Subject: Kachhi Canal Project – Execution of Remaining Works of Contract KC –05 (Section A) – EOT from 1-07-2013 to 30-06-2014

1. Brief History

The contract KC – 05: construction of main canal and its allied structures from RD 531+00 to RD 1005+00; was awarded to M/s Central China Power Group JV at a bid cost of Rs: 1245.784 million on 20-06-2006.The work commenced on 09-09-2006 and stipulated date for completion was 31-12-2008. The EOT of the contract was granted by the authority up to 31-12-2011. Through mutual consent of JV partners the scope of work was divided as under and MOU was signed to execute the work with new strategies and to treat each section as a separate entity.

Section RD Scope of Work Responsibility

A 531 to 616.320 & 849 to 856 Earth work, lining and structures

M/s Habib Rafiq Ltd.

B 616.320 to 747.320 -do- M/s Central China Power Group

C 747.320 to 849 -do- M/s Ghulam Rasool & Co.

D 856 to 1005 -do- M/s Central China Power Group

The progress of works in section A remained very slow but the works in section B & D could not be achieved due to security situation. The works in section C got substantially completed by M/s GRC. M/s CCPG vide letter dated 14-05-2012 requested to release them from further performance of section B & D of contract KC – 05 and carry out the remaining works through any other Pakistani contractor.

The Government of Pakistan has taken a serious view; and focused on early completion of phase 1 of Kachhi canal project; to release water for command area of District Dera Bugti Baluchistan up to 31-03-2013 and substantial completion of phase-1 up to 30-06-2013.

Due to security problems in the area of section B & D, M/s CCGP, subsequently requested to release them from further performance under clause 66.1 and allow sub sequential relief. M/s Habib Rafiq (Pvt) Ltd. also committed to complete the balance works of section- A within the contract provisions. M/s GRC gave the willingness to carry out the remaining works of section B & D on the existing BOQ rates vide their letter dated 23-11-2012.

M/s CCGP in collaboration with its joint venture partners unanimously agreed and submitted supplementary agreement for completion of remaining works of contract KC – 05 vide letter dated 15-01-2013. The Employer in its meeting held on 17-01-2013 approved the execution of

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supplementary agreement. M/s CCGP and its joint venture partners signed the supplementary agreement without any influence. Pursuant to the decision of the employer dated 17-01-2013, joint venture has been dissolved. M/s CCGP has been relieved from further performance of remaining works of section B & D and their performance security has been released on 31-01-2013.

M/s Habib Rafique (Pvt) Ltd. has taken over the responsibilities of remaining works of section A and M/s GRC for section (B & D). Extension of time has been granted by the authority up to 31-06-2103as per supplementary agreement dated 31-01-2013. M/s Habib Rafique (Pvt) Ltd has furnished performance security for the remaining works amount of section A to be remained valid for 28 days after issuance of DLC and is fully responsible for completion of remaining works.

Remaining major quantities of section A to be completed by M/s Habib Rafique (Pvt) Ltd up to 30-06-2013 are detailed below.

Sr. No.Description Unit

Section-A QuantityQuantity as on November 2012

1. Excavation 0/00 Cft 345,982

2. P.C.C Lining 0/0 Cft 17,281

3. Piles Rft 12,315

4. Structural Concrete 0/0 Cft 5,671

5. Steel Tonne 1,473

2. Execution of Remaining Works of Section AThe remaining works were started by M/s Habib Rafique (Pvt) Ltd in section A in order to complete the works. During this recent mobilization and initial setup M/s Habib Rafique (Pvt) Ltd have observed serious security threats in the area. For the sake of foolproof security of their employees and assets they require solid strategy measures.

M/s Habib Rafique (Pvt) Ltd intimated that IPC payments have not been released and they are totally struck up and at the nick to collapse. Some amount of IPCs is still pending. Despite negative cash flow due to 7 years old rates and lack of funds from the employer side, the contractor still continued the work up to 30-06-2013. An escrow account facility was approved by the employer but this facility could not availed by the contractor.

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M/s Habib Rafique (Pvt) Ltd started the remaining work of section A w.e.f November 2012, and progress so far carried out up to 30-06-2013 is detailed below.

