The Ministry of Railways and the general manager of Pakistan Railways were among those who were issued notices, for June 19, by the Lahore High Court on a petition filed by a Chinese company.
The company has challenged being blacklisted by the ministry, the cancellation of an agreement and seeking return of the down payment.
A deputy attorney general was also asked to appear on the next date of hearing.
At the last hearing, petitioner’s counsel had told the court that the company wanted to amend the bank guarantee for $15.77 million in favour of Pakistani government. He said the guarantee shall be encashable on the orders of the court or an authority appointed by the court for the just and fair resolution of the dispute between the petitioner and the government. He had sought an interim order restraining the government from demanding encashment of the said guarantee. The chief justice had observed that the assurance given by the petitioner’s counsel needed to be implemented apart from demonstrating on record the bona fides of the petitioner to establish its credibility for faithful and satisfactory contractual compliance.
Chief Justice Umar Ata Bandial had asked the petitioner to show material establishing the foregoing element to be eligible for relief. But on Monday, the civil miscellaneous petition was not taken up. Justice Bandial proceeded with the main petition and issued notices to respondents.
The company says that it was awarded a contract by the Ministry of Railway to supply 75 locomotives in 2008. As per the agreement, the Ministry made a down payment of $15.77 million. The Ministry later entered into a deal with other suppliers to procure 150 locomotives.
When the company approached the court for violation of procurement rules and lack of transparency, the Ministry began threatening to cancel the agreement, the petitioner’s lawyer said. At the request of the petitioner company, the court ordered the Ministry of Railway to re-tender the procurement of the 150 locomotives. But instead of issuing tenders again the Ministry issued a show-cause notice to the petitioner company when it refused to withdraw its petition.
On March 26, the Ministry blacklisted the petitioner company and on May 16 and June 5, the Ministry issued additional notices cancelling the agreement for the supply of 75 locomotives and seeking return of the down payment.
Published in The Express Tribune, June 18th, 2013.