KARACHI, Aug 8: A petition in which the government has been accused of mala fide and irregularities in awarding contract for the Mazarani Gas Field project to a firm which has the federal minister of commerce and his family on its board of directors, came up before the Sindh High Court on Thursday.

The matter was fixed before a division bench, comprising Justice Zahid Kurban Alavi and Justice Ghulam Rabbani, in which the petitioner, Petrosin Engineers & Contractors PTE Ltd, has made the federation, through the secretary ministry of petroleum and natural resources, Islamabad, M/s Pakistan Petroleum Ltd (PPL), M/s Descon Engineering Ltd (Directors A. Razzak Dawood, Minister of Commerce, and his family), and M/s Presson Manufacturing Ltd are respondents.

When the matter came up after tea break, Barrister Zahid Jamil appeared on behalf of the petitioner to argue the entire petition levelling charges of corruption, undue influence, favouritism and mala fide which, according to him, has caused a total loss of 2.8 million Us dollars to the national exchequer.

He argued that the PPL (respondent No 2), being a government functionary, had violated government rules, its own rules and the law by committing grave irregularities, both of procedure, financial tampering and favouritism in the tender for the Engineering Procurement Construction and Commissioning Contract for the Mazarani Gas Field Project.

He alleged that despite the petitioner being the lowest bidder by a difference of 1.6 million US dollars (for a project cost of 4.2 million US dollars), between the petitioner and the respondents company, the contract was illegally and malafidely awarded due to alleged influence and clear financial and procedural deviations, violations of the tender documents and the law, to a company in which the minister of commerce and industry and his family members were directors.

He stated that in the tender there was a two envelope bid system: first for technical evaluation, and second, for commercial evaluation.

He alleged that the PPL, while evaluating the parties on their technical bids, illegally opened the commercial bid in their absence in order to collusively with the respondent’s try and oust the petitioner under undue influence and award the contract to the respondent of which the minister of commerce and industry and his family were directors.

The respondent company on whose board of directors are the minister of commerce and his family members, was represented by Lahore-based Dr Parvez Hassan, who rebutted the allegations of the petitioner.

He submitted that in fact a major portion of the work had already begun on the project and as such the petition should be dismissed since it was infructuous and since third party rights had been created.

He argued that though the Minister of Commerce, A. Razzak Dawood, was a director, there was no mala fide and the bidding process was legal and these allegations would result in holding up the project. He stated that if it became a practice to entertain such ‘flippant allegations’ it would end up holding up the economy. Barrister Sajid Zahid represented the PPL.

Barrister Jamil argued that in fact there was no evidence on record of any such substantial work having been done, and in fact this was designed to eventually make the case infructuous and deprive the petitioners of their remedy and cover up the illegalities committed by the government-owned PPL to favour the federal minister’s company.

In fact the respondent company had violated the specific terms of the bid to provide at least 30 per cent locally-manufactured machinery and was in fact importing the entire plant from abroad by evading custom duty and causing a loss of one million US dollars to the government and additionally increasing unemployment and depriving commercial contracts to the local industry, he argued.

It is the case of the petitioner that the impugned order of July 1 and the award of the contract to the respondent Nos 3 and 4 was illegal, void, contrary to law, natural justice and breach of terms and conditions, express and implied, of the tender documents, invitation of tender and other representations made by the respondent No 2.

Acceptance of technical and commercial bids of the petitioners had created a vested right in the petitioners, inter alia, on the doctrine of “promissory estoppel” which furnished cause of action to the aggrieved person. The respondents had made a clear and unequivocal promise to the petitioner of their intent to create legal relationship, which now constituted, was a binding promise and the respondents were not entitled to back out of it.

Because of paucity of time the matter was, by consent, adjourned to Aug 13.