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LED project: CDA chief asked to submit affidavit

May 25, 2012

ISLAMABAD, May 25: The Islamabad High Court (IHC) on Friday directed Chairman Capital Development Authority (CDA) Farkhand Iqbal to submit an affidavit to the court by Monday on the transparency of the Rs6.8 billion project for installing 65,000 light emitting diodes (LED) in the streets of the city.

Justice Mohammad Azim Khan Afridi passed the orders while hearing a petition filed against the LED project by advocates Mohammad Naseem Khan and Shajjar Abbas.

The petitioners told the court that a ‘letter of intent’ had been issued to M/S Oslo Lighting Solutions and alleged that the award of contract was under the shadow of illegal orders of the prime minister and the prime minister’s task force on CDA. The petitioners alleged that the award might cause over Rs6.8 billion loss to the national exchequer.

They said the contract had been awarded bypassing the CDA Board and in violation of the recommendations of the Planning Commission.

The CDA in February 2, 2010, invited proposals from local and international firms or joint ventures to provide cost-effective solution for replacement of streetlights with the LED technology or other energy efficient solutions to reduce the high energy cost.

In response, six firms filed their proposals out of which MS Oslo Lighting Solutions, Siteco and Infracon were short-listed. The petitioners said a high-level official of the CDA in one of its meetings had observed that none of the firms had conformed to the criteria laid down by the authority.

The petitioners said the Asian Development Bank (ADB) had offered to fund the project to the tune of $70 million on the condition that its financial support would be subject to satisfaction in respect of the “policy, financial, technical, contractual and legal aspects of the transaction.”

The CDA then approached Public Procurement Regulatory Authority (PPRA) and told them that MS Oslo had given “the most viable and workable financial model” and Siteco offered the “lowest cost” but PPRA asked the civic agency to accept lowest evaluated bid.

The petition said the ADB refused to finance the project as the CDA accepted the bid of MS Oslo. The CDA then approached the Central Development Working Party and the Planning Commission for approval of the project. The Planning Commission raised a number of objections to the project, including its high price, financial rate of return, transparency and advised the CDA to first launch a pilot project.

The CDWP raised certain objections and issued directions to the CDA but the authority did not adhere to them.

The petitioners requested the court to stop the CDA from executing the project until or unless the authority satisfies the court that the project was transparent and in accordance with the PPRA rules.