ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved an amount of Rs 1.72 billion to be paid to M/s Huawei, as per the contract. The Interior Ministry has been directed to conduct an inquiry and file an Intra Court Appeal (ICA) against the Law Ministry’s advice.
Sources informed Newzshewz that on January 6, 2025, the Interior Division briefed the forum about the Safe City Project in Islamabad. The agreement for the project was signed between the Ministry of Interior and M/s Huawei Technologies Co. Ltd. on December 29, 2009. The total value of the Safe City contract was $124.719 million, of which $118.549 million was paid using a concessional loan provided by the Government of China through the Exim Bank of China. However, the remaining 5% payment (i.e., $6.170 million) has yet to be paid.
The Exim Bank of China’s loan expired before the final inspection and handover of the project, preventing the payment of the remaining 5%. As a result, M/s Huawei Technologies Co. Ltd filed a Writ Petition in the Islamabad High Court for the outstanding payment. On October 12, 2023, the Islamabad High Court ruled that the Ministry of Interior had unduly delayed the payment without justification. The court ordered that the Finance Division and the Economic Affairs Division assist the Ministry in clearing the liability.
The Ministry of Interior subsequently filed an Intra Court Appeal (ICA) on December 14, 2023, but the court dismissed the appeal.
The Interior Division also briefed the forum that, at the Ministry’s request, the Economic Affairs Division (EAD) approached Exim Bank of China to extend the loan validity so the liabilities could be settled. However, Exim Bank informed them that extending the loan agreement was not possible. Following the High Court’s directions, the Ministry of Interior requested the Finance Division to release the payment for M/s Huawei Technologies. The Finance Division, however, returned the case, directing the Ministry to follow the procedure outlined in the ECNEC decision of April 6, 2023, for clearing pending liabilities of closed projects.
As per this directive, the Ministry submitted a position paper to the PD&SI Division for the consideration of the CDWP on November 12, 2024. The CDWP reviewed the paper and decided that the Ministry of Interior should coordinate with the Finance Division to clear the pending liabilities, in compliance with the Islamabad High Court’s decision.
The Interior Division informed that the Finance Division has now endorsed the CDWP’s decision and advised moving a summary to the ECC for approval of the payment of the outstanding liabilities—$6.170 million (equivalent to Rs 1.721 billion) to M/s Huawei Technologies Co. Ltd. under Demand No. 61, Islamabad Capital Territory (ICT), as directed by the Islamabad High Court.
The Interior Division requested the ECC to approve a Technical Supplementary Grant (TSG) of Rs 1.721 billion for the clearance of M/s Huawei’s pending liabilities, in compliance with the CDWP’s decision and the court’s orders.
During the discussion, the forum noted that the case had been submitted to the ECC following the Islamabad High Court’s order, which had also been upheld by the Appellate Court. It was noted that the payment to the vendor had been delayed by five years after the contract’s expiry. The forum also questioned the rationale behind challenging the court’s order, contrary to the advice of the Law & Justice Division. The Finance Division supported the proposal, emphasizing that the Ministry of Interior would decide on the payment process and resolve the matter with the vendor.
After a detailed discussion, the ECC approved the proposal for the TSG of Rs 1.721 billion, with a directive for the Ministry of Interior to review its internal legal processes. The Ministry should clarify why it pursued the ICA against the advice of the Law and Justice Division and submit a report to the ECC in its next meeting. The ECC further instructed that the Ministry of Interior resolve the matter with the vendor at its own level.
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