Pakistan unveils bids for tobacco track-and-trace system

Pakistan’s Federal Board of Revenue (FBR) has revealed the bids for a contract to provide a national track-and-trace system for tobacco products.

Pakistan has said it intends to have the system in place by the end of March next year as part of a drive to interfere with the illicit trade in cigarettes and clamp down on tax evasion – which is estimated to cost the country around Rs 40bn (around $500m) each year.

High levels of taxation in the Pakistani market means that the public is increasingly turning to untaxed, illicit supplies of tobacco, with one study suggesting that the illicit category accounts for around 42 per cent of the overall market in 2017.

All told, 13 technology providers have submitted tenders as part of the Invitation for License (IFL) process, having been asked to quote a price per 1,000 stamps.

The lowest bidder – National Radio Telecommunication Corp (NRTC) – seems to have made an error in its quote that could exclude it from the bidding, according to an evaluation report published by the FBR this week.

Its offer of Rs 731 per 1,000 stamps – still the lowest bid at that level – was mis-typed as Rs 0.731, and the FBR says it will be in violation of the tender process if it does not stick its erroneous offer. It is inconceivable that is possible for the provider given most of the other bids are in the Rs 799 to Rs 1,250 range.

The second- and fourth-lowest bidders – SICPA SA/Arwentec and De La Rue/NTL – didn’t offer a fixed, unconditional price so have been disqualified from the process, according to the document, which as it stands means that the contract looks set to go to NIFT Consortium, which offered the third-lowest price.

The FBR is expected to officially award the contract on October 24 – 10 days after the meeting of the FBR’s licensing committee on October 14 – but according to local media reports may face a legal challenge from some of the applicants.

The other companies that submitted bids were: Reliance Solutions (Pvt) Ltd; Steuermaaken Solution (Pvt) Ltd; Authentix/Jaffer Brothers Consortium; ITechnology; Synavos Solutions (Pvt) Ltd; Beijing Santel Technology & Trading Co; Ora-Tech System Pvt Ltd; Eagle Fly-Capital Services System; and CRPT (MMT&T) Associates.

In July, the International Monetary Fund (IMF) approved a $6bn loan to Pakistan that is intended to support economic reforms, which includes the implementation of a track-and-trace system for tobacco in a long list of initiatives.

According to a report in the Tribune newspaper, under its IMF obligations Pakistan had been due to award the contract for the system by the end of September.