News Column

Road project: US links $90m grant to award of contract to FWO

January 25, 2014

Zafar Bhutta

The United States has linked its $90 million assistance for resuming work on the Kalat-Quetta-Chaman section of highway with the award of contract to the Frontier Works Organization (FWO) and hiring of a reputed international firm to monitor construction, sources say. Work on the project had screeched to a halt way back in 2010 after the Asian Development Bank (ADB) closed its loan programme in the wake of poor law and order situation in Balochistan . Now, the US Agency for International Development (USAID) has come up with a demand that the road construction contract should be awarded to the FWO and an international company be appointed for project monitoring. According to sources, improvement of the 247-kilometre Kalat-Quetta-Chaman section of the National Highway (N-25), which originates from Karachi and ends in Chaman, was taken up in 2006 with ADB assistance. Prior to the start of work, the Executive Committee of National Economic Council (Ecnec) had given its approval in January 2004 with a cost of Rs6.6 billion . However, poor law and order situation hampered construction activity and only a part of the highway could be completed. With the closure of ADB’s assistance programme, the activity came to a stop. In September 2012 , USAID agreed, in principle, to provide finances for the remaining portion of the project amounting to Rs4.511 billion . It also agreed to fund the rehabilitation of four bypasses including Quetta Western Bypass and construction of four bridges amounting to Rs4.162 billion depending on the finalisation of modalities and approval of project cycle. The aid agency, however, indicated provision of a total grant of $90 million after approval of the US government for the proposed schemes. The Economic Coordination Committee (ECC), in a meeting held on January 8 , was informed that USAID, based on its past experience in the Federally Administered Tribal Areas (Fata), had suggested that the FWO should undertake construction of the highway and a reputed company should supervise it. Participants of the meeting pointed out that the Public Procurement Regulatory Authority (PPRA), keeping in view its earlier correspondence with the Economic Affairs Division (EAD), was of the view that USAID did not come under the ambit of PPRA Rule-5. EAD also suggested that funds for the Kalat-Quetta-Chaman road fell under the Pakistan Enhanced Partnership Agreement, which is an international treaty. They noted that engaging the FWO in executing the remaining project was covered by PPRA Rule-5. They sought ECC’s approval for the award of the remaining work and rehabilitation activity, including construction of four bridges, to the FWO as permitted in PPRA regulations. The body agreed to the award of contract, but said a revised PC-1 should be prepared and cleared by the National Highway Authority board. It would be submitted to the Central Development Working Party for clearance and later to Ecnec for formal approval.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Express Tribune (Pakistan)

Story Tools