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WB declines to discuss Dasu dam issue with Chinese firm

WB declines to discuss Dasu dam issue with Chinese firm

ISLAMABAD: The World Bank has informed a state-owned company of China, which has accused the international lending agency of forcing the Pakistani government to disqualify it from procurement process for the construction of the first phase of the 4,320MW Dasu hydroelectric project, that it cannot discuss the matter at this stage because the process is still under way.

Under the relevant procurement policy, the bank is barred from entering into any discussion or correspondence about the ongoing procurement process until the borrowers — the government and the Water and Power Development Authority (Wapda) — notify the award of contracts for the project, the bank said in a message sent to the Power Construction Corporation of China Ltd (PCCCL).




The Supreme Court is seized with a petition moved by the PCCCL, seeking a direction for Wapda not to make public results of the prequalification process for the construction of the project on the Indus, in Kohistan district of Khyber Pakhtunkhwa.

During the last hearing on the matter on Sept 2, the court had allowed the federal government to approach the bank for timely disposal of a pending petition of the Chinese company about the award of the project’s contracts.

The PCCCL had filed the petition through a letter to the bank on Aug 26, expressing concern over the prequalification process for contracts under the project, that too on the direction of the apex court, against Wapda’s decision to oust it from award of contracts for the civil works of phase-1 of the project.

In response, the World Bank explained to the company that the procurement process for the two contracts was still under way and therefore it could not discuss the issue now.

“If, after notification of contract award, the [Chinese] company is not satisfied with the borrowers’ written explanation regarding its disqualification from the procurement process of MW-1 and MW-2 and wishes to seek a debriefing meeting with the bank to discuss the company’s application, it may do so at that time,” the letter issued by the bank’s team leader for the project said.

In 2014, Wapda had announced the launch of the power generation project for which the International Development Association — a part of the World Bank Group — approved financing for its phase-1 with a credit of $588.45 million.

In August 2014, Wapda’s project director for the dam issued a document inviting applications for prequalification from interested parties for the construction of the main works-I (MW-I), including main hydraulic structure, spillway, low-level outlets, river diversions and hydraulic steel structures, as well as for MW-II, including underground power complex, tunnels and hydraulic steel structures.

On March 30 this year, the project director disqualified the Chinese firm from prequalification for MW-I and MW-II, which the company claimed was done on the “dictation” from the World Bank.

Represented by Advocate Salman Aslam Butt, the petition moved by the Chinese firm had challenged in the Supreme Court the June 29 intra-court appeal in the Lahore High Court in which the petitioners’ request to suspend the operation of its disqualification had been rejected.

In its petition before the apex court, the PCCCL had argued that non-interference on part of the high court in the face of “manifest illegality and denial of the petitioner’s fundamental rights” to equal protection of the law and due process could not be sustained under the law.

The disqualification of the company “on account of dictated exercise of powers” qualified as an arbitrary exercise of executive authority and therefore liable to be set aside on this ground alone, the petition had argued.

The company said that it was a state-owned enterprise with almost 30 subsidiaries and was active in the industry since the 1950s, besides being responsible for more than 65 per cent of China’s hydropower projects, including the world’s biggest hydropower project — the Three Gorges Hydropower Project.

Published in Dawn, September 11th, 2016

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