ISLAMABAD: In a tug of war among the water resources ministry, the regulator and the contractors, a multi-million dollar foreign-funded project planned to overcome inter-provincial distrust over water distribution and theft is lying in the doldrums.

As a result, a multilateral lending agency has concluded to cancel its financial assistance committed to the project as ‘misprocurement’. The project was taken in hand on the orders of the prime minister following a unanimous decision of the Council of Common Interests to address all future complaints by the provinces about water theft and mismanagement.

The government had arranged a $35 million soft loan from the World Bank for additional financing of the Water Sector Capacity Building and Advisory Services Project. A major part of this credit was earmarked for hydraulic calibration of 17 key sites and automation of discharge monitoring of all sites — commonly called as telemetry system. Interestingly, a similar project completed at a cost of over Rs350 million in 2005 was scrapped owing to similar disputes and technical hitches.

A probe body, appointed by the water resources secretary under directives of the prime minister, has blamed the members of the Indus River System Authority (Irsa) for destroying a multi-million dollar telemetry project planned to overcome inter-provincial distrust over water shares and distributions.

The ministry of water resources has withdrawn the project from Irsa and transferred it for implementation to the Water and Power Development Authority (Wapda) that had previously got the same project installed that could not take off. For a change, the ministry has now directed Irsa that the project be executed by Wapda as ‘deposit work’ sponsored by Irsa and all its members should be involved in the supervision of the Wapda’s deposit work (as contractor) and make payments to Wapda on satisfactory takeover. In the meanwhile develop technical team to take over the project on completion to avoid repeat of 2006-07 failures.

World Bank decides to cancel financial assistance

Irsa members have on the other hand blamed the senior most officers of the water resources ministry for conflict of interest in derailing the project through one-sided briefings to the prime minister and blaming one of them for jeopardising the project right at the time of its contract so that it could be given to second bidder the National Engineering Services Pakistan (Nespak). They denied to have any opposition to the project and said they had in fact proposed to address misgivings over water distribution.

The water resources ministry officials accused by Irsa, on the other hand, said the major issue was the capacity constraints of the regulator. They said the email purportedly derailing the project was a routine final check before the contract is awarded was by no means binding on Irsa. However, the unanimous decision by Irsa showed the deficiencies highlighted were genuine and the regulator had failed throughout the process to notice them. “That shows their capacity,” they said, adding that the regulator had also put on record that this was a “blessing in disguise” otherwise “Irsa would have again wasted public exchequer’s money”.

Documents seen by Dawn and confirmed by the ministry and Irsa suggest that the project veered off the track just before the regulator was set to award the contract for consultancy services to a contractor — MM Pakistan — in June 2019 after a lengthy procurement process beginning in September 2018 under the World Bank guidelines. The second-ranked bidder was Nespak.

Interesting developments followed. During the second round of contract negotiations with MM Pakistan, team leader of the project, who had remained with the bid evaluation committee that ranked MM Pakistan as the top consultant, in an email asked Irsa to certify the expertise of key experts and performance of the contractor. It was pointed out that contractor’s staff was not qualified for the project.

Given the veracity, the five-member Irsa concluded after cross checking from the top bidder and the Punjab government where the bidder had related projects executed that telemetry project consultancy could not be awarded to MM Pakistan for major shortfalls.

The regulator has put on record that procurement specialist of the project reported to an Irsa meeting that a senior World Bank official had advised that after cancellation of existing process of bidding further line of action of rebidding will be initiated. Irsa, therefore, “decided with consensus to go for re-bidding” and requested the World Bank to issue a no-objection letter for rebidding.

However, the World Bank noted that only two legitimate courses of action exist. The contract be awarded to MMP with the condition to ensure adequately experienced staff and supervise the project closely. In case Irsa felt that the risk of poor outcome was too high, the process be cancelled entirely and bank would drop this activity from the loan as “misprocurement”.

As a result on December 31, 2009, the water resources ministry directed the regulator to develop the project from its own resources. Irsa prepared the project afresh in consultation with the ministries of finance, planning and water resources and called a meeting on April 30 this year for its formal approval and to begin the contract process. On April 24, the water resource ministry ordered that project be executed by Wapda.

An inquiry committee comprising senior officials of the flood commission, Wapda and water resources ministry found faults with shortlisting of consultants but also noted that the project team leader who raised questions was also part of the evaluation committee earlier. The inquiry committee noted that Irsa not only lacked capacity to handle the project procurement and contracting, its members were also opposed to the project and the authority lacked technical staff to maintain the telemetry system.

Published in Dawn, May 11th, 2020