Tarbela-4 project contractor: PM orders probe into payment of incentive money

Published: January 7, 2017

ISLAMABAD: Prime Minister Nawaz Sharif has ordered a comprehensive inquiry into the $25-million incentive money paid to the contractor of Tarbela-4 extension project, after the company failed to meet the deadline set for completing work on the project.

“The prime minister wants to know the causes and reasons that have prevented the contractor from meeting the June 2017 time frame despite getting additional payments for accelerating work,” a senior official of the Pakistan Water and Power Development Authority (Wapda) said while talking to The Express Tribune.

In a high-level meeting, the premier also directed Wapda Chairman Muzammil Hussain to make concerted efforts for finishing work on the project by August 2017.

Tarbela-4 extension to be completed in June 2017, says WAPDA chief

The federal government has now distanced itself from any move to recover the $25-million payment and has put the onus on the Wapda chairman and its board of directors to take a decision in this regard.

Wapda officials have informed the government that the contractor had already spent $23 million for stepping up work on the Tarbela hydroelectric power fourth extension project. In response to the commitment to releasing $50 million as incentive, a disputed amount of the contractor totalling $130 million had been settled, they said.

In order to thwart the recovery of incentive money, the contractor has issued a contract suspension notice to Wapda and threatened to file a case in the international court to reclaim the settled $130 million. It has also slowed down activities at the project site.

Earlier, the government had committed to paying $50 million to the contractor if it succeeded in finishing the project by June 2017. However, the pace of work indicates the company will not be able to achieve the goal.

The doling out of taxpayer money as an incentive to the contractor has caught many off-guard. A reward is normally given after the completion of work ahead of schedule. But in this case, the contractor has already been paid $25 million.

Earlier, in a meeting held on November 29, 2016 and chaired by the prime minister, the Wapda chief suggested stopping the recovery of millions of dollars from the contractor.

Tarbela-4 extension: Govt looking to recover $51m from contractor

He said the decision should be reviewed as it would not be easy to take back the incentive money because of various reasons beyond the control of the contractor. He also requested that Wapda should be allowed to undertake the acceleration programme.

Under the Tarbela-4 extension project, three units of 470 megawatts each with a total capacity of 1,410MW were being installed on the T-4 tunnel, which would enhance total capacity of the Tarbela power station to 4,888MW compared to the earlier 3,487MW.

The original deadline for making the project ready was February 2018, but it was brought forward to June 2017 under the acceleration programme. A variation order was also signed and payment made to the contractor in that regard.

Published in The Express Tribune, January 8th, 2017.

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