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Bahria Town cannot be awarded PQA contract: TI Pakistan

The illegal draft Letter of Intent (LoI) proposed to be issued to Bahria Town, who is a defaulter, can not be awarded PQA contract for the development of the Diamond Bar Island City (Bundal & Buddo Island) on the PQA waterfront (the “Project”).

Adviser, Transparency International Pakistan, Syed Adil Gilani in a letter sent to the Chairman, Port Qasim Authority (PQA), Vice-Admiral Muhammd Shafi (Retd) on February 25 has invited his attention to Transparency International Pakistan’s letters dated February 18, 2013 and April 6, 2012, informing PQA about the alleged irregularities committed in April 2012, while pre-qualifying firms by PQA itself, and in February 2013, while considering to award the development of the Diamond Bar Island City (Bundal & Buddo Islands) on the PQA waterfront (the “Project”) to a company which has been declared by three Statuary/Regulatory authorities namely, Federal Tax Ombudsman, Security Exchange Commission of Pakistan (SECP) and Lahore Development Authority, as cheat and fraud.

On February 21, Transparency International Pakistan informed the Secretary Ports & Shipping in a letter addressed to SECP that Bahria Town was lying about signing an “agreement” as reported that Pakistani construction tycoon signed a multibillion dollar deal with Abu Dhabi Group to build the world’s tallest building in Karachi and that Malik Riaz, founder and chairman of Bahria Town, one of Asia’s largest private real estate developer, signed a $45 billion deal with the Abu Dhabi-based investment company. And that it is merely a conditional “MoU”, which has no legal value, and like so many other MoUs in the past, this may also be seeing the dust of a dustbin sooner.

It turned out that the Abu Dhabi Group and the UAE government was aghast at the development and the MoU was cancelled by them. The real facts were disclosed by the Chairman of Abu Dhabi Group through advertising in Pakistan newspapers on Friday, February 22, 2013, in which it was stated that “in order to clarify matters, it should be stated for the record that a non-binding MoU was entered into by Dhabi Contracting Establishment, a business unit based in Abu Dhabi, which is wholly owned by Sheikh Nahayan Mabarak Al Nahayan, and not by the Abu Dhabi Group. The MoU was simply an indication of interest by Dhabi Contracting to cooperate with Bahria Town Pakistan (Pvt) Ltd to provide technical support and assistance to the project – as and when if appropriate commercial terms and conditions were agreed. “It must be stated clearly and unequivocally that neither Sheikh Nahayan, the Abu Dhabi Group, Dhabi Contracting nor any other related party have undertaken or assumed any financial obligation or commitment to invest in this project and that there is no agreement to do so. “It is also unfortunate that discussions between the parties could not reach any conclusion and the MoU has been cancelled”.

Again on Sunday, February 24, 2013, the State Bank of Pakistan and SECP have in a press advertisement issued warning public to beware and not mislead by fraudulent activities/ schemes of deposit, loan, investment etc through advertisement in print and electronic media, which includes real estate schemes/projects soliciting investors to purchase properties (usually existing on paper only) in Pakistan by promising high gains.

Due to the above defaults of Bahria Town, and the company being declared as cheater by SECP on a CDA Project Margala Enclave, which was on paper only and by Lahore Development Authority on Bahria Town Lahore Sector D E &F and Safari Town, SBP and SECP that “offer sounds too good to be true, it may be fraud”, that companies who indulged in schemes/project and existing on paper only, are fraudulent companies.

The proven track record quoted above, and the 36 ongoing litigations only in the Supreme Court against Bahria Town, renders the company to be disqualified for any project by PQA, and therefore any LoI or LoA if issued by PQA to Bahria Town for development of the Diamond Bar Island City is deemed to be illegal, which may jeopardise PQA interest against future claims from Bahria Town.

TI-Pakistan has requested PQA to provide following documents for its review in view of the reported shortcomings in the bid of Bahria Town JV non-responsive and against the tendered conditions, and being declared by PQA, in violations of tendered conditions, as a single bidder: 1. Detailed technical & financial evaluation report, conditional, 2. Draft Letter of Award/Intent made by consultants, 3. The Draft letter of Award/Intent amended by PQA, and 4. The letter issued to PQA by the Secretary Ports & Shipping with objections on the award process.

Transparency International Pakistan, Adil Gilani said, is striving to have transparency in procedures and Rule of Law in Pakistan, which is the only way to eliminate corruption and have good governance in the country. Copies of the letter have been forwarded for action to be taken under the rules and regulations to: Chairman Public Accounts Committee, Islamabad; Chairman NAB, Islamabad; Federal Tax Ombudsman, Islamabad; Dr Khawar Jamil, Federal Secretary, Ports & Shipping, Islamabad; Chairman, SECP, Islamabad with the remarks that no action has been taken by SECP against Bahria Town since last four months within its own law, and SBP compelled SECP to jointly warn the public to beware of such frauds; Registrar, Supreme Court of Pakistan, Islamabad, Governor SBP, Karachi, MD, PPRA, Islamabad, Board of PQA Members, Karachi, and Chairman KPT, Karachi with the advise not to qualify Bahria Town in any KPT Projects.

Bahria Town cannot be awarded PQA contract: TI Pakistan
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Bahria Town cannot be awarded PQA contract: TI Pakistan
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