PESHAWAR, Aug 22: The NWFP government has cancelled the memorandum of understanding (MoU) signed with the Frontier Works Organization (FWO) for the construction of the multi-billion-rupee Malakand-III hydel power project, according to official sources.
The two sides had signed the MoU in January last, according to which, army’s subsidiary organization, FWO, was to execute the civil works of the multi-billion-rupee Malakand-III hydel power project involving 81mw hydel power generation capacity.
The MoU, according to sources, has been cancelled after the two sides could not resolve the impending issue of rate submitted by the FWO for executing civil works.
Sources in the provincial government said a decision to the effect of cancelling the MoU was taken by provincial cabinet in its meeting held on July 6 and was subsequently conveyed to the FWO recently.
The cabinet, the sources said, took the decision after finding that the rates submitted by the FWO were higher.
“Provincial government could not afford the rates apparently for their being almost double than the estimates it has calculated for the same job,” the senior government functionaries of the NWFP government said.
Estimated at a cost of Rs 5.1 billion, the Malakand- III hydel power project would now be carried out by the provincial government from its own resources.
In this respect, 40 per cent of the total cost would be raised from the provincial government’s hydel power fund and the remaining 60 per cent of the cost would be arranged through bank borrowing.
After the memorandum of understanding was cancelled, the provincial cabinet decided to award contract through open bidding process.
Some 20 firms obtained tender documents till Aug 15, the deadline for getting the same documents.
The interested parties include five Chinese firms, four Turkish, one each from Korea and Cyprus, in addition to nine local firms.
“Only those firms would be considered in the pre-bidding process which have obtained tender documents within the due time,” the sources said.