Gomal Zam Dam contract cost surges to Rs 10 billion

The contract cost of Gomal Zam Dam has increased by around 150 percent to Rs 10 billion, which was a major demand of Frontier Works Organisation (FWO) for resumption of work on the project, sources told Business Recorder.
The cost of the same contract was Rs 4 billion, as agreed between the Chinese company and the government, the sources said. The kidnapping and subsequent killing of one of the Chinese engineers forced the company to abandon work on the dam in 2004.
The concerned authorities including the Planning and Development (P&D) Division and the Water and Power Development Authority (Wapda) have agreed to enhance the contract cost. The overall cost of the project has also been increased from Rs 12 billion to Rs 15 billion, the sources said.
According to the PC-I, the project, being built on Gomal River in South Waziristan Agency, was to be completed by June 2006. Due to abandoning of the work by the Chinese company, the project completion has been delayed. The new date of completion is yet to be determined despite the finalisation of the new contract, they added.
A senior government official said that since the contract was awarded to the Chinese company in 2002, so the contract cost was kept at Rs 4 billion. Now the prices of required materials have soared, therefore, the contract was given a fresh look. He said that even the Chinese company was seeking an additional allocation of 25 million US dollars after it had started the construction work.
However, the official gave no detail that what is the government's decision about the work already, done by the Chinese contractors. According to the sources, around 98 percent work has been completed on design, 16 percent on dam and spillway, and over 14 percent work on distributaries.
There is no detail whether the amount already spent by the Chinese company would be included in the cost, which was calculated afresh for resumption of the work on the project. They said that the government turned down the demand of increase in allocation of the project by the Chinese company and the same was accepted for the FWO. They said that prices of required materials had not experienced such a big hike in the last two or three years, which could have enhanced the project cost by 150 percent.
The contract has been assigned on European standards, the sources said. This is, perhaps, the first scheme in water sector to have been awarded on the pattern of European construction standards despite the fact that there is a sharp contrast between prices and costs in European countries and Pakistan, the sources added.