' This writ petition, invoking the Constitutional jurisdiction of this Court, brought by M/s. Muhammad Hanif Awan and Company and three other firms of contractors, was originally directed against the Government of the Punjab (respondent No,1) and the Superintending Engineer, Incharge of Project Engineering Cell at Lahore (respondent No,2). In view of an objection having been raised by respondent No,2 about the non-impleading of necessary parties, the petitioners have, under the directions of this Court, filed an amended petition. It is now also directed against 26 firms of pre- qualified contractors, some of which, represented by Mr. D.M. Awan Advocate, have of their own accord, come forwarded at the limine stage to oppose its admission to regular hearing and they have been allowed to participate in the proceedings.
2. The grievances voiced by the petitioners herein are that they being approved category 'A' contractors of the Provincial Highway Department `without limit', could participate in the auction bids for the construction of 915-kilometre long 'Farm to Market Roads' in different districts of the Punjab with the loan of Asian Development Bank but due to the mala fides of respondents Nos.1 and 2, who are in collusion with some big and influential firms, 26 added respondents being amongst them, they (petitioners) are not being permitted to participate in the auction bids. They seek direction of this Court to respondents Nos.1 and 2 for allowing them to offer their bids for the construction of various lengths of such roads as they are fully eligible to do so.
3. The writ petition has been strongly opposed on behalf of respondents Nos.1 and 2, supported by certain added respondents through their counsel, on various grounds stated in the parawise comments filed on behalf of respondent No,1. Their main contention was that the petitioners, despite their being category 'A' contractors of the Punjab Highway Department, are not qualified to participate in the auction bids in question because, excepting Muhammad Aslam Khan and Company (petitioner No,3), no other petitioner even applied for prequalification in response to the notice published in the newspaper and they went out of the arena simply on this ground. As regards petitioner No,3, he was rejected by the consultants on account of his weak financial position and lack of adequate experience, equipment, staff and office facilities as laid down by the A.D.B. In their guidelines. It was also urged that the petitioners were category C-4 or C-5 contractors according to the categorisation of Pakistan Engineering Council and their upper limit for executing works was far less than the value of the contract of any length of roads to be constructed and for that reason too they were ineligible. Bye-laws of the Council were referred to and relied upon in this regard.
4. Learned counsel for the petitioners, reiterating and elaborating certain grounds urged in the petition, contended that the petitioners being approved `No Limit' contractors of respondent No,1, their categorisation by the Pakistan Engineering Council was meaningless and they were competent to participate in the bids. He conceded that, excepting petitioner No,3, no other petitioner could apply to respondent No,2 in response to the notice published in the newspapers for pre-qualification, but asserted that he (respondent No,2) wanted them to satisfy his illegal demands beforehand as a condition precedent to permit their participation in the prequalification exercise and they could not oblige him. He argued that petitioner No,3 had sufficient experience, skill, equipment, staff and money to discharge his contractual obligations but unfortunately he had no political backing nor official support which were a necessary prerequisite these days and which respondents Nos.3 to 28 enjoyed abundantly. He submitted that the actual cost of construction of roads per kilometre was much lower than the one pitched artificially so high by the so-called consultants in collusion with their favourites, i,e, the added respondents, who had collusively pooled together to keep the costs inordinately high with a view to reap manifold financial gains at the cost of public interest as the amount to be spent was after all a loan, may be a softer one, to be paid back to the Bank, from the public exchequer. According to him, the bids offered by some of the added respondents at the auction having taken place on 27-8-1992 in respect of four roads of varying lengths, far exceeded the minimum costs fixed by respondents Nos.1 and 2, and, as per his information, it ranged between Rs,20 to 25 lacs per kilometre. He asserted that his clients were ready to construct each and every length of road at the cost of rupees one lac less than the minimum cost per kilometer fixed by the Government. Lastly, he referred to a policy directive of the Federal Government in the Ministry of Local Government and Rural Development contained in the letter, dated 2-10-1989, addressed by the Project Director to respondent No,1 for the inclusion of 'No Limit' contractors of C & W Department in the list of prequalified construction firms for the construction of A.D.B.'s Farm to Market Roads. Placing its copy on the file, he contended that even the A.D.B. And the Federal Government were worried about the very high bids due to the poor bidding response despite large number of prequalified contractors and to bring them down they stressed the need for the participation of 'No Limit' contractors of C & W Department in the road construction bids. He lamented that despite these directives, respondents Nos.1 and 2, through their handpicked consultants, are restricting the construction contracts, to a few favourites and only three-four contractors have, under the pool system, offered the exorbitant bids at the auction held on 27th ultimo.
