Hydropower project: Chinese firm’s plea to halt bidding process for dam rejected

LHC held that court cannot issue directives to World Bank

ISLAMABAD: The Supreme Court on Monday turned down a Chinese company’s plea, praying the court to stay the process of bidding for the construction of the Dasu Hydropower Project.

A two-justice bench led by Chief Justice Anwar Zaheer Jamali and included Justice Sheikh Azmat Saeed also asked the Power Construction Corporation of China to place on record the Lahore High Court verdict regarding the matter.

In 2014, Wapda had announced it would undertake a project on the Indus River located at Dasu Town. The stage-I of the project was estimated to cost $4.3 billion. The World Bank conceived an innovative approach to finance the project.

In this regard, the World Bank has provided a loan of $588 million and partial credit guarantee of $460 million. It has also indicated to provide another IDA/IBRD tranche of $533 million and a partial credit guarantee of $460 million in 2017.



All this covers approximately 25 per cent of the total project cost of the stage-I. As indicated in the Project Appraisal Document, about $2 billion commercial loan is to be obtained from the local as well as foreign banks by utilising World Bank’s partial credit guarantee.

A single-bench of the Lahore High Court on May 31, 2016 and its divisional bench on June 29, 2016 held that the court has no jurisdiction to issue directives to the World Bank under Article 199(3) of the Constitution.

Salman Aslam Butt, representing the Chinese company, argued that under the writ jurisdiction, the high court has the authority to give a directive to anyone and any authority.

He also contended that as public funds are involved in the project, therefore, the high court has the jurisdiction to issue orders to the World Bank. He said that Indian courts had passed such orders.

He argued that no company could be barred from taking part in tender and bidding processes merely on the dictation of the World Bank, adding that the country has its own constitution and relevant laws while barring a company is violation of fundamental rights. In this respect, he argued, high courts have jurisdiction to entertain the plea.

Justice Azmat asked: What shall we do in case the World Bank refused to obey the court’s directive? He said they could not interpret the law in a vacuum and for that they needed the order of the high court and asked the counsel to provide the judgement. The judge further said that a foreign company is asking a Pakistani court to give a directive to the World Bank.

The counsel prayed the bench that they (the company) may be allowed to participate in the bidding process”. He said this is a huge project and if the judgment does not come and in the meantime the process of bidding continues then they (the company) would suffer.

The counsel for Wapda informed the court that bids have been called from the companies and have already been opened. However, the Chinese company lawyer requested the court that till the judgment of this court is delivered, bids result should not be made public. He further said that the evaluation process would take at least three to four months.

Published in The Express Tribune, July 12^th, 2016.