REFERENCE / COMPLAINT NO. III
Reference dated
29-7-2002 – Billion Rs Loss in Army’s Truck Deal
July 29,
2002
Lieutenant
General Munir Hafeez
Chairman
National
Accountability Bureau
Chief
Executive Secretariat
Islamabad
Dear
General Muneer Hafeez
The
Pakistan Peoples Party is concerned that national resources are being
squandered and a loss being caused to the National Exchequer through
favouritism in the purchase of army trucks. As reported in a news story
captioned “Army’s Rs. 2.4 billion truck deal triggers questions” by
Kamran Khan, published in THE NEWS International dated Sunday July 28, 2002.
The
decision to procure the army trucks, as indeed other purchases by the army,
is made by army personnel appointed by the Chief of Army Staff.
In this
connection, the service chief appoints the persons to the specifications
committee and then appoints the persons to the tender committee. He then
supports the decisions taken by the specifications and tender committees. In
other words, the service chief becomes judge and jury.
This
procedure was adopted under General Zia when the defence ministry was made a
rubber stamp body. None of the civilian governments were allowed by powerful
service chiefs backed by an eighth amendment president, to change the
procedure to make it transparent and equitable.
A classic
case of this emerges in the purchase of a contract of Rs 2.4 billion for the
purchase of 1,000 trucks a month back. Gandhara Industries Limited (GIL),
vehicles which were better priced were struck out without reason although
they were almost half the price of the vehicle that was chosen. This means
that the purchase of 1000 trucks could have been done at a price of Rs. 1.2
billion as opposed to double that amount. At stake is Rs. 1.2 billion in a
poverty stricken country. This is a huge amount of money and a whole brigade
would be unable to earn it during its entire tenure in the Pakistan army.
At a time
when our armed forces are on war alert at the borders, and have been there
through high altitude winds and snow as well as the shocking heat of summer,
it is astonishing that the army could be considering the purchase of trucks
at wasteful prices. Such distortions in purchase prices raise issues of
corruption. The answer that the army has its self correcting mechanism is a
mere excuse to cover up wrong doing. It is known that under the discipline
of the army, none can question its chief.
In this
age when Prime Ministers are being called to the dock and naval chiefs
arrested time and again, it is the demand of the time that the scandalous
purchase of the over priced trucks be examined and those responsible brought
to task.
I am aware
that the explanation given is that the overpriced trucks fit the
specifications whereas the GIL trucks fail to do so. I am unable to accept
this as an explanation. It is known that the corrupt practices start in the
specifications committee. The specifications committee puts in
specifications that are specific to a particular brand to bye-pass the
selection procedure. In this way, it prejudges the contract ensuring that
while technically the decisions are taken higher up, in fact they were taken
by the junior selection committee at the behest of more powerful elements.
Therefore
the explanation that "The vehicle was not approved for short-listing as 5
ton GS/ammunition carrier vehicle" is untenable as the specification
committee specification that 5 ton clause be put in "Hino- specific" to
favour the costlier truck. By so doing, the specification committee left
the Directorate General Military Purchase, with the choice of the expensive
vehicles.
It is
disturbing to learn that the specifications committee through manipulation
of specifications rejected the cheaper truck by the largest Japanese truck
manufacturer. Moreover, a large number of the cheaper Isuzu trucks are
already in use of the Pakistan Army. Disturbingly, international tenders
were not invited which is usually the way kickbacks come into operation. It
is understood that tender documents were sent to four pre-selected
companies.
According
to press reports, the manufacturers of the cheaper truck, GIL, showed
documents that its vehicle underwent successful trials at Thandiani with 7.5
ton ammunition and in Jhelum
in sandy terrains. GIL further said that modifications were permitted in
the more expensive vehicle allowing them to modify double rear wheels
vehicles into single rear wheels vehicles although they had never produced
the GT3H model with single rear wheels.
The
cheaper Isuzu trucks were offered to the Army at the rate of $25,000 per
truck as against the approved price of the expensive truck of about $40,000
per Hino truck.
Pakistan
Army purchased 3,000 Land Rover trucks in 1995 amidst allegations of
kickbacks. However, NAB has still to investigate the same which it must do
to end its image as a political handmaiden of corrupt regimes bent upon anti
people policies to continue with its mafia style politics.
It is
hoped that under your leadership of the Nab, national interest will be put
first to review the political persecutions and replace them with the goal of
a corruption free Pakistan.
