KARACHI, Aug 21: The city government’s decision to sell garbage to a private sector cement firm for production of electricity without inviting companies to tender for the contract and obtaining permission from the city council has raised serious questions about the transparency of the deal and environmental suitability of the project.
According to the agreement between the city government’s enterprise and investment promotion department and the cement firm, the city government will earn less than half the money it was going to get earlier, Dawn has learnt.
Moreover, the agreement was arrived upon without the requisite process of inviting tenders, publicising the matter through the press to get competitive offers and the city council’s approval was not obtained — points that were raised by the leader of the opposition in the City Council, Saeed Ghani.
Highly-placed sources said that the E&IP department has agreed to sell 3,000 tonnes of garbage, which is normally handled by the Municipal Services Department, to the cement firm every day, at a price of Rs230 per tonne. This would earn the city government around Rs700 million annually. However, according to an E&IP executive district officer’s own admission, the initially agreed-upon price was Rs500 per tonne but issues emerged over a certain clause in the agreement and in order to settle matters amicably, the city government reassessed and lowered the price to Rs230 per tonne.
Meanwhile, the city government also earlier awarded the Chinese company M/s Shanghai Shengong Environmental Protection Company Ltd a contract to collect roughly 8,000 tonnes of garbage from the city every day, and take it to landfill sites. While it has not started operations yet, no permission or NOC has been obtained from it regarding the E&IP department’s sale of garbage to the cement firm. Perhaps having got wind of the E&IP department’s move, M/s Shanghai Shengong has also approached the city government to say that it planned to initiate operations from September.
The relevant city government official, however, maintained that he acted within the rules and that he had the powers required to sell the commodity.
‘Sale price was halved’
The city government’s EDO (E&IP), Dr Shahab Imam, confirmed that an agreement had been signed with Lucky Cement over the sale of 3,000 tonnes of garbage every day at the price of Rs230 per tonne.
He claimed that the law did not require tenders to be issued for the sale of garbage and neither did it require publication through newspapers or the approval/permission of the city council. He pointed out, however, that the city government expected to earn roughly Rs700 million annually from the deal.
According to Dr Imam, Lucky Cement’s Super Highway factory will use the garbage as fuel in its power generating unit, using German technology. The unit currently uses coal for fuel.
Originally an officer of the Customs group, Dr Imam conceded that under the earlier agreement, the garbage was the property of the Chinese company and said that while no permission or NOC had been obtained from it yet, this would be acquired shortly.
He further confirmed that an earlier rate of Rs500 per tonne had been agreed upon with Lucky Cement. “However, issues emerged over a clause in the agreement and the city government reduced the price to Rs230 per tonne,” he explained. “The plant will hopefully start taking the garbage from June next year.”
When approached by Dawn, the city government’s EDO Municipal Services Masood Alam said that he was not aware of the sale of the garbage to the cement plant. He confirmed that garbage was usually dealt with by his department, and that the city government had signed a contract with the Chinese company allowing it to collect garbage and transport it to landfill sites. “The company has informed the city government that it plans to start operations from September,” said Mr Alam. “As for any deal with the cement factory, I have no knowledge of the issue and cannot therefore comment upon it.”
City Council bypassed
The matter has also caught the attention of Saeed Ghani, the leader of the opposition in the City Council, who criticised the city government for selling the commodity without inviting tenders or publicising the matter.
Arguing that even the invitation of tenders ought to have been preceded by a debate in the City Council, Mr Ghani pointed out that the city government was paying the Chinese company $20 to handle each tonne of garbage, but selling it for a mere Rs230 per tonne. “Had the issue been brought up for debate in the City Council, it may have been possible to devise a system through which the $20 could have been saved or, at least, the per tonne cost being paid in dollars could have been brought down,” he said.
Criticising the city government for bypassing the City Council, he added that the same thing was done when the contract was awarded to the Chinese company – the issue was brought before the council well after the agreement was signed. “Furthermore, the fact that the price was reduced to less than half for the cement factory raises questions about why favours were extended to a commercial party at the cost of Karachi’s citizenry,” said Mr Ghani. “Selling something that one does not own amounts to fraud. The city government sold the garbage earlier to the Chinese company and then, without getting its approval or permission, the commodity was sold to the cement plant.”
Mr Ghani said that he would definitely raise the issue at the City Council’s next meeting.
Meanwhile, the director-general of the Sindh Environmental Protection Agency told Dawn that if the cement plant intended to change the fuel it used to generate power, an environmental study – the Initial Environment Examination – would be required since the nature of the emissions and their impact on the environment would change. The results of this study could raise the need for a more detailed Environmental Impact Assessment. However, said Dr Mohammed Ali Shaikh, SEPA had not so far been approached by Lucky Cement for any permission or an NOC in this regard, which ought to have been obtained earlier.
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