KARACHI, Jan 20: A judge of the Sindh High Court has held that a tender must be unconditional and the person by whom the tender was made must be able and willing to perform his obligations.

Justice Shabbir Ahmed stated this in a judgment while dismissing the plaintiff’s plea in CMA 8190/2001 and giving guidelines for such tenders pertaining to public-interest projects, particularly those to be built on BOT basis.

Plaintiff Puri Terminal Limited, represented by Tufail H. Ebrahim, had prayed that till the final disposal of suit 1489/2001, the defendants No 1 and 2 be restrained from awarding the contract to the defendant No 3.

The Federation of Pakistan and the Port Qasim Authority were defendants 1 & 2 and FWQ Enterprises (Pvt) Ltd is the third defendant.

In pursuance of the privatization policy, the Port Qasim Authority, interested in liquid cargo terminal had invited bids to participate in the said project on Build-Operate-Transfer (BOT) basis and advertised inviting tender in 1995 and, subsequently, re-advertised in 1996-97, which remained un- responded. The project was re-advertised in the press on 7. 6. 1998 and its validity period was subsequently extended up to 15. 9. 1998.

It was the case of the plaintiff that its bid was, prima facie, much better than that of the defendant No 3, but both the bids were referred for detailed evaluation to NESPAK, the consultants of the defendant No 2. It was the case of the plaintiff that NESPAK, after evaluation, recommended the defendant No 2 to consider the bid of the plaintiff’s and negotiate with the plaintiff over financial parameters vis-a-vis the revised rates of tariff and royalty submitted subsequently by the defendant No 3.

It was also the case of the plaintiff that the entire process of evaluation of the bids by the defendant No 2 was mala fide and non-transparent inasmuch as Bashir Jan Muhammad, the chief executive of the defendant No 3, was also on the board of the defendant No 2, and was in a position to influence the decision of the defendant No 2.

It was alleged that the defendant No 2, in a clandestine manner, placed the revised bids for evaluation without giving any opportunity for the same to the plaintiff. The defendant No 2 had deliberately and contrary to the recommendation of NESPAK manoeuvred unscrupulously and eventually to award the contract to the defendant No 3.

The plaintiff in the suit had sought to declare that the bids submitted by the plaintiff the best, and therefore the defendant Nos 1 and 2 were specifically liable to award of the contract to the plaintiff as invited by the defendant No 2; (ii) declare that the defendant No 2 had acted arbitrarily, unfairly and illegally and the procedure adopted by the defendant No 2 in evaluating the bids and in particular the revised bids of the defendant No 3 was not fair, equitable and transparent.

Justice Ahmed observed that liquid cargo terminal on BOT basis had to be established for which the sponsors must be of sound financial position. The plaintiff claimed that its financial position was sound.

Represented by Irfan Puri the plaintiff, while replying to a question about their share in financing the project, had informed that they would float the shares to the public through stock exchange and also would approach the financial institutions as mentioned in the proposal.

In case they did not succeed, they would arrange finances through their own sources. They could not disclose such sources during the meeting. On a query about any commitment from the bank to provide funds, M/s Puri informed that they would get it in due course of time.

As regard the financial status of the defendant No 3, entire foreign exchange component (65 per cent of the project cost) were to be arranged by FELDA Malaysia and the local component by Westbury Pakistan. They had also produced letters from banks guaranteeing to provide required loan and thereafter did not contain any condition.

Justice Ahmed held that the tender must be unconditional and the person by whom the tender was made must be able and willing to perform his obligations. In the present case, he held that the plaintiff’s tender was conditional though the counsel for the plaintiff contended that such were “reservation” and “exception.” He also referred to the meaning of the two words in the Black’s Law Dictionary.

He held that “exception” would amount to condition, therefore the tender by the plaintiff could not be treated as unconditional. From their own documents, he observed that the plaintiff’s financial status was not sound. Such a plea, if accepted, would put the project to uncertainty.