, the Chinese companies will most likely bring in their own people for construction activities.

So it's like this-
Pak will take a loan to pay the Chinese to build infrastructure for them and then pay back the loans to the Chinese banks over 40 years or so. That's Pakistan paying them twice for a job that can be done for half the amount by Pak domestic companies. Of course, nobody else will give them such a large loan, so it's not a choice.

No wonder they haven't released important information.

An example, the Matiari Lahore transmission line which is a 660KV 4GW HVDC line is being built for $2.1B to a distance of 800Km. The Chinese built a similar line that was 1300Km long at $1.58B. India built a 800KV 6GW line to a distance of 1700Km for only $2B. It's obvious the prices for Pak have been inflated.

The early harvest plans can be built at half the rates by a Pak company too.
 
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i think it is still a good deal as no one will give 40 billion to anyone without milking the other party for good... China is taking enormous risks by lending Pakistan that kind of money in the mid of turmoil and they want to be rewarded for that kind of risk...Pakistan in turn is getting infra which i understand is very expensive however it is still better than no infra....and we need to keep in mind that it is a soft loan...so repaying wont hit them very hard!!
 
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Excellent step for Pakistan. In any case, it is not as if Pakistani taxpayers have put up the $46 billion dollars - Chinese are giving money to Pakistan and what's wrong if Chinese companies also benefit Absence of competitive bidding will mean decisions can be taken much faster and Pakistan will start reaping the benefits of the $46 billion in less than a decade. Positive for Pakistani economy I think.
 
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Just waiting for pro-government members to claim how great they have been in securing Chinese investment when it has mostly been an indirect loan.
 
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Excellent step for Pakistan. In any case, it is not as if Pakistani taxpayers have put up the $46 billion dollars - Chinese are giving money to Pakistan and what's wrong if Chinese companies also benefit Absence of competitive bidding will mean decisions can be taken much faster and Pakistan will start reaping the benefits of the $46 billion in less than a decade. Positive for Pakistani economy I think.

The hangover for this binge party is going to be quite the headache. For sure.
 
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@Tripoli @salarsikander see this and yesterday you were talking about we are negotiating with this and that. As far as I know CPEC money is loan(soft loan or whatever) not grant right? $10 Billion in roads rest in energy sector. Now since only one country can participate they can form a cartel and quote whatever price they want.

This happened even with coal block allocation in India when they all grouped up and bid accordingly later those found guilty were blocked and the blocks were put for bidding again. This cost very heavy on govts.

This is exactly what I was talking about. I am not talking about they "will" but they "can" and its purely from Pakistan's point of view, I think China's stand will be that they are right in doing so as they are providing money and I am not arguing its right or wrong.
Hi,

Ofc they have the right to after all, No one is willing to invest a billion dollar on us !. What we are more interested in is the spin-off the projects
 
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Hi,

Ofc they have the right to after all, No one is willing to invest a billion dollar on us !. What we are more interested in is the spin-off the projects

You know whats going on and you are still not worried? Strange! I got freaked out, joined protests that played important part in dismantling that time Congress govt. I went 400 Km to join those protests right in Delhi cuz I felt my country was being ripped off by a political party. When I returned I collected my friends, some juniors and made a group and chocked the road cuz Police arrested an honest person protesting against corruption right from house where he didnt break any rule. I was in college that time.

I clearly remember how much India was boiling, every small city to big was protesting and here you are ripped off in large scale and instead of being worried you people are celebrating it!!!! Its mind boggling.

I understand there were not much options but do you really need $46 Billion loan? There are many countries that goes thru hardships, none make these kind of deals specially when they are already so much under debt.

O man, that strategic depth is proving to be too costly now! I hope you people see it from a broader prospective, its never too late to build bridges. Rajiv Gandhi approved creating LTTE for this same strategic depth kind of logic, it proved very costly for us, not monetarily but like a constant headache, took decades to clean it up. I dont know when will you people start cleaning up.
 
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You know whats going on and you are still not worried? Strange! I got freaked out, joined protests that played important part in dismantling that time Congress govt. I went 400 Km to join those protests right in Delhi cuz I felt my country was being ripped off by a political party. When I returned I collected my friends, some juniors and made a group and chocked to road cuz Police arrested an honest person protesting against corruption right from house where he didnt break any rule. I was in college that time.

I clearly remember how much India was boiling, every small city to big was protesting and here you are ripped off in large scale and instead of being worried you people are celebrating it!!!! Its mind boggling.

I understand there were not much options but do you really need $46 Billion loan? There are many countries that goes thru hardships, none make these kind of deals specially when they are already so much under debt.

O man, that strategic depth is proving to be too costly now! I hope you people see it from a broader prospective, its never too late to build bridges. Rajiv Gandhi approved creating LTTE for this same strategic depth kind of logic, it proved very costly for us, not monetarily but like a constant headache, took decades to clean it up. I dont know when will you people start cleaning up.
Sir,

As I mentioned before the sin-off by these projects is something to look forward to. Since, it will kick start the economy that has been plagued by corruption and terrorism. Wait till the egg hatches.

All that fire you are seeing around, all that noise that is being made. It all points to one thing.

I will refer to this famous quote

quote-if-everyone-likes-you-you-re-not-doing-it-right-bette-davis-133-46-19.jpg
 
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Sir,
As I mentioned before the sin-off by these projects is something to look forward to. Since, it will kick start the economy that has been plagued by corruption and terrorism. Wait till the egg hatches.

There is very very low transparency in those projects, hell even the most knowledgeble person on CPEC dont know how exactly money is coming and how its used, with this less transparency people wont feel accountable, good luck with those eggs though.


I can quote you exactly opposite quote said by some reputed person. Its your life and country mate, not quote or philosophy class. You pay taxes in everything you purchase, that money ain't come free, it take a lot of hard work. There will be riots in India if govt. panned out such deal, Modi or whoever the shit, however strong member he would have to go. Anyways I will leave you with that, I dont think there is any use of me speaking anything.
 
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how many Indians are crying about cpec in this thread?
lovely
 
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how many Indians are crying about cpec in this thread?
lovely
LOL. They have every right ! If our neighbours will not look out for us who will ? China the one who is ripping us off for the last 40 years :D
 
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why is there even a bid?? why isn't China just building CPEC it's self.


much more cheaper and efficient.


bureaucracy is bad
 
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