Saaf Pani scam: NAB selectively proceeded against two accused

ISLAMABAD: The Lahore High Court (LHC) has ruled that it is prima facie established that NAB “mala fide” proceeded only against two directors of the Punjab Saaf Pani Company (PSPC), Eng Raja Qamarul Islam and Waseem Ajmal.

It also held that there was no violation of rules or allegation of corruption, commission or kickback against seven officials of the PSPC, including Pakistan Muslim League-Nawaz (PML-N) leader Qamarul Islam in awarding the contract for installation of filtration plants in Bahawalpur region.

A two-judge bench comprising Justice Malik Shahzad Ahmad Khan and Justice Mirza Viqas Rauf on January 30 granted bail to all these accused, arrested by the National Accountability Bureau (NAB) eight months back. Qamarul Islam, who was the PML-N candidate in two national and provincial constituencies of Rawalpindi in the July 25 general elections, was taken into custody by the anti-graft watchdog just a month before the polling.

“We have noted that there is absolutely no allegation against the petitioners that they received any commission, kickbacks, illegal gratification while awarding contract.

There is nothing on record that a single penny was paid to them or transferred in their accounts or in the accounts of their relatives or friends. Similarly, there is no allegation that any movable or immovable property was transferred in their names or the names of their relatives or friends,” said the just-released judgement, a copy of which is available with The News. It said that the accused did not commit any illegality in negotiating the price of bid with KSB pumps and its reduction immediately after the opening of the bids.

“We are unable to notice any material illegality or violation of rules/law on the subject. If for the sake of arguments, it is presumed that there was any procedural irregularity in the exercise of jurisdiction by the petitioners, even then the same does not amount to misuse of authority to constitute any offence under Section 9(a)” of the National Accountability Ordinance (NAO).

The main allegation against the accused was that they reduced the bid price of the contract from Rs1.14 billion to Rs989 million through post-bid negotiations with the KSB Pumps in order to adjust the bid price with engineering cost estimates of Rs995 million, the judgement noted. The KSB Pumps offered that if the numbers of plants is increased from 84 to 102, it will charge 20% less price of all the plants. This offer was placed before the BoDs, and all the directors unanimously accepted this offer and consequently the price of the plants was reduced.

The verdict said that there is no dispute that KSB Pumps was the lowest bidder and its financial bid of Rs1.14 billion immediately after the opening of the bid through post-bid negotiations got reduced to Rs989 million. The engineering cost estimate of the project was admittedly Rs995 million. It is also an admitted fact that under the relevant rules, the accused/Board of Directors (BoDs) of the PSPC were authorised under the rules to award contract at 4.5% higher amount than that cited in engineering cost estimate.

The verdict said that prima facie, all the proceedings in this case were taken in accordance with the law and rules on the subject; the contract was awarded after acceptance of the negotiated bid of KSB Pumps; and even the contract was signed with the prior approval of the BoDs in its meeting on May 18, 2016.

As many as nine directors, including CEO/director, namely, Waseem Ajmal Chaudhry, participated in it along with the five ex-officio directors. It was unanimously approved that additional 36 plants shall be installed without solar system. The BoDs also decided unanimously that the plants shall be built pre-fabricated material. Surprisingly only two directors out of 14, have been made accused for the reasons best known to the NAB, the judgement said.

The NAB prosecutor tried to distinguish the case of Qamarul Islam and Waseem Ajmal from the remaining directors by stating that Qamarul Islam was the convener of the procurement committee and he and Waseem Ajmal being CEO made post-bid changes in violation of the Punjab Procurement Rules, recommended the same for approval to the BoDs and as such their case is distinguishable from remaining directors; therefore, they were not made accused in this case.

The judgement said there is no force in this argument because firstly no illegality has been committed by the accused in making post-bid changes and negotiations with KSB Pums where the bid price was substantially reduced from Rs1.14 billion to Rs989 million and secondly the accused only recommended placing of the contract in favour of KSB Pumps on the basis of the negotiated bid for its approval by the BoDs and final approval was made by all the 14 directors.

The ruling said although it was argued by NAB prosecutor that installation of plants in Tehsil Dunyapur was illegal because it was not included in the priority list of tehsils but admittedly district Lodhran is included in it whereas Dunyapur is a tehsil of district Lodhran. Therefore, in the judges’ view apparently no crime was committed by the accused if they installed filtration plants in Tehsil Dunyapur which was part of district Lodhran.

“We are unable to understand the allegation that the price of the plants could not be further reduced so as to make compatible with the engineering cost estimates when there was no compromise with the quality of plants. No laboratory report has been produced before the court to establish that the plants installed by KSB Pumps were providing low quality/quantity of water from the installed plants.”

The judgement said under the circumstances there is no force in the allegations against Muhammad Masoudul Hassan, Moeenuddin and Muhammad Younas that they wilfully failed to exercise their authority in preventing loss of the State exchequer on account of defective/substandard civil works executed in installation of water filtration plants in Bahawalpur region.