The Law Department of Azad Jammu and Kashmir (AJK) has submitted a legal opinion in favour of the contract for the 48 megawatt Jagran Phase –II hydel power project to China Water and Electricity (CWE) Construction Company against another bidder, Sinohydro-HRLJV.
AJK Senior Minister and Power Development Organisation (PDO) In-charge Chaudhry Muhammad Yaseen had challenged the contract while writing a dissent note to the government of Azad Jammu and Kashmir against the CWE.
The Law Department termed the dissent note “a mixture of legal, technical and commercial issues”. The Law Department’s legal opinion, which is available with The Express Tribune, further said that the contents fully cover the legal aspects involved during decision making.
“It is necessary to discuss different relevant clauses of the Credit Facility Agreement executed between the Government of Pakistan and Agence Francaise Development (AFD) on July 6, 2013 for financing of Jagran Phase-II Hydel Power Project. According to the agreement, the borrower has undertaken that each procurement to be financed by the CFA shall be submitted to the lender for its written non-objection,” the Law Department’s legal opinion reads.
The legal opinion further discusses whether the lowest bidder should be given an opportunity for hearing before being declared non-responsive, referring to whether this activity can be termed bona fide and legitimate.
The bidding documents do not postulate giving opportunity to any bidder before declaring him non-responsive, therefore, the evaluation committee was not required to provide opportunity of hearing or call information from a non-responsive bidder or seek clarification before declaring the bidder non-responsive, the legal opinion further reads.
“It is an established fact that the non-responsive bidder concealed its blacklisting by Punjab Emergency Service at the time of the bid and provided an affidavit contrary to the factual position. Though the blacklisting was subsequently quashed by Lahore High Court, concealment of facts was proven beyond any doubt and it could not be negated and disapproved, even by the high court decision.”
The legal opinion also mentioned that the AFD is authorised to cancel the loan under the CFA and is also competent to issue a warning for loan cancellation.
The decision of the PDO Board is not a minority decision because six members including the AJK prime minister supported CWE-Sachal JV and four supported Sinohydro-HRLJV. The two members who called for fresh bidding would not be treated as having voted for or against either project, the opinion explains. The official sources confirmed that the legal opinion has been sent to the AJK prime minister.
PDO has awarded the contract to CWE. The project has a completion time of 40 months.
PDO In-charge Minister Chaudhry Yaseen was the staunch supporter of Sinohydro-HRLJV, which failed to win the support of other PDO members.
The project will be completed with the financial assistance of the AFD’s 68 million euro soft loan. CWE will work with local partner Sachal Engineering Company at the Nullah Jagran, a tributary of Neelum River in Kundal Shahi, Neelum Valley, some 80 kilometres from Muzaffarabad. The project will also create around 600 jobs.
Published in The Express Tribune, July 28th, 2014.