Cancellation of contract with Chinese company

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LAHORE: The Lahore High Court on Monday issued notice to the Ministry of Railways on petition of a Chinese company, seeking the courtís intervention for setting aside cancellation of contract for supply of 75 locomotives and governmentís order of declaring it blacklisted.

Chief Justice Umar Ata Bandial also issued notices to the Railways general manager and other officers besides sought assistance from a deputy attorney general on June 19.

The company, Dongfang Electric International Corporation, through its representative, Sun Zhenping, filed a writ petition and argued that it had entered into an agreement with the Pakistan government for supply of 75 locomotives in 2008 which the government terminated on May 16, 2013.

Under the agreement for establishing its bona fide, the tendering firm was obliged to deposit with a credible and creditworthy bank the advance payment of $15.77 million made by Pakistan in June 2009. Pakistan government had also served a notice to company for return of down payment.

On previous hearing, the petitioner-company sought a stay order against demand of Pakistani government for getting back the bank guarantee but the court had declined its request, requiring it to prove its credentials first.

The China-based firm pleaded the federation through secretary (railways), chairman of Railway Board, Lahore, director (procurement), Islamabad, general managers (operation and manufacturing) as well as Public Procurement Regulatory Authority as respondents.

Courtesy: †The News

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