Razak Dawood is leading industrialists and businessman of this country. He is well connected with centres of powers in Pakistan. He is rich and so powerful. He served as a federal minister for commerce and industry in General Musharraf’s handpicked cabinet from October 1999 to the later part of 2002. He was his close aide during this period. Now he is an adviser to Prime Minister Imran Khan on Commerce, Textile, Industry & Production and Investment. He sits in the federal cabinet and played influential role in the shaping and formation of the economic policy of PTI government.
Descon is well reputed company and engaged in different projects in Pakistan and in different countries. The accusations of wrongdoing and conflict of interest can affect the international reputation and standing internationally. So undue criticism and objections can harm the business interests of the company in which thousands of jobs are at stake.
He lands in a controversy regarding the award of the contract to construct Mohmand Dam to his family owned company Descon. This contract is worth Rs309 billion. The Descon is the leading engineering and construction company in Pakistan. The independent experts and opposition parties have declared this contract as conflict of interests. Both the PTI government and Razak Dawood are denying this and arguing that Descon got this contract on merit and Razak Dawood played no role in this contract. So for them, it is not the case of conflict of interests.
Before we jump to the conclusion to accuse or defend PTI government and Razak Dawood, let’s examine what is the definition of conflict of interests is. This is the only way we can determine that Mohmand dam contract awarded to Descon falls under this definition or not.
Here are two definitions of conflict of interest. First, a conflict of interest is a situation in which an individual has competing interests or loyalties. Conflicts of interest involve dual relationships; one person in a position in one relationship and a relationship in another situation. A conflict of interest can exist in many different situations.
Second,a conflict of interest is a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interest refers to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public officer. Secondary interest includes personal benefit and is not limited to only financial gain but also such motives as the desire for professional advancement, or the wish to do favour to family and friends. These secondary interests are not treated as wrong in and of them, but become objectionable when they are believed to have greater weight than the primary interests. Conflict of interest rules in the public sphere mainly focus on financial relationships since they are relatively more objective and usually involve the political, legal, and medical fields.
More generally, conflicts of interest can be defined as any situation in which an individual or corporation (either private or governmental) is in a position to exploit a professional or official capacity in some way for their personal or corporate benefit.
There often is confusion over these two situations. Someone accused of a conflict of interest may deny that a conflict exists because he/she did not act improperly. In fact, a conflict of interest can exist even if there are no improper acts as a result of it. One way to understand this is to use the term “conflict of roles”. A person with two roles—an individual who owns stock and is also a government official, for example—may experience situations where those two roles conflict.
Now the readers can make a better judgment that whether this contract falls under the conflict of interests or not. But in my view there are certain questions that need to be answered in the bidding process. It is not enough in my view that the bidding process was initiated by the previous PML-N government so PTI government just followed that process and awarded contract to Descon.
Here PTI is mixing two different things. There is a clear difference between initiating a process and to make a final decision. PML-N government started the bidding process but PTI made the final decision. PTI government was not duty bound to accept the bidding process and had the option to invite fresh biddings. PTI government made its own decision and now come forward to defend this decision with logical arguments.
Descon, which has won the dam bidding, is a family company of Razak Dawood. Questions are being raised whether there is a conflict of interest as Razak Dawood is an adviser to the PM. The government’s stance on this is that the bidding was transparent and the procedure for it had been started in the PML-N government’s tenure.
Now Razak Dawood’s position is that he has resigned from the Descon management, and has nothing to do with its day to day working. But at the same time he is direct beneficiary of every economic activity undertaking by Descon because he himself and his sons are shareholders of this company. Razak Dawood said that he is a shareholder and will bear the cost whether there is profit or loss in the dam contract.
Even though, he is not part of the management at the moment but he has stakes in Descon. After quitting the government, he will join his company as chairman. He is also part of the government where all the major decisions are made. So it’s natural that people are raising questions. He holds powerful position in the government and can easily influence its decisions. The transparency and fairness must be visible in the bidding process.
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17 June, 2019