SHC gives KWSC two months to decide on hydrant operations

KARACHI: The Sindh High Court has directed the Karachi Water and Sewerage Corporation (KWSC) to take a final decision within two months on whether to hold a fresh auction for six hydrants in the city or adopt any lawful interim arrangement under the applicable rules and policy.

A two-member constitutional bench comprising Justice Adnan-ul-Karim Memon and Justice Muhammad Hasan Akber issued the directions while disposing of a petition filed in January this year. The petition had challenged the continued operation of hydrants without a new bidding process and sought orders for a fresh auction.

The court, however, declined at this stage to declare the existing arrangements unlawful. It held that intervention by the court would be premature because the competent authority had not yet reached a final determination on the matter.

Court stresses transparency and hearing of stakeholders

In its order, the bench said any decision by KWSC must be made after giving the petitioner and all other stakeholders a proper opportunity of hearing so that the process remains transparent and fair.

The court also said that if any arrangement has continued beyond the expiry of the contract period, and is not strictly supported by lawful authority, it must be regularised through a transparent and reasoned decision that protects public revenue and public interest while ensuring that no party is arbitrarily excluded.

The order further required the competent authority to issue a speaking order setting out the reasons for its decision and addressing questions related to transparency, continuation of the current arrangements and the future bidding process.

The bench clarified that until a final decision is taken, the matter will remain within the domain of the competent authority, but this should not be treated as approval of any arrangement that may be found contrary to law.

Petition challenged continuation after expiry of contracts

The petitioner, a private firm and contractor, had named the local government secretary, the KWSC chief executive officer and various contractors as respondents. According to the petition, the last auction for the hydrants was held in 2023 and the two-year contracts expired in May last year, but the same contractors continued operating the hydrants without a fresh auction or a lawful competitive process.

Counsel for the petitioner argued that the auction process had historically been affected by cartelisation and collusion, alleging that the same contractors had repeatedly obtained hydrant contracts over the past 15 years by bidding only slightly above reserve prices, thereby limiting competition and causing losses to the public exchequer. The petitioner’s lawyer also maintained that the contractors had continued operations for around a year after expiry of the contracts without lawful authority.

Lawyers for two contractors objected to the maintainability of the petition and argued that it rested on mistaken assumptions, selective facts and unsubstantiated claims.

KWSC says matter under examination

Counsel for the water utility told the court that after deliberations, the KWSC board had decided to further review the financial, operational and legal dimensions of the issue before taking a final decision, and that such a conclusion would be reached within a reasonable time.

After hearing the parties and examining the record, the bench noted that the hydrant contracts had originally been awarded through a competitive bidding process in 2023 and that no challenge had been brought against that process at the relevant time.

"Allegations of cartelisation and collusion remain general in nature, unsupported by an adjudication by a competent forum under the relevant legal framework, and thus cannot be accepted at this stage in constitutional jurisdiction," the court said referring to the petitioner’s allegations.

"In such circumstances, judicial interference at this stage in the form of declaring the existing arrangement unlawful would be premature, particularly where the competent authority has not yet finally adjudicated the issue," the bench further observed.

While disposing of the petition, the court directed the respondent competent authority to positively finalise its decision within two months regarding a fresh auction or any lawful interim arrangement in accordance with the relevant rules and policy.