Pakistan
- Number of integrity pacts
- N/A
- Relevant sectors
- Multiple
- Governmental levels
- National, Regional, Local
- First integrity pact
- 2001
- Most recent integrity pact (project end)
- Not specified
- Integrity pact recognised in country legislation
- Yes – as an integrity agreement between contracting authorities and bidders
The integrity pact for the K-III Greater Karachi Water Supply Scheme
Support for the integrity pacts (IPs) in Pakistan initially emerged at the turn of the century when a new government came to power in 1999 and committed to anti-corruption reforms in both public and private sectors. They collaborated with Transparency International Pakistan to find solutions to increase transparency in public procurement.
After a meeting in April 2001 between TI Pakistan and the Managing Committee of the Karachi Water and Sewerage Board (KW&SB), the decision was made to implement an integrity pact to oversee procurement procedures for a major water infrastructure project – the K-III Greater Karachi Water Supply Scheme. The project was estimated to be worth around 6 billion Pakistani rupees (approximately US$100 million) and entailed procedures for consultancy services in the project's design and construction works through 2003.
In 2001, TI Pakistan signed a Memorandum of Understanding with KW&SB establishing its roles as technical advisor and monitor in the project implementation. The IP agreement, which was mandatory to sign for bidders, included anti-bribery pledges and required bidders to have no-bribery anti-corruption compliance programmes. The text also spelt out sanctions for failure to comply, including denial or cancellation of the contract, liability for damages, forfeiture of the bid security, and debarment from future public contracts.
TI Pakistan worked closely with the contracting authority to review all tender materials and provide recommendations to improve value for money. The monitoring work had a significant impact on cost savings. Both contracts were awarded significantly lower than expected, resulting in net savings of over 1 billion Pakistani rupees (US$17 million), or about 75 per cent of the original estimated contract price. The IP also contributed to raising bidders' awareness of their business integrity and compliance programmes, as sanctions provided a clear incentive to comply.
Legislative recognition of the integrity pact and TI Pakistan’s technical assistance programme
Following the successful experience of the Great Karachi Water project, the Pakistani government embedded the integrity pact (IP) in 2014 in its public procurement rules, mandating their use in all tenders valued at or above 10 million Pakistani rupees (US$167,000). The Pakistani IP entails a mandatory no-bribery pledge from the contracting authority and bidders with penalties for violations. Unlike some other models, however, monitoring is done by the contracting authority and not by an independent actor or civil society.
In the same year, TI Pakistan initiated a pro-bono programme to support the effective implementation of new public procurement rules and the application of the IPs among government agencies. In a typical collaboration, TI Pakistan would sign a Memorandum of Understanding with the relevant authority and support it in preparing bidding documents according to the new rules and international standards, providing capacity-building material such as procurement manuals), and monitoring IP compliance by bidders.
- A 2013 review by TI Pakistan notes the success of this collaboration model in generating massive cost savings, positively changing the investment climate, and increasing the participation of international bidders. Some achievements include:
- In 2004, collaboration with Pakistan Steel on procuring 0.25 million tons of metallurgical coke resulted in savings of around 60 per cent compared to the initial estimate (US$37.5 million vs US$100 million).
- From 2006-2007, collaboration with the provincial Government of Sindh on a procurement for the design, monitoring, and upgrade of the Keenjhar Lake System in Karachi resulted in a final awarded contract of US$0.96 million compared to the initial estimate of US$1.73 million. In another procurement for the supply of heavy earth machinery and workshop equipment, the savings amounted to 22-42 per cent.
- In 2010, collaboration with the Trading Corporation of Pakistan for the procurement of 725,000 tons of sugar resulted in net savings of 40 per cent.
- From 2010-2012, collaboration with the Trade Procurement Authority and strict application of new rules on a tender for the Pakistan pavilion at the Expo 2012 contributed to significant positive change. While in previous similar procurements, the authority was paying bidders to make their exhibitions, the bidders were now required not only to finance their exhibitions by themselves but also, to pay the agency a royalty for using the Pakistan pavilion.
In recent years, TI Pakistan has been actively monitoring the implementation of procurement rules and IP applications across several federal agencies, provincial departments, municipalities and state-owned enterprises.
Related
Mexico
- Number of integrity pacts
- N/A
- Relevant sectors
- National, Regional, Local
- Governmental levels
- National, Regional, Local
- First integrity pact
- 2000
- Most recent integrity pact (project end)
- 2022
- Integrity pact recognised in country legislation
- Yes, as an institutionalised mechanism for independent monitoring of selected contracting projects
European Union
- Number of integrity pacts
- N/A
- Relevant sectors
- N/A
- Governmental levels
- N/A
- First integrity pact
- N/A
- Most recent integrity pact (project end)
- N/A
- Integrity pact recognised in country legislation
- N/A
India
- Number of integrity pacts
- N/A
- Relevant sectors
- Multiple
- Governmental levels
- National, Regional, Local
- First integrity pact
- 2006
- Most recent integrity pact (project end)
- 2022
- Integrity pact recognised in country legislation
- Yes – as an institutionalised mechanism for independent monitoring of public contracting