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THERE is no escaping the impression that a powerful conflict of interest is at play when a government contract is awarded to a company in which a sitting cabinet member and his family have ownership stakes.
Abdul Razak Dawood may not be a federal minister — technically speaking, he holds the portfolio of adviser to the prime minister on commerce — but the fact that he has close proximity to the prime minister, sits in cabinet meetings, and wields ministerial authority cannot be missed.
It may also be the case that, before entering into this position, he ‘resigned’ from all offices he held in Descon, the company that has just been awarded the mega contract for Mohmand dam, and, as his own office has tried to clarify, “totally distanced himself” from his business interests.
But the point at issue is his ownership stakes in the company, as well as stakes owned by his family members.
Until that point is robustly addressed, the impression of a deep conflict of interest and inappropriate award of contract will continue to hold the field, no matter how many denials come from all quarters of government.
There is no doubt, however, that Descon is a company uniquely suited to execute such a contract. It has deep experience in the work of dams and heavy engineering.
But acknowledgement of this fact does not negate the impression that a conflict of interest has arisen. Descon might be an accomplished company, but it is a commercial enterprise.
The clarification issued by the adviser’s office did little to answer the questions about his ownership of the company. Pointing out that Mr Dawood had ‘disclosed’ his ownership of the company to the prime minister, as well as the fact that it was in the bidding for this contract prior to his appointment, does not make everything alright.
The statement gives the impression that the prime minister has now become party to a conflict of interest, especially since the clarification goes on to say that the prime minister, after knowing all the facts, “made a strong plea for the services” of Mr Dawood.
If this is true, it runs contrary to promises made repeatedly by the prime minister that conflicts of interest would be scrupulously avoided under his leadership.
Scruples and ethics are the cornerstone of this government’s claim to legitimacy. It should not be seen to be cutting corners here.
Published in Dawn, January 4th, 2019
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Comments (90) Closed
Jan 04, 2019 08:28am
Right on.
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Jan 04, 2019 08:46am
It would have been better if you suggest a solution. I think PAC may be invited to examine the awarding of this contract.
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Jan 04, 2019 09:15am
What happened to Imran Khan's pre-election understanding of "conflict of interest?"
Visiting Rumi in Konya and yet but not following Rumi in actions! Indeed, man is at loss!
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Jan 04, 2019 09:23am
no conflict of interest as the company had won the contract before this government or Abdul Razaq Daud was adviser. So do not try to taint something which is not tainted just to score points. We have seen where this has taken us in the case of Reko Diq.
Descon won the contract fair and square. No matter if Abdul razaq daud had been as advisor or not, if his company had won the contract you would have said that since he is close to Imran khan he has got the contract. So no need to worry and lets go with the construction of the Dam.
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Jan 04, 2019 09:27am
The perception of a conflict of interest is just as bad as actual conflict of interest. Mr. Dawood should not have accepted the advisor role and the PM should not have appointed him given he was informed. The main thing going for PTI is its integrity and without it not much differentiates it from other political parties that have ruled Pakistan.
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Jan 04, 2019 09:28am
This is a suffix to suggest as you wote in your editorial that ' There is no doubt, however, that Descon is a company uniquely suite to execute such a contract, don't go into the conflict of interest issues as something good for the country is happening after years of delays.
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Jan 04, 2019 10:03am
Descon is not just uniquely qualified but the most qualified for the project. i post this as someone who has had them as a client for more than a decade now.
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Jan 04, 2019 10:04am
It's PTI govt style anti corruption move. Can't be questioned. Nothing shady. All out in open to public eye.
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Jan 04, 2019 10:23am
IK must accept and own this mistake. It is a pure conflict of interest as Abdul Razak can influence the decision.
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Jan 04, 2019 10:25am
Such large mega projects are not awarded in one day. The time line is to be seen in the correct perspective.
Mr. Dawood may not in his wildest imagination even had an idea that he would be adviser to the PM when this contract will be awarded Dawn editors must assign a person to look into the entire time line of the activities needed to reach the award stage. This is to be done objectively and you will conclude that your opinion is based on some pre-conceived notions and not based on the realities of the procedures involved.
