ISLAMABAD: National Highway Authority (NHA) has revised upward the PC-I for construction of Islamabad-Muzaffarabad Road Project (E-75) from Rs8.24 billion to Rs12.66 billion.
Revised PC-I for construction of Islamabad-Muzaffarabad Road Project (E-75) recommended by The National Highway Authority (NHA) Executive Board for approval of Central Development Working Party (CDWP)/Executive Committee of the National Economic Council (ECNEC).
The dual carriageway between Islamabad and Lower Topa starts at the Satra Mile Check Post on the existing Murree-Rawalpindi Road. The end point of the project is at Lower Topa near Murree. The alignment is on the other side of the ridge (right side of the existing road facing Murree). Length of the project is 43.2kms. The project envisages the construction of new 4-lane dual carriageway on NHA standards along with drainage, protective and retaining structures.
Contract for construction of Islamabad-Murree Expressway (Satra Mile to Ghika Gali) was awarded in June 1993 to Development International Trade Corporation (DITCO), a Saudi base company with a Pakistani partner, for a total values of civil works Rs2.187 billion with completion period of twenty two months. The contract fell through, as the contractor was unable to meet his obligation for submission of performance guarantee. The NHA thus terminated the contract in August 1994. Thus mobilization advance of Rs212 million paid to the contractor under the agreement, which was secure against machinery pledge to the NHA, remained with the contractor. Contesting the termination order, the contractor filed an application for arbitration in 1996, and lodged a claim of Rs900 million. In their award of June 1999, the arbitration rejected DITCO’s claim and decided in favor of NHA for refund of mobilization advance along with forfeiture of security deposit totaling Rs256 million.
The NHA sought legal opinion from M/s Walker Martineau Saleem on revival potions for recovery of the advance decided by the arbitrators. The legal consultants intimated that it is a long course to first have a rule of court made, reach the Supreme Court and eventually face difficulty of making recovery because M/s Ditco has no assets in Pakistan. It was opened by the legal consultant that revival of the contract will enable NHA to make effective recovery without protracted litigation. Accordingly, NHA put up the offer of the contractor along with its recommendations to executive board, who approved the revival of the contract in its meeting held on 4th August, 1999.
In June 1999, the contractor approached Ministry of Communications for the revival of the project on original terms and conditions of 1993. The project was revived on 28th August 1999 on the original terms & conditions along with rebates/concession including 7% rebate on contract price, payment in foreign exchange component reduced from 35% to 25%. As per the revival of agreement, the project was also assigned to M/s Hakas (Pvt.) Ltd.
Work on project commenced on 19th September 1999 with completion period of 22 months. Initial 12 kilometers were handed over to contractor by March 2000. Beyond 12km most of the land belonged to Forest Department. Due to non-issuance of NOC from the government of Punjab, work remained suspended for a period of over 14 months. Afterwards the site as handed over in piece meal. Main factors which delayed the project are issuance of NOC from government of Punjab as the alignment passes through provincial land, considerable delay in transfer of forestland since major portion of alignment falls within forestland, considerable delay in removal of forest trees, within row, transfer of cantonment, PAF and Municipal Murree land is still under negotiations and delay in removal of utilities within ROW.
The major reason of increase in cost is the escalation (27.4 1%), land cost (12.57 %) and dollar difference cost (5.28%). The capital cost of the project is revised to fulfill the aforesaid requirements and conditions. The revised project cost is Rs. 12.666 Billion.