Sr. No Activity Unit Total quantity as on NOV.2012

Achieved quantity NOV-2012 to JUNE-2013

Remaining quantity on July-2013

1 Canal Excavation 0/00 CFT 446,495 345,982 77% 100,513

2 PCC Lining 0/0 CFT 45,842 17,281 38% 28,561

3 Piles RFT 12,315 8,605 70% 3,710

4 Structural Concrete 0/0 CFT 5,671 2,192 39% 3,479

5 Steel Tonne 1,473 657 45% 816

It is clear from the above details that only 30% work has been completed by M/s Habib Rafique (Pvt) Ltd in the eight months and they still require 12 more months to complete the remaining works of section A.

. M/s Habib Rafique (Pvt) Ltd have applied for extension of time for 12 months w.e.f 01-07-2013 to 30-06-2014 to complete the remaining works of section A of contract KC – 05. Submission of the contractor and detailed Evaluation of the consultants is given below.

3. Reasons of Delay

i. Law and Order Situation

The contractor informed that work was stopped due to Law and order situation of the area which is known to every one. In the year 2013 there are more than 125 incidents of terrorism which occurred in Baluchistan. The contractor has claimed a delay of 150 days on this account. Engineer’s Assessment

The Engineer is of the view that area of section-A is not a troubled area and no case of terrorism occurred in the area hence no extension of time is considered on this account.ii. General Elections in the Country

The contractor has informed that due to General Elections in the country on 11-05-2013. The project staff and labour belonging to the different parts of the country left the site to caste their votes. The contractor has claimed a delay of 30 days on this account.

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Engineer’s Assessment

Period of delay has been thoroughly examined in the light of ground realities and extension of 10 days has been considered by the Engineer on this account.iii. Harvesting Season

The contractor has informed that during the month of April, harvesting season starts. Most of their staff belongs to rural areas and they left for their homes to take part in the harvesting and thrashing their crops. The contractor tried to give them some extra benefits in term of higher wages but they still refused to work at Project site. The contractor has claimed a delay of 30 days on this account.Engineer’s Assessment

Delay claimed by the contractor is not justified thus no extension of time has been considered by the “Engineer” on this accountiv. Facility of Escrow Account

The contractor has informed that he applied for the facility of Escrow account in the month of Jan 2013 and their request was approved by WAPDA on 01-03-2013. The contractor has claimed a delay of 60 days on this account.Engineer’s Assessment

It is note that facility of Escrow account was approved on 01-03-2013 but contractor failed to avail this facility up to 30-06-2013. Keeping in view the ground realities no extension of time has been considered by the “Engineer” on this account.v. Pending Payments

The contractor has informed that an additional mobilization advance of Rs. 240 Million was to be paid for the contract KC-05 in the year 2010 as financial assistance to expedite the progress. Several cash flow problems due to delayed or non payments by the client resulted slow progress and even discontinuation of works. The contractor has claimed a delay of 86 days on this account.Engineer’s Assessment

The period of mobilization advance belongs to the year 2010 and have no relation period. No extension of time has been considered by the “Engineer” on this account.vi. Miscellaneous Delay

The contractor has informed that unprecedented rains during the year 2010 to 2012 caused damaged to the executed works. The contractor has claimed a delay of 259 days o the following issues:

a. Silting and Slush.b. Pending claims for Mass Haul Diagramc. Extra payments in lies of using 50kg extra cement in concrete work.

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d. Pending payments in actual fuel component regard.e. The pending issues of VOS of flood protection Bund design change.f. Late release of Retention Money.

Engineer’s Assessment

The Engineer is of the view that said issues do not belongs to the current completion period hence no extension of time has been considered on this account.

4. Engineer’s Conclusion

Remaining works of contract KC-05 (Section A) were taken over by M/s Habib Rafique (Pvt) Limited to complete the works in all respect up to 30-06-2013. The contractor completed only 30% work and applied for extension of one year more to complete the balance works up to 30-06-2014.

The break up of events of delay and recommendation of the Engineer is summarized in the following table:

Sr.No. Reasons of DelayContractor’s

RequestRecommendation of the

Engineer

1. Law and Order Situation 150 -

2.General Elections in the Country

30 10

3. Harvesting Season 30 -

4. Facility of Escrow Account 60 -

5. Pending Payments 86 -

6. Miscellaneous Delay 259 -

Total days 615 10

5. Engineer’s Recommendations

The Engineer recommends for the grant of one year extension of time in respect to contract KC-05 (Section-A) up to 30-06-2014. Project formation may ensure payment to the contractor for his IPCS so that the contractor may complete the works in time.

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