Pakistan: Karachi Port Trust in Hot Waters Over PDWCP

The Karachi Port Trust (KPT) is in hot waters as a sub-committee of the senate’s standing committee on ports and shipping has started probing into what the committee members perceive as “wastage” of over Rs19 billion by the port operator in its stalled Dredging and Reclamation project at the $1.6 billion Pakistan Deep Water Container Port (PDWCP).

The senate body, according to its convener Senator Gulshan Saeed, has decided to drag the KPT into the Supreme Court if the port operator appeared to be responsible for the wastage of billions.

The committee convener also tends to get the spending authority of the KPT, an autonomous semi-governmental Trust governed by the 10-member Board of Directors, restricted through legislation by the concerned quarters. The KPT had, in November 2008, awarded the Rs19.288 billion contract to a Chinese firm, M/s China Water and Electric (CWE), for carrying out 33 million cubic meters (mcm) capital dredging for the approach channel of PDWCP by January 15 of the current year.

But, while it has been eight months the Chinese contractors have missed the deadline, the billions of rupees project has hit a snag with the employer, KPT, and the contractor, CWE, disputing over the causes of delay in completion, the additional works and costs arising out after the work was started by the company. A working paper prepared by KPT for the Senate body underlines the removal of garbage and rock bund, making a temporary ditch for Clifton Outfall, the additional borehole work and the construction of a boundary wall as additional works the CWE complaints about. The CWE, demanding compensation for the additional works, attributes the delay to the unforeseeable underwater physical obstructions that could not be removed before 2013 even if the “blasting methodology” is applied. If more powerful dredgers, as required by the KPT, are to be used the balance quantity of dredging, 26,032,500 cubic million, can not be removed before end 2014.

The CWE has asked the KPT for a 651-day, over one and half year, extension in the completion period on the grounds like unavailability of breakwaters, delay of engineers on site, unforeseeable physical conditions, adverse climatic conditions, bad social and security conditions, design in possession of site, delay of customs clearance, fossil underwater obstructions and delay to additional works.

The KPT, on the recommendation of its consultants from M/s Royal Haskoning, UK, denied the required extension and has asked the contractor “to mobilise bigger barges and a suitable dredger to expedite the progress”. During its Thursday’s meeting at KPT head office, the Senate body took briefing from a CWE’s representatives led by Deputy General Manager, Chen Huijun. “We are trying our level best to complete the work at the earliest,” Chen told the committee. Falling soft on the CWE who hail from a “friendly country” (China), Senator Gulshan Saeed, committee’s convener, tends to make the KPT management accountable for, as she told Pakistan Today after the meeting, spending Rs20 billion on such a small project that the port operator could easily do employing its own dredgers, TSHD ABUL. And the convener’s remarks carry enough weight as KPT, after indulging in a row with the CWE, has done the same. ABUL would be carrying out around 7 million cubic dredging at the site.

“We have given a week time to the Chinese firm for preparing a new strategy to ensure a swift completion of the job,” Senator Gulshan said.

She, however, said the committee would not end its probe into the KPT’s Rs20 billion project that was supposed to be undertaken in a lesser amount. “We three (committee members) have decided to go to the Supreme Court if the KPT appears responsible, we would also go for some legislation to curb KPT’s spending authority,” the convener told Pakistan Today after conclusion of the meeting. The committee also warned the CWE of cancellation of their contract if they caused any further delay in completion of the project. “If KPT reserves the right to cancel our contract, we also have the right to go to the international arbitration court,” Deputy General Manager, Chen Huijun told Pakistan Today.

BY ISMAIL DILAWAR (pakistantoday)

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Source: pakistantoday, September 23, 2011; Image: kpt.gov