Lahore: The Competition Commission of Pakistan (CCP) has stated that there were certain restrictions for new entrants in power sector procurements which needed to be avoided.
In a report “Opinion on Competition Concerns in Public Procurement of Electrical Power Equipment,” the CCP says that public procurement constitutes 15 to 25 per cent of gross domestic product, or approximately $38 to $63 billion.
The procuring agencies, mainly power distribution companies (Discos) and National Transmission and Dispatch Company (NTDC) insert certain conditions that preclude competition at the bidding stage. This needs to be pre-empted, otherwise, the commission would move according to the law concerned.
Reference to specific brands, restrictions regarding the country of origin, domestic price preference, biased development of specifications and experience clauses were some of the barriers, the report mentioned.
Apart from the above-mentioned areas, requirement to submit type-test reports, arrangements in lots (lumping), provision of insufficient delivery time and lack of information for participation in the bidding process also inhibit competition in the sector.
“These may be in the form of discrimination on the basis of national origin or restrictive conditions for entry, such as grouping of equipment in a way that only a select few can cater to, or introducing the conditions for conforming to tests whose scope, as per local specifications, a condition that cannot be fulfilled early enough to participate in a tender if required as a per-requisite for bidding.
“All these concerns have one thing in common that they inhibit competition from reaching its full potential,” it maintained.
“With regard to discrimination based on the country of origin, we advise that competition should not be foreclosed to the existing or potential entrants by limiting procurement to certain countries, but instead specifications should be developed that are reflective of performance expected by the procuring agency,” it said.
With respect to domestic price preference, the CPP report said that it does not encourage it in any shape or form.
With regard to “biased development of specifications,” the CCP is of the view that any change that is brought about in the existing specifications must be carried out by technical experts.
These measures require a “uniform policy on the part of procuring agencies (NTDC and Discos) to attain best price and quality outcome in successive procurements.
