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Letter of intent to Norwegian firm suspended

The Islamabad High Court (IHC) on Wednesday suspended a letter of intent (LOI) issued to a Norwegian power company (Rain Power) by the Water and Power Development Authority (Wapda) for the construction of a Rs7.35 billion hydropower project.

The proposed Golen Gol power project is located in Chitral and is expected to add 106MW electricity to the national grid.

The IHC division bench, comprising Justice Riaz Ahmed Khan and Justice Noorul Haq N. Qureshi, on Wednesday issued the order against the awarding of the contract for the project after hearing preliminary arguments of a petition.

The petition was filed by Mohammad Shafiq Swati, the president of Centre for Empowering Society (CES).

Hashmat Habib, the petitioner’s counsel, adopted before the court that the federal government had invited tenders for the Golen Gol project on June 30, 2011.

He said the consultant appointed by Wapda had evaluated the tenders and found that all bidders had deviated from the original terms of the tender.

Therefore, a Wapda committee was constituted to review the consultant’s evaluation report.

The counsel said Wapda authorities on April 12, 2013 terminated the bidding after the media highlighted alleged irregularities in the process adopted for awarding the contract.

The authority then called for fresh bids and the parties obliged.

However, according to Mr Habib, the parties were kept waiting for months as Wapda did not announce the name of the successful bidder.

Meanwhile, the counsel said Wapda, without announcing the name of the successful bidder, issued the LOI to Rain Power on October 16.

He maintained that Wapda had suddenly scrapped the new bids for the project and had issued the LOI to the Norwegian firm.

The petition against the issuance of the LOI was then filed in the IHC on October 26.

Two days later, on October 28, Wapda published an advertisement stating that the successful bidder would be announced on November 11, the counsel said.

According to the petition, Transparency International Pakistan (TIP) and National Accountability Bureau (NAB) had also pointed out violations of the procurement rules in the tender process.

The petition contended that if the contract was awarded in violation of the procurement rules, it would set a bad precedent.

The petitioner therefore requested the court to declare the LOI illegal.

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