ISLAMABAD, Sept 29: Pakistan’s experience with foreign construction firms is not pleasant and these companies, after receiving hefty amounts in the form of “mobilization advance” not only leave the projects incomplete but also drag Pakistan to international forums, like the International Centre for Settlement of Investment Disputes (ICSID).
The chairman of the National Highway Authority, Maj-Gen Farrukh Javed, stated this, while talking journalists at the site of under-construction M-3.
Praising the consortium of Pakistani builders, called PAMIC, led by Hasnain Construction, which is contracting M3-Pindi Bhattian to Faisalabad, he said that Bayinder, a Turkish company, which had been contracted for construction of M-1 (Peshawar to Islamabad) had dragged Pakistan to ICSID. “We shall fight it out even at ICSID.”
The NHA chairman said the company, which had been given Rs600 million as mobilization advance, was not returning the money.
He stated that if the money was returned, 50 per cent of the project, could be completed with it. He said he had visited Turkey for the recovery of Rs600 million, but without any success.
Similarly, a Saudi company, Ditco was given the contract for the construction of a dual carriageway from Satra Meel to Jhika Gali, also disappeared and now a Pakistani company was completing the project.
The chairman, however, was not aware that it was the stance of the NHA before the arbitrators that the Pakistani company had only used the title of Saudi Company to get the contract for which only foreign firms were qualified.
The arbitrators, comprising two retired judges of the Supreme Court, had accepted NHA’s view but the contract was again given to the same Pakistani contractor.
The Pakistani firm, which was constructing M-3, the NHA chief said, was using the latest “reinforced earth technology”, which was not only cheap but it also saved the space which would be of great use specially in the cities. The reinforment earth technology, he added, was being used in the Lyari Expressway project.
It is being felt for the first time at the highest level that Pakistan should not sign investment treaties without properly defining the term investment, as it has landed Pakistan in trouble at international forums, where mere registration of a complaint by a foreign company meant losing few millions dollars.
Those who are watching the country’s interest on international forums, like the ICSID, are of the view that the country’s bureaucracy never protected its foreign assets while signing the investment treaties. If a suit was decreed by the ICSID, the other party could ask for the execution of the treaty by identifying Pakistan’s assets. In one case, Pakistan was threatened that its plane landing in France would be confiscated as the ICSID had given award in favour of a French company, which was contracted to build Jinnah Terminal at Karachi Airport.