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Jan 04, 2019 10:36am
There is no end to such doubts. He is not directly involved I award of contract, so no such conflict
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Jan 04, 2019 10:58am
Extremely disappointed by the total irresponsibility shown by writers / columnists and others for what can only be assumed to be some unfulfilled want of sensationalism.
1. Mr. Razzaq Dawood's track record for honesty and high ethical standards speaks for itself.
2. DESCONS's track record for being one of the few stand out Pakistani companies which is regionally competitive and highly competent speaks for itself.
The writer does mention that there is no doubt about the 'deep experience' and capability of Descon.
Where then lies the problem? The only point worth raising would be to question the process of awarding the contract. If all the rules were followed, and the contract awarded to the competent company, then will snowflakes such as the writer show some decency and stop creating headlines where none exist.
Dont sensationalize and make it impossible for the few competent and well meaning people in this country to contribute towards its progress.
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Jan 04, 2019 11:00am
Not one dam, all construction should be awarded to descon
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Jan 04, 2019 11:29am
Dear Editor, I have been watching programmes on the subject since it came in the news, I feel sad & sorry that news papers, TV Channels & so called sodo experts sitting in these programmes hardly know the subject & also talk in the air without the knowledge regarding PPRA , PEC, Guide Lines & details related to conditions of contract & their legal conotations. These terms are clearly defined in PQ & Bidding Documents access to which is only to the bidding companies,Consultants & Authority(WAPDA) I would also suggest that such subjects be discussed with technical experts & than be brought in news papers & TV channels, Hope I have conveyed a balanced approach towards bringing such issues in Media, Regards
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Jan 04, 2019 11:34am
Commercial contracts cannot be annulled on political noise. The successful bidder (Gezhouba from China having 70% stakes in its JV with Descon which has 30% stakes) can take the Govt. to court and claim for damages. This will consume important time and a delayed project kick-off in addition to associated cost increases.
Plus I dont think there is any way in which Razzak Dawood can distance himself from Descon Engineering Limited, a company he built 41 years ago and made it Pakistan's biggest and most qualified contracting firm.
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Jan 04, 2019 11:35am
so DESCON should not any mega projects because there will always be a conflict of interest. so lets just ignore the fact that they are the best entity to undertake such a mega project with only 30 % share. no one is taking into account the 70 % share held by China Gezhouba.
stop making a mockery of urslves, let the project proceed. its in good hands. and for all those who are unaware of the bidding process, stop wasting everyone's time
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Jan 04, 2019 11:38am
@Dr Ansari, chairman WAPDA I believe is a very important position carrying a lot of responsibility. He has categorically stated that this contract was awarded before PTI Govt took over.
Secondly it's a joint venture, 70 % goes to Chinese firm & remaining 30% is to be shared by an American firm & Deacon.
Thirdly like all decent norms being followed in the West Razzak Dawood resigned from Deacon.
We are already 30 years behind in the construction of this dam. If a reputable Pakistani company can be a small part of this project providing jobs to Pakistanis & at the same time gaining valuable experience for future. Then they should be supported not ridiculed .
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Jan 04, 2019 11:47am
If the technical matters are discussed by politicians than such issues will keep propping up. Cancel the contract with DESCON which is at the moment on competent company in Pakistan, serving other countries like mid east and pay maybe 200% more.
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Jan 04, 2019 11:49am
If Descon got the contract on merit and the other company bidding has not challenged the bid result plus Mr. Dawood has taken the necessary legal steps to distance himself from the company.....it would appear that all is in order EXCEPT from a moral view point, keeping in mind all Imran Khan has said about of clash of interest for sitting leaders, this rings as decidedly wrong.
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Jan 04, 2019 11:55am
Perhaps the problem is not who and how the contract is awarded. The reality is what would PTI have thought if such a contract been awarded in the similar conditions when they were in opposition?
Secondly, we all always think more of a problem than solution.
It's a suggestion that keeping in mind the ability and repute of descon, contact must be kept on but the advisor must discharged from his government duties.
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Jan 04, 2019 12:48pm
Exactly. There is a conflict of interest. When someone wields considerable power is eying for a contract, it is natural that the competitors won't try for the same. Why they loose time a money for a futile excercise? Here it is obvious that the presence of Descon and its links to Mr. Dawood prevented a free bid.
