Govt notifies new procurement rules with IMF team in town

Govt notifies new procurement rules with IMF team in town

• Changes retain certain exemptions for direct contracting with SOEs despite reservations • IMF delegation meets finance, tax officials amid uncertainty on sovereign wealth fund law ISLAMABAD: As question marks linger over the continuous breach of structural benchmarks regarding the sovereign wealth fund (SWF) law, the federal government on Monday notified new procurement rules two days ahead of the deadline, on the first day of talks with the International Monetary Fund (IMF) for disbursement of $1.2 billion. Sources told Dawn that the IMF staff mission led by Iva Petrova held a series of discussions with officials from the finance ministry, the Federal Board of Revenue, the Establishment Division, and the finance secretaries of Khyber Pakhtunkhwa and Punjab. The IMF team has been in Pakistan since September 23. It spent the initial days in Karachi for engagements with the State Bank of Pakistan and other stakeholders. The review talks usually begin with a customary call on the fina­nce minister, but he is currently abroad as part of the PM’s delegation to the UN General Assembly. The Sovereign Wealth Fund law is part of the discussions with the visiting IMF team. Authorities are in breach of an end-March 2026 structural benchmark on amendments to the Sovereign Wealth Fund Act to adopt governance mechanisms and safeguards for seven state-owned enterprises, involving an asset portfolio of about $8 billion. Most of them are blue-chip entities listed on the stock exchange but remain outside normal reporting requirements. They include OGDCL, PPL, Mari Petr­oleum, National Bank of Pakistan, Govt Holdings, Pakistan Development Fund, and the Neelum-Jhelum Hydropower project. The amendments are pending parliamentary approval. New procurement rules Against this backdrop, the government notified the Public Procurement Rules 2026 to promote greater transparency and competition in public procurement while keeping certain exemptions for direct contracting with SOEs and limiting the bidding to national firms. The IMF had certain reservations over the preferential treatment of SOEs for direct contracting. Rule 32 of the new rules provide that a procuring agency may engage through EPADS (E-Pak Acquisition and Disposal System, a digital system developed and enforced by the Public Procurement Regulatory Authority) to manage and administer the process of procurement in direct contracting with state-owned entities for the procurement of such works and services, including consultancy ser­vices, which are time-sensitive, scattered, remotely located and in the public interest or in case of urgency and provided they do not sub-let those contracts. The authorities would also have the powers in specific cases to limit bidding only to national bidders or certain categories of national bidders or prohibit participation of bidders of some nationalities or allow preference to domestic bidders for certain projects, and goods manufactured, mined, extracted and grown in the country. The Public Proc­urement Regulatory Authority (PPRA) said the new Public Proc­urement Rules 2026 repealed the Public Procurement Rules 2004. Made under Section 26 of the PPRA Ordinance 2002, the new rules have come into immediate effect, with procurement cases initiated prior to the commencement of the new rules continuing under the 2004 framework. The new rules make the use of EPADS mandatory for public procurement and disposal by federal procuring agencies, provide for the establishment of dedicated procurement cells, and introduce mechanisms to discourage conflicts of interest through third-party validation, evaluation, and pre-shipment inspection for large procurements. The new rules further strengthen the enforcement mechanism through the provision of blacklisting and cross-debarment, independent grievance red­ressal committees with an appellate mechanism at PPRA to clearly identify material deviations and mis-procurement, including deliberate procurement outside EPADS, failure to constitute prescribed committees, tailor-made specifications, violation of advertisement and response-time requirements, and failure to follow prescribed evaluation criteria. The rules allow other efficient methods of procurement such as gallop tendering and alternative procurement methods, including shopping and negotiated tendering, subject to specified conditions. Efficiency measures have been embedded in the framework, reducing response times, shortening standstill periods, and streamlining tender processing cycles to enable faster contract awards. The rules also emphasise sustainable procurement, encouraging inclusiveness of SMEs and marginalised groups, and aligning procurement practices with environmental policy. PPRA Managing Director Hasnat Ahmed Qureshi said new rules introduce a range of measures to strengthen oversight throughout the procurement cycle, from procurement planning and bidding to contract management, performance evaluation and closure. Published in Dawn, September 29th, 2026