Telecom industry seeks abolition of G2G contracting under PPRA rules

The Telecom Operators Association (TOA) has called on the Pakistani government to eliminate a provision that allows direct government-to-government (G2G) contracting under the Public Procurement Rules, 2004. In a letter to the Finance Minister, Planning Minister and IT and Telecom Minister, TOA Secretary General Kamal Ahmed argued that this mechanism is preventing private-sector businesses from competing for IT, telecom and digital services projects.

The association noted that federal and provincial governments had increased state-owned enterprises and created new ones since 2021, leading to many IT and telecom projects being awarded through G2G contracting without competitive bidding. TOA warned that this has significantly hindered private sector participation, despite telecom and technology companies investing billions over the past two decades and contributing to the national revenue.

The association stressed that Pakistan's telecom industry is evolving into a global digital-services provider, but government spending on local IT, telecom and digital services is increasingly going to state-owned companies. TOA argued that removing the G2G provision would give Pakistani technology companies a chance to test their products domestically before competing internationally.

The association also raised concerns about regulatory exemptions, preferential treatment and implicit government guarantees enjoyed by state-linked entities and G2G contractors, which give them an unfair competitive advantage over private firms. TOA highlighted the lack of innovation and efficiency that can result from reduced competition, as well as the missed opportunities for job creation, especially for educated youth.

The TOA also criticized the practice of SOEs subcontracting G2G projects to preferred private companies without following transparency and accountability rules, calling it a circumvention of public procurement requirements. The association urged the government to repeal Clause 42(f) and require SOEs to compete with private firms on equal terms for government-funded projects, stating that this is in the best interest of the nation.