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Jan 04, 2019 01:00pm
Descon has been a global leader in unfertaking civil engineering tasks. If it were an incompetent tainted org, conflict of interest would have taken precedence. Till that happens; I say make the Dam already. These excuses are meant for unnecessary delays. Imran may go down as the only leader after Ayub Khan to have had made dams an important part of internal policy...and his detractors will use every excuse to deter dam construction.
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Jan 04, 2019 01:04pm
Manage conflict of interest by completely restricting Mr.Dawood's involvement in all matters of this project.
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Jan 04, 2019 01:26pm
Conflict of interest must be rooted out from the country. However, it should not become a political weapon and the issue must be settled fairly, keeping in mind the fact that the bidding process of Descon started before PTI government came to power.
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Jan 04, 2019 01:28pm
@Waseem, A single successful bidder where bids are invited is automatically considered as a failed bid in other self-respecting countries. And what business did a temporary 90 day non-elected government put in place to merely hold elections have in making final decision on a project that will survive the full term of several elected governments.
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Jan 04, 2019 01:30pm
It is not always that, a person in Government is bending the rules for himself. he might be in order on all merits. Facts need to be unearthed and brought to the legal justice, instead of summarily rejection.
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Jan 04, 2019 01:36pm
@iftikhar saeed, time line doesn't matter, it's the end result that matters. First, was the negation of the bidding process by only one Company submitting a successful bid. The other one was rejected on technical grounds. That is "failed bidding" in any other jurisdiction.
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Jan 04, 2019 01:52pm
@Dr Ansari, I wonder why Razak Dawood doesn't resign from his position as advisor to the PM. PTI's integrity card is already soiled, but at least there is some saving grace in the resignation.
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Jan 04, 2019 02:07pm
Everyone is saying that Descon is the right company for the job, and it won the contract before this government. And Mr. Dawood is the right man for his job, though he resigned for the company and wasn't anywhere near government when the company won the contract. Since everything has been on merit until now, then rather than getting rid of a competent man or a competent company, and wasting years, what's the difficulty in appointing a committee to monitor any future dealing with this company for the duration of this contract?
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Jan 04, 2019 02:08pm
The is the litmus test for Imran Khan’s govt. Mr Dawood was awarded the contract of constructing a dam during Musharraf’s tenure when he had served as a federal minister. After making much noise about the CPEC contracts, Mr Razak Dawood is now going to benefit from a contract where a clear conflict of interest is present. Better sense should prevail and the Prime Minister should re-invite the bidding process. Business tycoons are only loyal to their own interests, not to any ideology or political party.
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Jan 04, 2019 02:47pm
There is clear conflict of interest . Descon not given contract by previous govt. Razak wants to make money while in govt
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Jan 04, 2019 02:49pm
@Waseem, "company had won the contract before this government or Abdul Razaq Daud was adviser". So why was it announced now, more than four months after Imran Khan took over? Something fishy here.
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Jan 04, 2019 02:58pm
Who i talking of conflict of interest, a man who headed the PIA and started Air Blue his private airline.
Government should go ahead, they want to stop the dam.
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Jan 04, 2019 02:58pm
@Waseem, There is a definite conflict of interest here; either he should do business or politics not both at the same time at peoples' expense!
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Jan 04, 2019 03:03pm
Conflict of Interest. PTI what is going on?
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Jan 04, 2019 03:05pm
@Qazi Rashid Manzoor, Mr Dawood ought to opt for one thing: politics or business!
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Jan 04, 2019 03:28pm
One thing is for sure - for the first time in history, FWO has been technically knocked out of a contract. And ironically, its the PPP (who calls PTI an establishment's stooge) crying foul. If only two consortiums were shortlisted and one (FWO and company) were knocked out because of lack of technical expertise to handle such a massive project, what do you think should have been done. Cancel the project completely? or award it to FWO at lower rate and then wait for cost escalations and delays in the project because of lack of expertise?
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Jan 04, 2019 03:35pm
What's the controversy here if Descon has been granted a contract on the basis of its experience and competence and not due to personal influence of Mr A R Daud. Yes there is only a point that an office bearer and advisor to PM should not own a private business and his assets should not increase during his period as part of the government.
