The Supreme Court (SC) on Thursday declared former prime minister Yousaf Raza Gilani’s approved Safe City Project for Islamabad and Peshawar “non-transparent, illegal and invalid”.
A three-member SC bench headed by Justice Nasirul Mulk announced the detailed judgment. According to the verdict, the entire exercise of the project appeared to be farcical and it was a “classic case” of pleading the law to defeat the law. The SC asked National Accountability Bureau (NAB) Chairman Admiral (r) Fasih Bokhari to take legal action against the scam, which involves high-ranking government officials, including former premier Gilani, who was ousted from his office after he was found guilty of contempt by a Supreme Court bench.
The project’s contract was approved on December 29, 2009, and included procurement of goods, equipment and services to establish a command center and network to counter terrorism, initially in Islamabad at a total cost of $124,719,018. The project, referred to as Islamabad Safe City Project, was proposed by the Interior Ministry, and its attached department National Database Regulatory Authority (NADRA).
During the summer of 2009, Chinese Company M/s Hauwei Technology Company Limited approached NADRA, offering to implement and execute a comprehensive surveillance and monitoring system for security in Islamabad. NADRA claims to have informed its parent ministry regarding the offer made by the company. The NADRA chairman discussed with the interior secretary the possibility of obtaining a long-term loan from the Chinese government or the Export-Import Bank of China, whereupon the Economic Affairs Division was activated by the Interior Ministry for the allocation of a concessional loan from China.
Later, in January 2011, a citizen challenged the contract in the SC, alleging that the entire transaction had been carried out in an illegal and unlawful manner, and causing a huge loss to the national exchequer. The petitioner argued that a similar project was undertaken for Karachi in 2008-2009 at a total cost of $8 million. After several hearings, the court reserved its verdict on Thursday. The judgment, authored by Justice Sheikh Azmat Saeed, said that the entire transaction was carried out in a “non-transparent manner”, and at an apparently inflated cost.
The SC ordered the government to reinitiate the process for the procurement of the required equipment, software and services in a fair, just, rational and transparent manner, strictly in accordance with the provisions of the Public Procurement Regulatory Authority (PPRA) Ordinance, 2002, and the Public Procurement Rules, 2004.
“Needless to say that the respondent company would be at the liberty to participate in such de novo process of procurement,” the court order mentioned. “The contract dated 29 December, 2009, is illegal and invalid having been executed in violation of the mandatory provisions of the Public Procurement Rules, 2004, as the exemption there from purportedly granted under Rule 42 (c)(v) was based on extraneous and irrelevant reasons and therefore of no legal effect or consequence,” read the judgment.
“In fact, it has been indicated to us that various other Chinese companies were in a position to offer similar goods and services. The entire market, both national and international, was never taped. There was admittedly no conscious application of mind at the time of the grant of the approval by the prime minister that Rule 5 or 14 or both were applicable to the transaction in question,” the order added. The court order further stated that even as per the report of the Planning Commission referred to in the summary to the prime minister dated June 7, 2010, the net present value of the project was $72 million, while the contract had been awarded for a total amount of $124.7 million.
Furthermore, all government departments and relevant authorities other than the Interior Ministry repeatedly indicated that the cost of the project was at least three times higher than the value of the equipment being supplied. They added that the contract in question was executed on December 29, 2009, when the PC-I had not even been prepared.