Guarantee ‘withdrawal’: LWMC for probe against contractor
The Lahore Waste Management Company (LWMC) has sought an inquiry by the Federal Investigation Agency (FIA) into withdrawal by a foreign firm of the bank guarantee concerning a contract for cleanliness in the city.
The contractor has also filed a case in an international court for the recovery of its assets and fine after the expiry of the contract.
LWMC officials told The Express Tribune that the previous provincial government had decided to outsource the cleaning work of the metropolitan corporation. The operation was divided into cleaning and washing the streets and roads, and transporting the collected garbage to the dumping point.
Tenders were issued to bring in international companies, following which two foreign companies were hired on November 3, 2011 at charges of $19 per tonne from collecting and transporting the garbage of the city.
The contract lasted until January 31, 2020. The officials said both the companies had earned more than Rs70 billion during the period.
One of the companies deposited $1.5 million in a private bank as a guarantee.
It was also agreed in the agreement between the foreign companies and LWMC that after the expiry of the stipulated period, the vehicles brought to Pakistan for garbage collection would be owned by the civic authority. More than 500 vehicles of the metropolitan corporation were reportedly auctioned due to the condition.
Read LWMC awards waste collection contracts
However, as the deadline approached, financial disputes began between the contractors and the LWMC. The agreement’s clause about the vehicles was also allegedly amended.
As soon as the agreement expired, the foreign companies filed a case in an international court for recovery of assets, including vehicles, and fine. The LWMC and Punjab government are contesting the case.
The sources said that LWMC had now found out that one of the firms had withdrawn the amount deposited in a private bank before the agreement as a bank guarantee.
The LWMC reportedly conducted a preliminary inquiry, during which it was revealed that the lock of a cupboard had been broken and documents related to the agreement removed from there.
The sources said that several officers had been questioned but the responsibility could not be fixed during the initial inquiry.
The LWMC also reportedly wrote letters to the bank about not releasing the guarantee amount, but it was withdrawn.
LWMC officials then referred the issue to the Federal Investigation Agency (FIA). The FIA has reportedly launched an inquiry into the matter.
When contacted, Punjab Local Government Minister Mian Mahmood ur Rasheed said the issue would become clear after the FIA inquiry report.
Senior lawyer GA Khan Tariq said in reply to a question that the amount could not be released without an affidavit from both parties to an agreement.
He said the FIA investigation would confirm if there had been forgery in documents for the withdrawal of the money. The lawyer said that in case an illegal act is confirmed in the inquiry, legal action would follow.
Published in The Express Tribune, March 7th, 2022.