Delay in awarding contracts for Sindh oil and gas fields: SC to take up appeal
By Mubarak Zeb Khan
ISLAMABAD, Nov 15: The Supreme Court will take up an appeal on Thursday against the delay in awarding contracts for development of two oil and gas fields in Sindh province, which the petitioners said has caused millions of dollars loss to the national kitty.
The six-month delay in the awarding of the contracts to the lowest bidder for the development of these projects resulted in a loss of $65.22 million to the national exchequer for not executing the projects on time, which may turn out to be one of the mega scandals to hit the country.
A two-member bench comprising Chief Justice of Pakistan Iftikhar Mohammad Chaudhry and Justice Saiyed Saeed Ashhad is scheduled to hear two identical appeals against the awarding of the contracts to the second lowest bidder by the Oil and Gas Development Company Limited (OGDCL) for the execution of two projects, one in Sinjhoro and the other in Tando Allah Yar.
The petitioners, Petrosin Corporation, a Singapore-based company engaged in the business of constructing and installing plants for the oil and gas industry internationally through its Pakistani co-offices, has moved the apex court against the decision of the Lahore High Court (LHC), Rawalpindi bench, which had rejected their application for the contract for being the lowest bidder through a short verbal order on September 27, 2006.
It was pointed out in the petitions that the project on being completed would cause a profit of $10.87 million per month for the government. The six-month delay in the execution of the project resulted in a loss worth $65.22 million.
The petitioners attributed this loss to the national exchequer to the irrational action on the part of the OGDC and its officials, who were responsible for causing this inordinate and callous delay in awarding the contract for the project. The process of re-tendering the project would cost the national exchequer in excess of $100 million in terms of delayed production only and in excess of $50 million in terms of rise in prices and inflation in the market, the petitions claimed.
According to the petitions, the OGDCL apparently for no reason at all slept over the matter, conscious of the enormous loss that was being caused to the national interest and the public exchequer due to the delay in execution of the contract for the SINJHORO project.
At the time of announcement of the short order by the Rawalpindi Bench of the LHC, the petitioners claimed their counsel was not present in the court as no prior notice of announcement of order/ judgment had been given to them, although one of the counsels for the respondent was present.
The petitioners on September 28, 2006 applied for getting a certified copy of the order/ judgment announced last year on September 27 but were informed that the learned judge had not written the judgment.
According to the copy of the petition, the petitioners’ bid for the award of the contract for the Sinjhoro project was by far the lowest, which arrived at $88,409,653 as against the second lowest bid of the CPECC, China consortium, which stood at $152,252,982,11.
The petitioners had been pre-qualified by the OGDCL to participate in the bidding for the development of these projects and were also declared the lowest bidder. The board of directors had also accepted the lowest bid of the petitioners for the execution of the projects.
Meanwhile, the petitioners also furnished a bank guarantee for 10 per cent of the contract price, which stood at Rs325 million and valid for a period up to October 10, 2008. The OGDCL had issued a letter of intent on April 19, 2006 to the petitioners on these two projects for $142 million.