5. Learned counsel appearing on behalf of some of the added respondents, as also respondent No,2, refuted certain allegations of the learned opposing counsel concerning illegal demand bf money, exercise of political pressure and official favour, collusive pool and inordinately high bids.
They submitted that three out of four petitioners did not even apply for prequalification and one who applied, had no means to execute even a smaller contract and now they. Were unnecessarily raising hue and cry in order to disrupt the works being financed by an international financial institution with an interest free loan carrying only one per cent service charge, for the benefit of backward areas in the Punjab and the poor agriculturists inhabiting them. They urged that due to the price hikes and inflation, the cost of construction had risen manifold and for that reason the bids were high. Respondent No,2, however, promised to persuade the lowest bidders to further decrease the bids to the level of the minimum cost per kilometre assessed and fixed by the consultants. Finally, he submitted that Asian Development Bank was the final authority as all the bids offered for various roads in all the four provinces were to be sent to them at Manila for approval and only those roads would be constructed, the bids whereof would be approved by them (A.D.B.).
6. In support of the above contentions, various documents were referred to by respondent No,2 and the learned counsel for certain respondents, some of them in response to the Court queries.
7. First of all I take up the legal objection raised on behalf of the respondents against the eligibility of the petitioners as contractors on the basis of their low categorisation by the Pakistan Engineering Council. The perusal of their licences issued by the Pakistan Engineering Council indicates that some of them are category C-4 while others are category C-5 contractors. They can handle those construction works, the costs whereof do not exceed Rs,20 and 10 millions, respectively, while the cost of each length of 'Farm to Market Road' is said to be more than Rs,20 lacs. There may be some substance in this argument on factual plane but in view of the legal position, that has finally emerged during the course of discussion and has eventually been conceded by the respondents' counsel, the Pakistan Engineering Council has no lawful authority to make categories of contractors because the bye-taws framed by it for such categorisation are ultra vires of the Pakistan Engineering Council Act, 1976. The bare reading of the Act, particularly sections 8 and 25 thereof, makes the legal position clear and a Division Bench judgment of Karachi High Court in Constitution Petitions No,D-70/1988, D-183/1988 and D-233 of 1988, dated 10-8-1989, makes the matter further clear. So the Pakistan Engineering Council has nothing to do with the categorisation of the petitioners as contractors and the respondents' objection in this regard is overruled.
8. The next contention of the respondents' counsel was the failure on the part of petitioners Nos.1, 2 and 4 to apply for prequalification in response to the notice issued by respondent No,2. The petitioners' counsel tried to meet it by blaming respondent No,2 for putting forth some illegal demands but it was only a ruse. If petitioner No,3, who was of their level and status, could make an application for prequalification, they could also do so but they purposely omitted to apply and later joined hands with him (petitioner No,3). They had missed the bus and had to lag behind on account of their own lethargic conduct. They, therefore, go out of the scene on this ground alone..
Only petitioner No,3 shall stay in the field for contest with his opponents.
