September 4, 2002	Wednesday	Jamadi-us-Saani25,1423

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ISLAMABAD, Sept 3: As three consortia are bidding afresh for the Rs24 billion Islamabad-Peshawar motorway project, the National Highway Authority (NHA) has served a legal notice on the “expelled” Turkish firm Bayinder to pay Rs6 billion by Sept 15, Dawn learnt reliably.

Chairman NHA, Maj-Gen Farrukh Javed, when contacted, confirmed to Dawn that his organisation has issued a legal notice to Bayinder and has challenged the jurisdiction of International Centre for Settlement of Investment Disputes (ICSID) over Rs6 billion guarantee encashment by the Turkish firm.

Three parties that are now bidding for Peshawar-Islamabad (M-I) include Frontier Works Organisation (FWO), a construction subsidiary of general headquarters, Pakistan Motorway Contractors Joint Venture (PMJV) comprising local companies SKB, Descon, Husnain Construction, Habib Rafiq Construction, Hakas, Sachal, Shahzaman, Mian Nisar Company and Sanaullah & Moosid and a Turkish consortium comprising Limak, Teksar, Kolin, Izhar, Gammon, Karcon, MMB-Sky joint venture.

The NHA chairman said that financial bids of the parties would be opened on Sept 26 and negotiations and contracting process would be finalized by end of October this year. The project would be completed within three to four years, he said.

Under the original agreement, Bayinder was required to hand over completed M-1 project to NHA by Dec, 2002. The termination of agreement has delayed the project by at least another four years and got NHA’s Rs6 billion stuck up with the Turkish banks.

The NHA chief said the contract would have to be awarded to the lowest bidder even if its bid price was higher than Rs12.5 billion earlier agreed to with the local contractors through negotiations.

Furrukh Javed, however, said that local contractors who were not paid by the Turkish firm for the work they had already done would have the first right of refusal if the new contractor opted to sublet various jobs. The lowest bidder will also have to make 75 per cent advance payment to these local contractors, he said.

He said that NHA had challenged the jurisdiction of ICSID on the grounds that certain formalities provided in the agreement have not been completed and that is why the ICSID has not registered the case so far.

The ICSID has asked Bayinder to comment on the questions raised by the NHA by Sept 15. The NHA head said that by going to the ICSID, the Turkish firm has already lost the jurisdiction of the Turkish courts because it has gone to a higher forum.

“If they do not respond by the given date, the NHA would resort to other options,” said the general but did not disclose what those options could be, to keep the legal strategy guarded. “We want a graduated response from Bayinder because we are confident that the amount is recoverable,” said the NHA chief adding that ICSID has not so far registered the case of Bayinder seeking $400 million from the NHA.

The Turkish company, which had been expelled from the site about two years ago, has approached the ICSID, on the basis of Bilateral Investment Treaty between Pakistan and Turkey. The ICSID is a forum set up under UN Convention.

The contractor is demanding about US $ 400 million from the Pakistan as it had been “expelled” from the site for its failure to complete two sections of Peshawar Motorway on the agreed schedule.

Since the expulsion of the Turkish contractor last May, 2000, Pakistan has faced multifarious problems concerning Peshawar Motorway project.

At the time of expulsion it was argued by the government that the project would be completed with lesser cost and also on time.

The Pakistan government was blocked from encashing a bank guarantee offered by the Turkish banks as Bayinder had obtained a prohibitory injunction against the encashment of guarantees till the dispute was resolved.