11 November 2008
Western Cluster Iron ore project bidding process which was won by Delta Mining Company, a South African concessionaire that the government recently revoked without justification has now been subjected to final hearings in two weeks.
According to a decision of the Public Procurement and Concessions Commission (PPCC), the government is ordered to stay all proceedings or action in the re-bidding of the Western Cluster Iron Ore Project in Liberia, which would have nullified the previous decision that empowered Delta Mining to carry out the contract.
The commission reasoned that the government In February 2008, had announced that Delta Mining Consolidated (Delta) was the provisional winner of the Western Cluster Iron Ore concession in Liberia but revoked that decision unilaterally in September 2008.
Commissioners ruled that after awarding the concession to Delta, which followed the fact that, the company had undergone independent due diligence process conducted by Deloitte and Touche as required under Liberian law, Delta was found to be the most suitable bidder.
The PPCC also saw that following the due diligence process, the Ministry of Lands, Mines and Energy again recommended for Delta be awarded the US$1,6bn concession.
Despite a formal request by Delta's lawyers, Webber Wentzel, the Liberian government had failed to provide Delta with detailed reasons for its actions and instead relied on the Government's alleged discretion to cancel any bid and commence a new tender process at any time.
Due to the determination of the government to go ahead of its decision without abiding by all previous actions regarding the contract, the company on 27 October 2008 submitted a formal complaint to the PPCC claiming that the Government's conduct in failing to award the concession to it was unlawful and lacking in due process.
Delta argued in its complaint to the Commission that the government's conduct contravened the PPCC Act, because the action was without due process but relying on allegations which, by the Government's own admission, were not supported by any evidence.
Delta also argued that the government did not have what it called "an open ended discretion to cancel a tender and restart the process".Delta's complaint has now been referred to the complaints, appeals and review panel of the commission for consideration.
The letter to the government dated 30 October 2008 ordered it to stay all or any proceeding or actions such as the rebidding of the Western Cluster Project until the case is fully investigated. The Commission is expected to hand down a decision within the next two weeks.
Delta will continue to pursue all legal avenues available to it to resolve this matter. It can be recalled that the Public Procurement and Concession Commission was created in 2005 under the Public Procurement and Concession Act with the power to review and set aside decisions taken by the Government in contravention of this Act.
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