EOT KC-04(Extention of Time)

Subject: Kachhi Canal Project Contract KC-04,Earth work, Canal Lining and Structures From RD 106+000 To RD 530+400 and part of Structures From RD 40+000 To RD 106+000 ; Extension of Time up to 31-12-2014

1. Brief History

The Contract for KC-04 for construction of Main Canal from RD 106+000 to RD 530-400

(Earth work, Lining and structures) was awarded to M/s SMADB-Lilley-Shah Rukh (JV)

at a cost of Rs. 9737.012 million The works commenced on 13-07-2005 and Scheduled

Completion dates of Section-I and Section-II were 09-01-2007 and 06-01-2009

respectively.

The works could not be completed with in the Stipulated Period and Completion date of

both the section was extended by the Authority up to 31-12-2010 by granting extension of

1451 days for Section-I and 724 days for Section -II respectively.

The works could not be completed due to non-payment of their IPCS, cash flow problems,

damages caused due to August-2010 Flood and other unforeseen events being beyond the

control of contractor. The Authority accorded approval for 731 days extension of time for

completion of contruct-KC-04 from 01-01-2011 to 31-12-2012.

The contractor has contented interalia that work could not be completed during the previous

extended period due to Delay in Payment, Suspension of work under clause 69.4 COC,

construction of additional structures and Delay in settlement of claims. The contractor has

requested extension in completion period up to 31-12-2014.

2. REASONS OF DELAY

i. Delay in Payment and Suspension of work under clause 69.4 COC

The contractor has claimed that due to delay in payment work was suspended and during

extended period work remained suspended with effect from 20-05-2010 till 28-02-2012

(21 months and 3 days) and we are entitled to the extension of 21 Months on the basis of

this ground.

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Engineer’s Assessment

Current period of extension was from 01-01-2011 to 31-12-2012 (731) days. During

extension period payment of some IPCS was delayed and work remained suspended. It is

acknowledge that contractor faced cash flow problems due to accumulation of pending

liabilities, which is one of the major reason of delay and also work remained suspended.

Thus extension of 300 days is recommended on this account.

ii. Construction of Additional Structures

The contractor is of the view that most of structures along Kachhi Canal Project are

designed with under capacity because authentic rain fall data was not available due to

which consultants designed Low Capacity Structures. The rain fall and floods accured

in 2010 was beyond their capacity and 13 no’s structures were redesigned at higher

capacity.


The capacity of 04 number cross drainage structures was enhanced keeping in view the

current discharge of floods in the area on the basis of ground realities no extension is

recommend on this account as this was already considered in the previous EOT.

iii. Delay in Settlement of Claims

The contractor has informed that, their claims for Idle Machinery & workmen amounting to

Rs. 9832 Millions are pending.


Period of delay claimed by the contractor has been thoroughly examined by the Engineer

on the basis of ground realities and consider no extension of time on this account.

iv. Non Payment of Interest Charges against Delayed Payment of IPC’s

WAPDA has failed to make payment of IPC within the prescribed period mentioned in the

clause 60.1 and 60.2 of the contract. Approximately Interest charges amounting to Rs.400

Million is to be paid on account of delay by the Employer (WAPDA). More than

23 months have been expired but no payment has been made by WAPDA.

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Delay period has already been considered therefore no separate extension is considered by the Engineer on this accountv. Heavy Storm Rain / Flood During 2010 – 2012

Since over 50 to 100 years, the cyclone of flood was higher in the month of July and August due to heavy rains / Floods from mountains badly affected adjacent areas of Canal. The crops were completely damaged. The local land lords made cuts in the Canal at 126 places along with 130 Km of Canal to save their houses and life. Ultimately the Canal was filled with Silt / Debris and Structures were badly damaged. Their plant and Machinery was also damaged and submitted claim to National Insurance Company Limited amounting to Rs. 1965 Million.


It is agreed that flood August 2010 was unprecedented in hundred year history of the area and caused severe damages to canal and also hampered construction activities. Delay on this account was considered in the previous EOT hence no extension is recommended by the Engineer on this account.

vi. Lost due to Terrorism

As per clause 20.4 (C) of the contract, the cost of losses is to be paid to the contractor by the Employer as Insurance Policy does not cover the loss. At least 8 months extension is required on account of this reason.


On the basis of ground realities no extension has been considered by the Engineer on this account.

vii. WAPDA failed to Hand over the site due to Non Removal of Hindrances, Incompletion of Gaps in Lining due to Existence of Earthen Embankment of water course crossing on RD 106 to RD 531

WAPDA failed to hand over site since last five years and contractor can not construct foot

bridges and water course under Canal Lining. The farmers and local people are not

allowing the works in these gaps. WAPDA may kindly arrange to hand over these places

as early as possible. At least 6 months will be required.


It is agreed that some sites have not been handed over to the contractor by WAPDA. Contractor gas been asked to give schedule of work against these sites so that these sites be handed over to the contractor. The Engineer is of the view that 6 months extension on this account is recommended

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3. Engineer’s Conclusion

Keeping in view the reasons of delay claimed by the contractor an extension of time up to 30-06-2014 is considered as justified. The breakup of events of delays and recommended time is summarized blew

Sr.No Reason of Delay Contractor’s Request

Recommendation by the Engineer KCC

1.Delay in payment and Suspension of work under clause 69.40 of COC

633 days 365 days

2. Construction of Additional structures -----

3. Delay in settlement of claims -----

4. Non payment of interest charges against Delay payment of IPCS -----

5. Heavy Strom Rain/Flood during 2010-12 -----

6. Loss due to Terrorism 240 days -----

7. WAPDA failed to handover sites of w.c crossings 180 days 180 days

Total Days 545 days

4. Engineer’s Recommendations

The Engineer recommends for the grant of EOT in respect of contract KC-04 for the period from 01-01-2013 to 30-06-2014 with the admissibility of escalation/de escalation as per clause 70.1 conditions of contract. The contractor will also be entitled for EOT claim of 545 days between the period (01-01-2011 to 31-12-2012).

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EOT KC-04(Extention of Time)

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