9. Now I take up the contention of the petitioner's counsel regarding his client's helplessness on account of lack of political support and official favour, the weightage of respondents Nos.3 to 28 for these factors, their alleged pool inter se and exorbitantly high bids in collusion with the consultants and respondents Nos.1 and 2. During the course of argument, respondent No,2 could not satisfy me as what was the need for employing four consultants for carrying out the consultancy work, if at all the employment of consultants was necessary, and why one consultant was not enough. He could not furnish any plausible explanation either, except the poor excuse of the dearth of engineers and consultants in his department, when I asked him as to why his department (C&W), which, being the successor of old PWD, was about one-and-a-half century old, and having an army of well qualified engineers, surveyers, designers, draftsmen and consultants, could not design and supervise the construction of a few village roads known as 'Farm to Market Roads', requiring no special skill and expertise, especially when his colleagues have been designing and constructing hundreds of such like roads in these very areas over the decades and even now they continue to plan, design and construct such roads at much cheaper rates, almost at one-fourth of the costs per kilometre of the roads now proposed to be constructed with Asian Development Bank loan. Eventually he could say nothing except that it was the requirement of the loan giving agency as per contract document and their instructions on the subject. If every thing from start to finish is to be done by the private firms of consultants and the Asian Development Bank, then what remains the role of the Federal and the Provincial Governments, who contracted the loan and after utilizing it, are bound to pay it back to the Bank? If their position in the contract and its enforcement is reduced only to that of helpless onlookers, I am afraid, it would affect even the sovereignty of the State. In that case, even the C&W Department, which figures prominently in the contract as a loan utilising agency, manned by hundreds of qualified consultants and experienced engineers, is also reduced to the position of a nonentity in the execution of the project. In that event, its function will be only to the calling of tenders and forwarding the bids to Manila for approval after selecting through an artifice a few big contractors, allegedly having the covert support of some high-ups in the political and bureaucratic hierarchy having a share in the booty, after artificially increasing the costs of the project manifold.
This could not have been the intention behind the loan contract, nor it seems to be. C&W Department has to play an important role in the entire scheme as the loan utilizing agency and respondent No,2 appears to have minimised its role with a view to avoid the onerous responsibility of the honest and efficient execution of the contract by. Proper utilization of the loan. The consultants seem to be its own selectees and the prequalified contractors its own men. It is unfair to throw the entire responsibility and consequently the whole blame on the A.D.B. Which may not be aware of certain machinations and devices prevalent in this branch of commercial activities in our country, but if they are aware and still they do not take steps to rectify the situation, then they will have to share the blame to the extent of their contractual liability. From the letter, dated 2-10- 1989, of the Project Director addressed to respondent No,1, for the inclusion of 'no limit' contractors of C&W Department in the prequalified construction firms, one rather gathers the concern of A.D.B.'s Mission for poor response of prequalified contractors, hinting at their high bids on account of collusive pool amongst them. It was at the behest of the A.D.B. That category `A' or 'no limit' contractors of C&W Department have been made eligible for prequalification to bid for 'Farm to Market Roads' but it appears that C&W Department itself is trying to discourage them by different devices, perhaps with a view to oblige a chosen few, may be under some outside pressure or for extraneous consideration.
10. As we often gather from the International Press, huge commissions and kickbacks in international dealings are coming to surface, especially where developing countries are concerned. Such like scandals involving high-ups are not uncommon even in our country.
Therefore, the possibility of this malpractice having crept in the execution of this contract cannot be altogether ruled out, especially when the minimum cost per kilometre of the roads to be constructed as assessed by the consultants and the bids being offered by the prequalified contractors in somewhat dubious manner, are going sky-high as it appears from the information supplied by respondent No,2. Out of four 'Farm to Market Roads' auctioned for construction on 28- 8-1992, the minimum cost per kilometre assessed by the consultant in respect of Ladha Bohar- District Boundry Vehari having length of 26-72 k.m. Was Rs,20,44,048 and the lowest bid offered by one, out of only three contractors participating in the auction was Rs,27,64,320. The minimum cost per kilometre assessed by the consultant in respect of Dulla Nasheel-Khokharwala road in District Layyah having 16 kilometre length was Rs,23,01,950 and the lowest bid offered by one out of four contractors was Rs,28,40,862. Same was the position of two other roads.
