An inquiry committee of the Competition Commission of Pakistan (CCP) has unearthed embezzlement of billions of rupees in the process of hardware material supply to power distribution companies (DISCOs).
The inquiry, conducted on the directions of Prime Minister Imran Khan, identified that contractors and manufacturers, in connivance with the officials of DISCOs supplied substandard hardware, which resulted in extraordinary line losses.
Owing to the poor line material, power sector losses increased manifold, causing billions of rupees worth annual losses to the national exchequer.
The committee’s report, recommending necessary proceedings against contractors and manufacturers, has issued show-cause notices to 46 companies after gathering evidence of alleged cartelization.
The competition commission says that it acquired documentary evidence regarding the tenders issued by several DISCOs including Hyderabad Electric Supply Company (HESCO), Multan Electric Supply Company (MEPCO), and decided to conduct a detailed inquiry.
The CCP then assigned the task to three senior officials. They looked into bidding details from the last three years, as well as inspected the material purchased during the period to find out that billions of rupees have been embezzled in the last few years by line hardware suppliers and DISCOs.
The inquiry committee noted discrepancies in the bidding process, with favors being given to particular companies, unveiled a cartelization of contractors and manufacturers, and that they follow strict SOPs to divide the tenders among them.
The inquiry also highlighted several other measures that hindered market competition and recommended legal proceedings against the contractors and manufacturers under Section 30 of the Competition Act 2010.