IMF Tells Pakistan Govt to Stop Awarding Contracts to Itself

Notably, the International Monetary Fund (IMF) has pushed Pakistan to sharply restrict the practice of administration agencies directly awarding contracts to state-owned businesses.

Key points

• Under its Governance and Corruption Diagnostic Assessment action plan, Pakistan was required to approve and notify the Public Procurement Regulatory Authority (PPRA) Rules 2026 by June 2026.
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• Where specialised portions of a project need outside assistance, the IMF has suggested that subcontracting should not exceed 40% of the total work.
• Pakistan has accepted the 40 percent ceiling but has proposed allowing the relevant authority to change financial limits under the rule from time to time.

For context, the lender notes such deals should only be allowed in limited and clearly justified circumstances.

Meanwhile, the dispute has delayed Pakistan's new public procurement rules. It are meant to replace the Public Procurement Rules 2004. Govt Contracts Will Create More PIAs: Telecom Industry.

Meanwhile, the deadline was missed as the administration and IMF differed over provisions dealing with direct contracts to state-owned enterprises (SOEs).

As well as those with previous convictions, could be disqualified from bidding for administration procurement, contractors, beneficial owners, owners and directors facing certain court proceedings that could lead to bankruptcy.

In practice, the biggest disagreement is over Rule 32-F. It governs direct contracting between administration bodies and SOEs.

Notably, the IMF has proposed that administration procuring agencies should not normally award contracts directly to state-owned professional, autonomous or semi-autonomous organisations for goods, works, services or consultancy.

It wants such contracts limited to exceptional cases, including projects involving urgent, geographically scattered or remote works and services where a direct award is considered to be in the public interest.

Pakistan has accepted the 40 percent ceiling but has proposed allowing the relevant authority to change financial limits under the rule from time to time. Taxpayers to Complete NADRA Biometric Verification At Home.

Under the IMF's proposed framework, exceeding the permitted subcontracting limit would be considered a material deviation and could fall under rules dealing with collusive, coercive, corrupt, fraudulent and obstructive conduct.

In practice, the IMF has additionally called on greater disclosure when a direct contract is approved. Stay Connected with ProPakistani.

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For now, IMF Tells Pakistan Govt to Stop Awarding Contracts to Itself remains the part of the story worth watching, and further updates are likely as more details are confirmed.