Pakistan to End SOE Preference in Procurement

The Federal Government of Pakistan has apprised the International Monetary Fund (IMF) that comprehensive amendments to the public procurement regime — specifically removing preferential treatment previously extended to State-Owned Enterprises (SOEs) — will be promulgated by June 2026, according to media reports.

Following approval by the Federal Cabinet, the revised regulatory framework will be formally notified, superseding the existing Public Procurement Rules to institutionalize competitive neutrality and ensure equal treatment of all bidders participating in public tenders.

Under the proposed regime, procurements exceeding Rs. 2 billion will be subject to mandatory third-party evaluation, while contracts valued between Rs. 500 million and Rs. 2 billion will undergo compulsory third-party validation. Independent Grievance Redressal and Inspection Committees will be constituted, and pre-shipment inspection of goods will be made obligatory. The Public Procurement Regulatory Authority (PPRA) will maintain a panel of independent experts to support procuring agencies in technical evaluation, validation processes, and adjudication of complaints.

The reforms further contemplate curtailing direct contracting and mandating universal adoption of the e-Government Procurement and Disposal System (EPADS) within 12 months. The Federal Government intends to operationalize EPADS across all federal entities and integrate it with public sector enterprises, government departments, and key databases — including tax records, National Database and Registration Authority (NADRA), and audit systems — by June 2027. Provincial implementation is projected for completion by December 2028.

To reinforce fiscal oversight, quarterly monitoring reports encompassing both development and non-development expenditures will be introduced. Revised Standard Bidding Documents are currently under review and are expected to be finalized by June 2026.

Dedicated Procurement Cells have been established in 122 federal procuring agencies to date. Officials assigned to these units are required to obtain certification under the PPRA Competency Framework, developed with technical assistance from the World Bank. Since July 2024, 2,205 individuals have undergone training in procurement regulations and EPADS utilization.

PPRA has also reinforced grievance redress mechanisms under the 2021 regulatory framework, mandating online publication of decisions. Its Monitoring and Evaluation Wing will oversee complaint handling, conduct compliance reviews, and issue findings accompanied by corrective recommendations.

Additional measures under consideration include full integration of SOE procurement within EPADS, deployment of data analytics for risk-based audits, implementation of automated red-flag systems to detect procurement irregularities, and broader public disclosure of grievance outcomes.

While the IMF has identified structural deficiencies in Pakistan’s procurement governance in its Governance and Corruption Diagnostic Assessment, PPRA officials have clarified that the reform agenda is part of a broader domestic institutional strengthening initiative rather than being exclusively IMF-driven.