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Jan 04, 2019 03:55pm
why should the prime minister be advocating ANYTHING? is he a civil works expert?
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Jan 04, 2019 04:54pm
corruption raises its head again . it is not conflict of interest . it is the merger of interest ,business interest and political conflict
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Jan 04, 2019 04:56pm
@MAD, then this answer itself is an example of conflict of interest Sir
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Jan 04, 2019 05:00pm
With such a clear conflict of interest Mr Dawood should not have taken up a post that directly influenced and will be the ministry responsible for overseeing and making executive decisions. He is privy to insider information and cannot be on both sides of the fence. He is also likely to benefit from all the wealth that he will re-takeover as soon as he is relieved of this office. Its scandalous that PM Imran was aware of it and offered him that post. Holding any honorary and substantive portfolio in the cabinet would be scandalous albeit a direct role criminal. Telling PM in his ear is also not enough he ought to have publicly informed of his conflict of interest and withdrawn from all stages. There is no option for him but to resign and face an inquiry into this. He has been critical and disruptive of our relationship with China and its not clear how much of that was to create pressure for his own gain. A supreme court action is likely to follow despite our urgent reservoir needs.
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Jan 04, 2019 05:03pm
govt should invite fresh international bids and restart the process . where is the SC .should take suo moto notice for that
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Jan 04, 2019 05:16pm
Well, this happened before the government came into power. We can safely assume that Dawood did not know that he will have a government post when his company took the contract. So this is not as much an issue as being made. He has been awarded advisory because of his experience with Descon. So if you say, there is a conflict of interest, then either we lose one of only few good pakistani companies i.e. Descon doing big projects for us or we lose his precious advise. I think he has done enough by resigning from Descon and the fact that he is only an advisor, not a minister also helps. So we can keep both of these things.
One thing your article does clarify is that the process of awarding wasn't influenced.
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Jan 04, 2019 05:35pm
Its a difficult one because I can see the conflict of interest but at the same time if DESCON is the best company to be able to take up this project then how do we decide? Maybe a third party should come in like an audit before the contract is given to the company?
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Jan 04, 2019 05:56pm
@Nabeel, The second company can also approach the court and then wapda and the consultants have to tell the truth about the disqualification.
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Jan 04, 2019 06:28pm
Dawood's Descon is one of the best in engineering in Pakistan
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Jan 04, 2019 06:51pm
A totally unethical adventure contrary to the trumpeted slogan of PTI to negate conflict of interest in commercial ventures, during their present stint in running the affairs of country honestly & beyond any doubt of shady financial complicity.
One gets dismayed by this sordid affair wherein the ruling party leadership is defending & clarifying this straightforward case of vested interest in play, through all kind of arguments holding no water.
In all fairness and following the international practice of construction management of mega projects in vogue, acceptance of an offer to build this multi billion dollar dam, should not have been accepted on a single tender. Rejection of this bid becomes more a necessity when there is stark display of conflict of interest.
Realistically speaking Mr. Dawood should not have accepted a political slot in the govt. or should have sold his assets in the company before joining as advisor to the PM. For sure this affair is going to hound & hurt PTI.
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Jan 04, 2019 07:04pm
All said and done, please propose a Pakistani company that comes half way close to the experience and performance of Descon in national and international engineering & construction achievements
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Jan 04, 2019 07:05pm
This argument makes no sense. Descon has the only capabile one to build the Dam, Dawood is an advisor. All above board. Just because this is the situation, so Descon should not get the job is silly.
Bring another Pakistani company of capbality that can do it, then give it to them, otherwise don't make a issue of a non issue. IK is to honest to indulge in favouritism, everyone knows it.
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Jan 04, 2019 07:06pm
@Dr Ansari, Ruminhasnseperate significance, Dam is for Pakistan betterment. Descon only company. Those who oppose, suggest another one.
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Jan 04, 2019 07:14pm
That the company is competent to execute such contracts has nothing to do with it.Its close association with an important member of the government is the issue.
.
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Jan 04, 2019 07:22pm
Dawood should resign as adviser because he can influence future policies helping DESCOM. No issue with awarding the contract.
