ISLAMABAD, March 24: The Chinese contractors of the Gomal Zam dam have finally terminated the contract and asked the Water and Power Development Authority to renegotiate a new contract based on current market prices. Informed sources told Dawn on Thursday that the ministry of water and power and Wapda have rejected the demand and sent the case to the president and the prime minister for a decision. The ministry and Wapda have taken the stand that if the Rs12.8 billion contract is renegotiated afresh on current market rates the total contract value will more than double and losing bidders of the original contract will go into litigation and further delay the project.

The contractors – the China National Water Resources & Hydropower Engineering Corporation and the Hanbiw Power Engineering Company — had stopped work on the Gomal Zam project in October last year at the site due to kidnapping and killing of one Chinese engineer. Another Chinese engineer was injured in the incident.

The sources said that top level political contacts between the leadership of the two governments had resolved that the contractors would resume work following stringent security arrangements made by the federal government and Wapda on the site.

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

The contractors, however, informed Wapda in writing to treat the original contract terminated.

The sources close to Wapda chairman Tariq Hameed said if it agreed to revise the contract price on market rates afresh, the contractors who had lost the bid to the Chinese would challenge the decision.