LAHORE: Work on Golen Gol hydropower project has stopped as the Water and Power Development Authority (Wapda) has failed to make payments to both the consultant and the contractor.

Wapda was put on a 30-day notice that expired this week.

The lender — Kuwait Development Fund (KDF) — has also expressed its inability to release funds for the Rs4.6 billion project because it has still not approved Wapda’s recommendation of award of the contract. The entire project has thus run into trouble.

In a letter to Wapda on June 3, the consultant fired the first warning shot: “We bring to your attention that payments of several hundred thousand euros are due for almost a year. As per the contract, the consultant has to notify the client (Wapda) once the payment is due and give a grace period of 45 days. After lapse of the period, the consultant might terminate the contract after 30 days. We, hereby, notify you under the contract and request outstanding payment within 30 days.”

Payments not made to the consultant and contractor

The contractor chimed in with a similar complaint when in response to the engineer’s letter (Stoppage of Works and Extension of Time), it said: “With regard to engineer’s letter about possible extension of project time for the reason of stoppage of work because of non-receipt of contractual payment, the contractor, for the time being, is not in a position to provide supporting information as long as it does not receive the outstanding advance payment.”

Wapda has been writing to the KDF for release of funds, but the lender has refused: “Please be advised that we are unable to process payment of these (your) applications since our approval of your recommendation to award is still under consideration,” says its letter of April 4 this year. The unfortunate project suffered a delay of over three years during its bidding process because it was annulled repeatedly for corruption charges against Wapda high-ups.

The Transparency International, the National Accountability Bureau and the Ministry for Water and Power all got involved at different stages of bidding to bring transparency to the process.

Wapda, after extending even the last bid several times, ultimately awarded the contract to an Austrian company in January this year.

Wapda blamed the lender for repeated extensions in the last bid and said dates were extended because the KDF approval was awaited. But it has transpired that Wapda never waited for, or at least never got, an approval from the KFD which has now refused to release funds for the project pending its approval of the award of the contract.

A Wapda spokesman told Dawn: “The payment to the consultants and the contractors is to be made through the funds provided by the KDF. The payment will be made by Wapda as soon as the funds are released. The KDF has not refused funds for electro-mechanical works. In fact, the queries raised by the lender for release of funds are being addressed by Wapda.”

The 106MW hydropower project loc­ated on River Golen Gol — a tributary of the River Mastuj in Chitral district of Khyber Pakhtunkhwa — had been under the tendering and re-tendering process since June 30, 2011, and now the contact execution has run into problems.

Published in Dawn, July 6th, 2014