SC orders fresh tender bids on coal supply to Puttalam power plant

By S.S. Selvanayagam

Chief Justice K. Sripavan in a landmark judgment on the tender bids for the supply of coal for Lakvijaya Coal Power Plant, Puttalam, taking cognisance of the procedural flaws, ordered last week to call for fresh bids.

Chief Justice with Justices Priyasath Dep and Upaly Abeyrathne, agreeing on the procedural flaws, observed that since the award of tender involved public funds, it is the duty of the court to ensure its credibility in the faith of the people.

On preliminary objections, the court dismissed the petition filed by the aggrieved Noble Resources International Ltd. of Singapore while ordering Lanka Coal Company Ltd. to terminate the contract entered with Swiss Singapore Overseas Enterprises.

Petitioner Noble Resources International cited the Minister of Power and Renewable Energy Ranjith Siyambalapitiya, its Secretary Dr. B.M.S. Batagoda, Lanka Coal Company Ltd., Ceylon Shipping Corporation, Standing Cabinet Appointed Procurement Committee (SCAPC), the Electricity Board, Technical Evaluation Committee, Board of Investment of Sri Lanka, Procurement Appeals Board, Swiss Singapore Overseas Enterprises, Members of the Cabinet of Ministers, Attorney General and others as respondents.

Romesh de Silva PC with Maithree Wickramasinghe and Sugath Caldera appeared for the petitioner. Additional Solicitor General Sanjay Rajaratnam with Senior State Counsels Yuresha de Silva and Dr. Avanti Perera appeared for the State.

Sanjeewa Jayawardane with Rajeev Amarasuriya appeared for Lanka Coal Company Ltd., Faisz Musthapha PC with Faiza Markar and Thushani Machado appeared for CEB and the TEC Chairman, Imran Mohamed PC instructed by G.G. Arulpragasam appeared for PAB, Rienzie Arasecularatne PC appeared for Swiss Singapore Overseas Enterprises and Chandimal Mendis appeared for Liberty Commodities Ltd.

The petitioner claimed its bid was the lowest and the tender should have been awarded to it in accordance with the TEC and the SCAPC was required to follow. It lamented, however, the decision to award the tender to Swiss Singapore Overseas Enterprises was ex-facie unlawful.

Additional Solicitor General raised two preliminary objections on the ground that the petitioner does not have locus standi. He submitted the petitioner company is a company registered under laws of Singapore without a local agent, representative or attorney-at-law enjoining it as a petitioner.

He also raised objection that the affidavit of the petitioner is from a director of the petitioner company who has affirmed or sworn the affidavit in Hong Kong.

The court observed that as it is essential to the maintenance of the rule of law that every organ of the State must act within the limits of its power and carry out the duty imposed upon it in accordance with the provisions of the Constitution and the law, the court cannot close its eyes and allow the actions of the State or the public authority go unchecked in its operations, in the public interest.

The court noted that if the petitioner with a good case is turned away, merely because he is not sufficiently affected or has no locus standi to maintain this application, that means that some government agency is left free to violate the law and this is not only contrary to the public interest but also violates the rule of law, the objective of which is to protect the citizens from unlawful government actions. The court dismissed the application on the preliminary objection.

The court was of the view that no one, neither the State nor the SCAPC, shall act contrary to the bid documents and the government procurement guidelines. It observed it is of utmost importance that all the necessary safeguards laid down therein should be complied with fully and strictly and any departure from them makes the evaluation process void.

It faulted the SCAPC that it cannot disregard the clauses of the bid document which specifically states that the amendments to the bid document may be done at any time prior to the deadline for submission of bids and not during the evaluation of the bids.

The court observed the SCAPC has failed to satisfy the requirements as the SCAPC directed the TEC to re-evaluate the bids ignoring steps of evaluation procedure and declared that the decision of the SCAPC to award the tender to Swiss Singapore Overseas Enterprises cannot stand valid in the eye of the law.

The court held that the act or decision of the SCAPC was outside its jurisdiction and therefore becomes null and void for all purposes.