ISLAMABAD, Dec 23: The government has started renegotiating with two foreign firms, including a Chinese company that earlier gave up its contract, to resume the construction of the Rs13 billion Gomal Zam dam in Balochistan, it was learnt. The dam’s construction work was suspended since Oct 9, 2004 after the Chinese contractors left the country following kidnapping and killing of a Chinese engineer.

The project was slated for completion by June 30, 2006 but so far only 13 per cent of the work has been completed against a target of about 65 per cent, Wapda sources said.

Sources told Dawn on Friday that Pakistan had invited the second highest bidder, Tekser of Turkey, to take up the remaining work of the Gomal Zam dam on a price it had earlier offered in the original bid.

They said re-negotiations with original contractor M/s China National Water Resources and Hydropower Engineering Corporation and Harbin Power Engineering resumed after a break of over six months.

A delegation of Chinese contractor, sources said, was currently in Pakistan for renegotiations. A final decision about allowing the previous contractor to resume the work or involve Tekser of Turkey would be taken in the next few days by the prime minister after the ministry of water and power and Wapda completed negotiations with the two firms, these sources said.

Meanwhile, the government has decided to bifurcate the contract in two parts. The major part of the main dam construction would either be given to the Chinese or Turkish firm.

The second part involving security issues related to irrigation and water distribution system running into tribal areas would be handled by the Frontier Works Organisation (FWO), said these sources.

The Chinese firm had asked the government to cancel its original contract and increase the project cost by more than 25 per cent according to current market rates to resume the work

Top political contacts between Pakistan and China had led to renegotiation between the two sides but the project had already been delayed by more than two years, the sources said.

The ministry and Wapda believe that if the contract was renegotiated afresh on current market rates, the contract price would go up by more than double the existing rates and losing bidders of the original bidding would go into litigation and further delaying the project.

The sources said the Wapda was ready to pay about 25 per cent of the contract price to the Chinese contractors to facilitate them to resume construction work.

The sources said the government has already approved relending of loan at 11 per cent to the Wapda. The Abu Dhabi Fund for Development had provided a loan of about Rs5 billion to Pakistan government for the project at lower rates but the government was earlier charging much higher interest rates from Wapda.