Nayyar
Bokhari, Advocate
On Behalf
of the Pakistan
Peoples Party
The
Reference / Complaint is based on the source incorporated as under :
CEC Army's
Rs 2.4 billion truck deal triggers questions
The News
International - Sunday July 28, 2002
By Kamran
Khan
KARACHI:
The Pakistan Army has dismissed questions focusing the price and technical
worthiness of its contract of Rs 2.4 billion for the purchase of 1,000 trucks
about a month ago. The questions had been raised by one of the most decorated
retired lieutenant generals, whose company lost the bid for the trucks,
well-informed sources said here. Since the deal represented the largest purchase
order of trucks by the Pakistan Army since 1995, it has invoked considerable
interest in the military and business circles. The assembly of these 1,000
vehicles would be completed by June next year in Pakistan. Gandhara Industries
Limited (GIL), owned by the family of Lt Gen (retd) Ali Quli Khan, who had
served Pakistan Army as chief of general staff, corps commander and military
intelligence chief, believes that its trucks were unfairly struck out of the
race without assigning specific technical reasons.
But, the Army
maintains that the GIL's Isuzu vehicle did not meet the required specifications
and was not approved by the technical personnel of the Army. Inviting the
attention of the Vice-Chief of Army Staff General Mohammad Yusuf towards the
truck deal, Lt Gen (retd) Ali Quli Khan had claimed in a letter last month:
"From all indications it appears that the Army is ready to purchase Hino trucks
at approximately double the price for which equally good Isuzu could be
available provided the Pak Army decides to give preference to substance over
form."
A senior
general officer of the Army, however, responded to Lt Gen (retd) Ali Quli's
observation: "The vehicle was not approved for short-listing as 5 ton
GS/ammunition carrier vehicle. After necessary modification of suspension system
the vehicle was again tried but the technical personnel are not satisfied and do
no recommend the vehicle for induction."
The thrust of
Gen Quli's argument, however, was that the decision to put the 5 ton clause in
the specification was "Hino- specific" because it leaves Directorate General
Military Purchase, the purchaser, with only one choice, while it threw the
largest truck manufacturer of Japan out of the contest. A large number of Isuzu
trucks are already in use of the Pakistan Army, while the Hino truck
manufacturers are getting their first chance to prove their worth with the Army.
As per standard procedures for bulk military purchases in Pakistan, no
international tenders were invited but tender documents were sent to four
pre-selected companies for procurement of 1,000 5 ton 4x4 trucks (ammunition
carrier vehicle) by the director general military purchase on April 10.
Sources
familiar with the issue said that from the very first day it was one-on-one
competition between the agents of Hino and Isuzu trucks in Pakistan. The
European gun and military vehicle manufacturer Styer and a Chinese firm that had
initially shown interest in the project were also invited to send their vehicles
for the trial, but both the companies subsequently lost interest in the deal.
Gandhara
Industries sources dispute the Army's claim that their vehicle was not approved
as 5 ton ammunition carrier. They say after necessary upgrading, as suggested by
the technical personnel of the Army, the Isuzu trucks were delivered to the Army
for extended trial in February and after two months of trials the vehicle was
finally short-listed and approved as 5 ton ammo carrier at the GSEEC meeting
held on April 13.
Documents
available with this correspondent show that the vehicle had actually been
short-listed and approved and on the basis of that certification alone the
Directorate General of Military Purchase had sent tender documents to Gandhara
Industries Limited. While the military sources said that a serious suspension
problem had been detected in the Isuzu trucks, GIL officials showed documents to
claim that the vehicle - after improved suspension - successfully underwent
strict trials at Thandiani where it was loaded with 7.5 ton ammunition and in
Jehlum where it underwent trials in a sandy terrain. The GIL sources said that
while the technical personnel of the Army raised questions about the
modification made in the Isuzu vehicle, they let the Hino manufacturers modify
their double rear wheels vehicles into single rear wheels vehicles - a key
specification mentioned in the tender document. Hino, sources in the motor
industry said, had never produced the GT3H model with single rear wheels.
These sources
said that while making the final decision the officials clearly ignored an
extended international warranty of five years that Isuzu was ready to offer with
full back-up support. The Isuzu trucks were offered to the Army at the rate of
$25,000 per truck as against the approved price of about $40,000 per Hino truck.
Isuzu had offered a deletion plan of 40 per cent against Hino's 35 per cent,
documents show. Pakistan Army's purchase of more than 3,000 Land Rover trucks in
1995 had also generated controversy with the allegation that the owner of Sygma
motors, which had supplied the vehicles, was closely associated with the then
chief of general staff of the Pakistan Army.
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