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Jan 04, 2019 07:32pm
Have people gone mad ?! There is no conflict of interest as there is no other Pakistani company as uniquely suited to this job as Descon is . This a very professional company with international stature and without their participation the project would be 100% non Pakistani.
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Jan 04, 2019 07:53pm
Only criticism. Not a single solution has been offered in the article. The global practice for conflict of interest is to declare it at appropriate levels. It has been established that Mr. Dawood did declared such interest before taking charge of the advisor. It has also been established that Descon is well suited for such project given its experience in Pakistani market. I believe that the entire bid evaluation process should be audited by an independent agency to check that all the processes & SOPs were followed. There must be an independent agency involved in bid awarding process. A statement from such agency would also be able to satisfy the stakeholders.
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Jan 04, 2019 07:56pm
I think you understand what Descon and ARD has achieved not only for themselves but also for Pakistan. If you bring corporate people in government, they will have some kind of relationship with ongoing projects.
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Jan 04, 2019 08:20pm
@Farooq, Your comments makes no sense. The issue here is conflict of interest which irrespective of company’s credential, not being contested, makes it ineligible to this award of contract.
If the present govt. which is defending this questionable deal based on single tender and that too suffering from problem of conflict of interest issue, does not change course, this adventure may end up having similar fate as Gulpur 100 MW hydroelectric project on Poonch river in Kotli District of Azad Kashmir, with completion date of June 2017, remaining incomplete as of today, due to mismanagement by WAPDA in contract management practices.
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Jan 04, 2019 08:30pm
IK is a great PM and sincere with Pak but this is pure conflict of interest. He needs to address this issue.
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Jan 04, 2019 08:40pm
Though I'm still optimistic regarding current gov & PTI, however, the stance taken by PTI and Mr. Dawood's office is very disappointing. There is a clear COI here. It doesn't matter when the contract was awarded. COI do not arise only if rules are violated or in corruption cases, it arises when a person has ability to influence, irrespective of whether he influences it or not.
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Jan 04, 2019 08:46pm
Agree with the author of this article. Mr Dawood should resign with all the offices he currently holding in Descon. Am sure that he was not in the meeting in which the contract was discussed and decision made to award it Descon. In case he was a member of the contract reviewing or awarding committee he should also resign from his position as a Adviser tot the prime minister
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Jan 04, 2019 08:59pm
A conflict of interest evaporates if a proper disclosure was made before the award of contract.
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Jan 04, 2019 09:16pm
Even though Mr. Dawood has removed himself from the management of his companies and he was not the part of the committee, which awarded the contract for building the dam the optic is all wrong. Your criticism of Mr. the PTI government is correct. Still, your paper can be accused of double standards. Nawaz Sharif, Shebaz Sharif, Zardari and many other past ministers re remained active in the operation of their business and made decisions that directly profited them, but this paper did not find it objectionable if I recall correctly.
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Jan 04, 2019 09:51pm
Bring in investments, fix energy crisis, provide basic amenities, don’t bow under the pressure, fix health and education crisis, these are big goals but the government should focus on them, if they are successful nobody will listen to these people who are only talking so they remain visible.
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Jan 04, 2019 09:52pm
Build the dam, we need dams, leave everything aside.
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Jan 04, 2019 10:17pm
To hide one lie, hundred lies have to be spoken. How PTI walas defend indefensible is just, brilliant.
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Jan 04, 2019 10:24pm
Most important is what is in the contract! One should ask the government to publish the contract.
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Jan 04, 2019 10:30pm
@MG, only his name is enough to influence the decision.
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Jan 04, 2019 11:22pm
True that!
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Jan 04, 2019 11:54pm
@Shakir Lakhani, Ask whoever should have not announced it. Let go, make the dam.
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Jan 05, 2019 12:52am
If it is true that the the clarification goes on to say that the prime minister, after knowing all the facts, “made a strong plea for the services” of Mr Dawood, and also if it runs contrary to promises made repeatedly by the prime minister that conflicts of interest would be scrupulously avoided under his leadership, then it is a fit case for trial under article 62 (1) (f) of the Pakistan Constitution.
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Jan 05, 2019 02:01am
Not only Mr. Dawood and his family,.... but Mr. Imran Khsn and his family, and members of the PTI including Fawad Ch are all benefitting from this contract.
