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Business Recorder
2 days ago
- Business
- Business Recorder
Financial property of MoFA: PAC panel highlights serious lapses
ISLAMABAD: A sub-committee of the Public Accounts Committee (PAC) on Monday highlighted serious lapses in financial propriety by the Ministry of Foreign Affairs, leading to a loss of Rs566.43 million due to the obtaining of uneconomical health insurance policies for Pakistan Missions in the United States. The PAC's sub-committee presided over by MNA Syed Naveed Qamar took up the audit report of Ministry of Foreign Affairs (MoFA) for the year 2012-13, terming the disbursement was incurred in sheer violation of the General Financial Rules (GFR) and Public Procurement Rules (PPR) 2004. Sub-committee convener Naveed Qamar said that Pakistani Foreign Missions abroad should not consider public funds as 'spoils of war' and directed the MoFA make efforts to stop wastage of public money. The audit report observed that the insurance policies were procured at knowingly higher rates, circumventing mandatory advertising on the Public Procurement Regulatory Authority (PPRA) website and without proper competitive bidding. The report noted a glaring variation in the rates of health insurance among the missions in New York and Washington, raising serious queries about transparency and due diligence in procurement practices. These actions contravened set rules and procedures for public officers to exercise the same prudence, as they would with their own finances. In response to the audit observations raised in December 2013, the ministry stated that the policies were procured following a cost-benefit analysis and with approval from competent authorities. However, Auditor General of Pakistan (AGPR) rejected the explanation, stressing for a thorough verification of the claims. A Departmental Accounts Committee (DAC) held on February 3, 2014, directed the ministry to provide copies of the three insurance policies adopted by the missions in UN New York, Consulate General New York, and Washington. The committee has also directed the ministry concerned to seek clarification from the Ministry of National Health Services (NHRS) on the upper age limit for dependent children eligible for health insurance for officials posted abroad. The AGPR has recommended that the MoFA present its case before the PAC to address the financial irregularities and provide justification for the substantial loss to the public exchequer. The sub-committee also observed that foreign missions abroad involved in committing serious irregularity by lapsing public funds. The committee instructed that officials involved in irregularity and misconduct must be held accountable. The committee lambasted at the MoFA for not taking audit paras seriously in DAC and PAC. Naveed Qamar observed ambassadors are utilising community welfare funds as charity for personal gains with impunity. The committee; however, pended majority of audit paras due to ill-preparedness of MoFA officials. Audit reports on the accounts of the Ministry of Foreign Affairs for the Audit Years 2011-12, 2012-13, 2014-15, 2015-16, 2018-19, 2020-21, 2021-22 and 2022-23 were examined in sub-committee of PAC. The directives were to examine and analyse the use of huge public funds involved in the hiring of private buildings for Pakistani Missions abroad despite the fact that in some cases the land was either purchased or gifted but the buildings could not be timely constructed. Majority of audit paras were mostly related to the discrepancies in the amounts of security deposits or over payments and unjustified extensions or retention of the rental buildings. Copyright Business Recorder, 2025
Business Recorder
05-07-2025
- Business
- Business Recorder
Procurement rules: govt seeks Law Ministry's views on SIFC powers
ISLAMABAD: The government has sought the Law Ministry's opinion on whether the powers of the Special Investment Facilitation Council (SIFC) take precedence over the Public Procurement Rules in the hiring of consulting firms, sources close to the Secretary of Commerce told Business Recorder. This move follows a summary submitted by the Ministry of Commerce seeking to hire M/s Haider Global BVBA, a lobbying firm, to assist in the extension of Pakistan's Generalised Scheme of Preferences (GSP) Plus status with the European Union (EU). On June 17, 2025, MD (PPRA) Hasnat Ahmed Qureshi informed the Board that the Ministry of Commerce in a letter of June 12, 2025 had requested the Authority for exemption from application of Rules 20 & 21 of the Public Procurement Rules, 2004 and other applicable provisions of PPRA framework, for hiring the services of a lobbying firm in Europe, through direct contracting, in terms of Section 21 of the PPRA ordinance, 2002. The lobbying firm will help in the ongoing review and renewal of Pakistan's GSP Plus status. EU-Pakistan business forum in May: SIFC readying its strategy Adding background of the case, MoC explained that the current GSP Scheme was introduced by the European Union in 2012 through EU Regulation 978/ scheme was implemented on January 1, 2014, and initially intended to remain in effect for ten years, until December 31, 2023. The European Parliament has approved an amendment to the said EU Regulation, extending the validity of the existing GSP Regulation by four years, up to December 31, 2027, instead of December 31, 2023. The scheme provides zero duties on over 66% of EU tariff lines, and exports from Pakistan to the EU have increased from $ 4.6 billion in 2014 to $ 8.38 billion in 2024. Pakistan has undergone