ISLAMABAD, April 2: The government has decided to scrap a $90 million contract with a Chinese firm and invite fresh international bids for the construction of the Gomal Zam dam in South Waziristan, it is learnt. The whole process is expected to delay the project by at least four years and put substantial additional financial burden on the government as a result of cost overruns on the project that should have been completed by September 2006.

A decision (to scrap the contract and invite fresh bids) had been made by the Economic Coordination Committee of the federal cabinet and conveyed to all concerned for implementation, a senior official of the power ministry told this correspondent.

The Chinese contractor — a joint venture of the China National Water and Hydropower Corporation and the Harbin Power Engineering Company — had given up the project in October 2,004 due to kidnapping of Chinese engineers and had refused to resume the work unless project cost was increased and a major portion of the project was separated from the contract.

The Wapda had agreed and signed a MOU with the contractor to increase the project cost from $73 million to $85 million by reducing the scope of the project to hydropower and dam components and had separated irrigation and transmission line component from the project.

The cost of transmission and irrigation component according to the bid was $25 million. The Wapda has now proposed to award about a $50 million contract to Tekser of Turkey to complete the irrigation component and a $2 million contract to Alamdar Engineering for transmission line.

As such, the total project is estimated to go up to $135 million while its original cost was $73 million.

The official said Wapda was currently in the process of issuing a notice of termination to the contractors.

“The ECC has directed Wapda and the ministry of water and power to again tender the works on international competitive bidding basis,” says an official document.

“The entire process, including pre-qualification of contractors, detailed designing, preparation of tender drawings, invitation of bids, evaluation of bids received and award of work, is likely to take eight to nine months,” says Wapda.