11. Asian Development Bank loan is no doubt an interest-free loan and people should be grateful to this institution for their uplift but all it has to be paid back by them. Therefore, it has to be spent for their maximum benefit and should not go to the pockets of a few privileged individuals or group of individuals. The tax-payers and the masses groaning under indirect taxation, are to ultimately share this entire burden, and their hard-earned money going to the national exchequer should not be wasted, squandered away or misappropriated.
12. There is no direct proof of political influence and official favour in the pre-qualification of contractors (respondents Nos.3 to 28) nor there can be any as it is something highly secretive and collusive but during the hearing certain abnormal features have come to light which raise the eyebrows of an ordinary prudent man and an impartial observer. These unusual features are as under:--
(i) Engagement of many private firms of consultants in preference to the equally, if not higher, qualified and experienced consultants and engineers of the C&W Department (which is a loan utilizing agency) besides hundreds of well qualified unemployed and agitating engineers whose services could conveniently be availed of.
(ii) Unsatisfactory method, more based on guesswork and arbitrariness than on any solid data on uniform basis, adopted by the consultants in assessing the eligibility or prequalification of the contractors. For instance, while assessing the eligibility of petitioner No,3, one consultant out of 100 marks gave him 45 marks, the other 26 marks, yet another 44 marks, and the fourth one 17 marks.
(iii) Arbitrariness of respondent No,2 in fixing 60% minimum aggregate qualifying marks to be obtained by each contractor for being eligible or pre-qualified for participation in the bid.
Respondent No,2 could not explain as to why he had fixed 60% qualifying marks or 60% marks to be obtained by each contractor from at least two consultants. It was his own self-devised standard or formula, having no basis or rationale behind it. He could use this so-called formula for including anyone in the fold of prequalified contractors or excluding anyone at his will.
(iv) Inordinately high cost per kilometre length of the proposed roads assessed by the consultants and unreasonably high bids offered by a small number of contractors as compared to similar roads being constructed by the C&W Department in the same areas with the same specifications.
For instance, the normal cost of a village road or 'Farm to Market Road' being constructed by C&W Department or, for that matter, by the District Councils in the Province is Rs,500,000 to Rs,600,000 per k.m., while the cost of the proposed roads to be constructed by A.D.B. Loan is in no case less than Rs,20,00,000, obviously four times greater, for no earthly reason. In this connection the NESPAK evaluation pro forma filled up by petitioner No,3, which has frequently been referred and relied upon by respondent No,2 and the counsel for the respondents, indicates the construction of Hussainwala-Chidhroo (District Mianwali) seven miles long road being constructed by this firm for a contract of Rs,41,00,000 to be completed in April, 1992.
(v) Unnecessary documentation and correspondence using high sounding and technical phrases, formalities, meetings and conferences in C involvement of personnel and parties, all augmenting the cost of construction and loan liability.
(vi) Non-compliance of the policy directives of A.D.B. And of the Federal Government regarding the inclusion of large number of 'without limit' contractors of C&W Department, particularly the Government owned or controlled construction firms, with a view to decrease the cost of construction per kilometre.
' Now I come directly to the question of eligibility or prequalification of petitioner No,3. He is no doubt 'without limit' approved contractor of the C&W Department of the Provincial Government and he can participate in the prequalification contest but it is not understandable that once he was, like many other contractors, categorised as 'without limit' or category 'A' contractor of C&W Department, what was the dire necessity of his going through rigours of further prequalification.
Anyhow, if his qualification be seen in the light of various standards laid down by the consultants, he does not come up to the mark. As per Evaluation Pro forma of NESPAK filled by him, he has no regular office nor any telephone connection. His financial position is also not very sound as he has only Rs,30,00,000 in cash at his disposal. It is only the cost of one or one-and-a-half kilometre of the road assessed by the consultants (though, as already indicated, a highly unreasonable one).
This being so, he may not be able to cater for the construction of even the shortest length of `Farm to Market Road' proposed to be constructed by A.D.B. Loan. Therefore, the writ petition, subject of course to the abovementioned observations, is dismissed in limine.