Peshawar bus project’s cost surges to Rs71 billion

Published September 7, 2019
The BRT flyover being widened at Tajabad, Peshawar. — Photo by Abdul Majeed Goraya
The BRT flyover being widened at Tajabad, Peshawar. — Photo by Abdul Majeed Goraya

PESHAWAR: The Peshawar Development Authority (PDA) has informed the provincial government that the cost of Peshawar’s Bus Rapid Transit (BRT) project has gone up by another Rs3 billion to a whopping Rs71 billion.

The PDA is the executing agency of the much-delayed project, which has missed many deadlines due to design issues, which led to the large-scale retrofitting to the embarrassment of the provincial government.

The issue of the BRT cost escalation and PC-I revision came up during a ‘progress review meeting’, which took place on Aug 21 with additional chief secretary Dr Shahzad Bangash in the chair.

PDA chief attributes it to rupee devaluation, insists no additional funds required

The minutes of the meeting, a copy of which is available with Dawn, show that PDA director general Engineer Mohammad Uzair informed participants that the BRT project’s cost was escalated by Rs3 billion and the revision of its PC-I for the purpose was inevitable.

The additional chief secretary (ACS), however, expressed concerns about the cost escalation saying it was clearly communicated at every approving forum including Executive Committee of the National Economic Council (ECNEC) that neither the PC-I would be revised nor would the time for the project’s completion would be extended.

The PDA official insisted that the cost escalation was taking place due to Pakistani rupee’s devaluation and that no additional funding would be required.

The ACS directed participants to arrange a separate presentation on the matter with solid justification for making a decision about it.

If the PC-I is revised, this will happen for the second time as earlier last year, the project’s cost had jumped to Rs68 billion from initial Rs49 billion due to faulty design, which led to the never-ending project retrofitting.

The meeting’s minutes quoted the PDA chief as saying the project contractor did not abide by all clauses of the contract agreement in line with the contractual penal clauses, so the authority had issued notices to the contractor over for flouting contract, while the options of imposing interim recoupable liquidated damages (LDs) (maximum five per cent of the project cost) for sectional completion of work and slapping the irreversible permanent liquidated damages (minimum 0.55 per cent of the contract cost per day to the maximum 10 per cent of contract cost per day), terminating contract were under consideration.

The Asian Development Bank’s representative said partial or interim liquidated damages could be imposed on the contractor and that would be the PDA’s call.

The PDA chief told the meeting that the sectional milestones were agreed with the contractor and in case of its failure to achieve them, the engineer would recommend the interim LDs. The meeting decided that the PDA chief would ensure the penalty imposition as recommended by the engineer.

The PDA chief also informed the meeting that there had been delays in the submission of the final detailed engineering design drawings in various segments of the project and its sub-components.

He said the contract agreement had no clause under which the authority could penalise consultants.

The participants asked the PDA to consult the ADB on the revision of contract clauses to safeguard the government’s interests.

It also decided that the KP government would convey its displeasure with the performance of the contractor and consultants to the ADB and it would be much careful in any future project considering the BRT consultants’ poor performance.

The meeting also decided to dedicate an inspection team for the identification of all deviations from work scope and fix responsibilities with the imposition of penalties.

It was informed that the BRT Reach-III had been subcontracted by the contractor, which had been the most problematic and led to the constant missing of targets.

About the drainage issue near Tehkal area on University Road, the drainage engineer informed the meeting that the existing drainage would not be sufficient to carry future demand flows.

The meeting was also informed that the Frontier Works Organisation had already built some drains on the same section but they were not connected with new drains.

The meeting also discussed the possibility of the BRT’s partial operation on Reach-I, including two feeder routes.

When contacted, a spokesman for the PDA said he authority had an estimated Rs2.7 overrun but the rupee’s devaluation was likely to cover it as the project funds were arriving in dollars.

The spokesman said neither new loan would be required for the purpose nor had the KP government had had to borne additional financial liability.

Published in Dawn, September 7th, 2019

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