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Jan 05, 2019 02:51am
Govt get go and complete Dam Pakistan needs Dams.
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Jan 05, 2019 03:28am
@watchman, Yes. And the companies presently awarded the business will sit tight? They will fight back. There was no influence in awarding the contract. So it should go ahead immediately without any further delay.
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Jan 05, 2019 03:32am
@Amjad Durrani Engineer USA. , It is NOT based on a single tender.
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Jan 05, 2019 05:25am
@Hamed Quraishi , correct. Make it public.
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Jan 05, 2019 07:13am
I see no conflict of interest here due to the following reasons
1. Everyone agrees that Drescon is the best engineering company in the country and best sited to undrtake this kind of work.
2. Bidding process happened before PTI government.
3. Razak Dawood seines from his company before joining government.
Let's not play politics with dam building. Press have to be honest and fair
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Jan 05, 2019 08:40am
Spot on. I totally agree with the author.
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Jan 05, 2019 08:44am
@Waseem, No conflict of interest, as Descon won the contract in the previous government. But surely the owner would be incharge of the work the company does in this government. Means, he would be sitting on both sides of the fence. Maximize the profit on one side, and bang for the buck for the other side. These would be the two conflicting intersts. And one can easily deduct, which side is going to win.
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Jan 05, 2019 08:45am
If you are looking for fluff, it's this editorial. It adds no knowledge to the reader about Mr. Razak Dawood, Descon, the Chinese principal, bidding timeline, or a cogent argument as to whether there is a legitimate reason to raise a red flag about conflict of interest.
Rumor has it that Descon commands significant capability insofar as the design component of the project is concerned and its conduct over the last 40 years as one of Pakistan's premier private sector engineering firm is beyond reproach.
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Jan 05, 2019 09:07am
@Shakir Lakhani, It seems you have never worked with the government before. You do not have any idea how much time government departments take to finalize any contract.
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Jan 05, 2019 09:08am
@Samy, he is not doing any business now. He has distanced himself from the company before becoming adviser.
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Jan 05, 2019 09:10am
How many of you even understand what conflict of interest means in terms of these contracts.
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Jan 05, 2019 08:50pm
Get going on dam we need dams. Some has to be awarded. Some other bidders can come forward and beat the bid.
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Jan 05, 2019 09:52pm
Conflict of interest is not an issue for the locals of Mohmand. It maybe for the govt and opposition. Provision of safe water, royalty from net hydel profit, employment for youth under scale 15, water for their lands and provision of electricity on reasonable rate are the issues. Govt saying that they will provide enough water for Peshawar thats good but nothing for Mohmand where people buy one tanker of 1500 ltr on PKR 3500. Warsak dam which is also located in Mohmand tribal district and provide 600 megawatt to the national grid for the last 50 years but where its royalty going??? Nothing spent on its people. No water for the district, local people are displacing because of scarcity of water.
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Jan 05, 2019 10:04pm
Is this conflict of interest when its public knowledge?
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Jan 05, 2019 10:15pm
@Zak,
Interesting U-turn from your side
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Jan 05, 2019 10:38pm
Dear Editor, Descon is National company, not forein. So better to encourage their role as from executive, to engineer to finance, all contribute and learn ad well to build future dams. I cannot see other company in Pak to do this work better.
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Jan 06, 2019 08:16am
This editorial of DAWN has been rightfully trashed by the readers for valid reasons because it has been written from the editor heart feeling rather than using brain and true knowledge of the situation.
The editor also indicates arrogantly that despite all the good factors mentioned about DESCON, no clarification will make him change his mind ‘until‘.. and he does not say until what.
Mr. Dawood did the right thing, as required ethically and as is the norm, before accepting to get involved (if he did or not) by distancing himself from DESCON business activities.
Such kind of editorials must not create distrust and deprive nation of the benefits of good technical services wherever they come from. It is enlightening that the citizens are watching diligently.
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Jan 06, 2019 09:45am
"Conflict of interest" aside why does all articles related to the award of Mohmand dam conveniently ignores that the other bidder for this contract (that was technically disqualified) was a military engineering company "FWO"?
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Jan 07, 2019 04:59pm
@Hussain, To me its look like strong conflict of interest, why blame the author. It seems you are party to the debate.
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