four biennial reviews of the GSP Plus, and the next review is now due, with a Monitoring Mission scheduled to visit Pakistan starting on June 22, 2025. However, the visit has been postponed due to the conflict in the Middle East and unpredictable travel logistics at that time. Now the Monitoring Mission is expected in November or December this year. According to the MoC, considering the significance of GSP Plus status for Pakistan's exports, the hiring of a lobbying firm is critical for the renewal and extension process. The Ministry highlighted that such a firm should: (i) possess expertise in EU law and conventions to support Pakistan in formulating appropriate legal responses; (ii) assist Pakistani businesses in adapting to evolving EU regulations affecting key sectors; and (iii) maintain access to experienced former EU policymakers who can provide insights on potential political and economic challen8es. The Ministry of Foreign Affairs (MoFA) has enclosed the proposal and payment schedule from M/s Haider Global BVBA regarding the ongoing review and renewal of Pakistan's GSP plus status. The proposal was received from Pakistan's s Mission in Brussels. According to the proposal, the contract term will be three years, with a total payment of Euro 6 million (approximately Rs 2 billion) to be made as per the payment schedule. In view of the upcoming visit of the Monitoring Mission of the European Commission, the MoC is of the view that it is imperative that a lobbying firm, as proposed by the Pakistan Mission in Brussels, may be hired on an urgent basis to safeguard our national interest. MD (PPRA) further stated that the MoC, in this regard, submitted a summary to the Prime Minister, through the Ministry of Foreign Affairs, Finance Division, and SIFC seeking approval for hiring the services of a lobbying firm by relaxation of the relevant provisions of the PPRA Rules and other financial codal formalities. The SIFC on June 10, 2025 endorsed the request of the Ministry of Commerce and decided 'given the extreme time constraint and criticality of GSP for national economy, SIFC endorses the request of the Ministry of Commerce for exemption from relevant clause of PPRA rules to enable it to go for direct contracting with a firm which has the required expertise, experience and standing to fulfil task, price reasonability be worked out by the Ministry of Commerce.' Subsequently, the Prime Minister's Office in a letter of June 12,2025, directed the MoC that the matter be placed before the PPRA Board along with recommendations of SIFC for consideration and approval. 'Before the case is submitted for the orders of the Prime Minister, Ministry of Commerce shall place the case along-with the recommendation of SIFC for the consideration and approval of the PPRA Board and resubmit the summary accordingly for the order of the Prime Minister.' Secretary Commerce Division, Jawad Paul and the Additional Secretary Europe (MoFA) were present in the meeting to defend the case, while the Deputy Head of Mission, Pakistan's Mission in Brussels, attended the meeting via video link. Responding to a query by a Board member, regarding the urgency of the matter, Secretary Commerce explained that the review Monitoring Mission of European Commission will be visiting Pakistan to consider the status of Pakistan, therefore it is critical for continuation of GSP plus scheme that the firm is hired on immediate basis. The Chair/ Secretary Finance, Imdad Ullah Bosal pointed out that the PPRA Board could only recommend exemptions from application of the procurement Rules, and that the finalization and hiring of a lobbying firm was to be done by the Commerce Division as a procuring agency in this case. During the discussion, the Secretary of Commerce also highlighted the need for clarity regarding the recommendation of exemption from application of PPRA rules, both by the SIFC and PPRA Board, as it leads to duplication and consumes considerable time. He was of the view that referring such cases to the PPRA Board should not be required when SIFC had already recommended the case. Most Board members also expressed similar views on the issue and recommended adopting a consistent and standardized approach for handling cases endorsed by the SIFC for exemptions from the procurement Rules. One member opined that it is a question of law and clarification should be sought from the Law Division as to whether the PPRA Board should consider exemption from application of procurement rules, already recommended by SIFC under 10-F of Board of Investment Act 2023 'power to relax or exempt from regulatory compliance' or otherwise? Secretary Commerce emphasized that in line with the recommendations and endorsement of the SIFC and direction of PMO, PPRA Board should recommend the case to the Federal Government, for grant of exemption from operation of Rules 20 and 21 of PPRA Rules, 2024, and other applicable provisions of PPRA Framework for hiring of M/s Haider Global BVBA through direct contracting under Section 21 of PPR Ordinance. After a thorough discussion on the importance of the matter and legitimacy of the recommendations of the PPRA Board decided to seek opinion from the Ministry of Law &Justice on the legal question as to 'whether exemption recommended/endorsed under Section 10-F of BoI (Amendment) Act, 2023 by the SIFC is sufficient for grant of exemption by the Federal Cabinet or matter is required to be referred to PPRA Board again for consideration of exemption under Section 21 of PPRA Ordinance, 2OO2 in addition to the exemption recommended by SIFC ?' Copyright Business Recorder, 2025
