ISLAMABAD, Sept 27: The government has decided to award the contract for construction of Rs13 billion Gomal Zam Dam to Frontier Works Organisation (FWO) and a Turkish firm Tekser, it is learnt.

The work on the project was suspended in October last year. A senior government official confirmed that top-level contacts with China to ensure resumption of work on it had failed.

A meeting presided over by President General Pervez Musharraf and Prime Minister Shaukat Aziz was informed on Tuesday that negotiations of Wapda with the FWO and Tekser to complete the project were in advanced stages. The two companies were the second lowest bidder in the original bidding.

Informed sources told Dawn that contract for construction of the dam would be awarded to Tekser of Turkey while irrigation component of the project would be entrusted to FWO.

A senior government official confirmed that negotiations with the original contractor had reached a complete deadlock, owing to an element of blackmailing, and it was decided to give a chance to the second lowest bidder to complete the project.

The Chinese contractors of the project had terminated the original contract a year ago and asked Wapda to negotiate a new contract on the basis of prevailing market prices of material. The Ministry of Water and Power and Wapda, however, had rejected their demand.

The ministry and Wapda were of the opinion that if the contract was renegotiated on the basis of current market rates, its total cost would go up by more than one hundred per cent and the runner-up bidders would go into litigation due to which the project would be further delayed.

The contractors — M/s China National Water Resources & Hydropower Engineering Corporation and Hanbiw Power Engineering Company — had stopped work on Gomal Zam project in October last year after kidnapping of two Chinese engineers, one of whom was subsequently killed and the other injured in the recovery operation.

The sources said top-level political leadership of Pakistan and China had resolved that the contractors would resume work and arrangements would be made for stringent security by Wapda and the federal government on the site of the project. However, the contractors did not agree to resume construction.

The sources said Wapda had also agreed to pay about 25 per cent of the contract price to the Chinese contractors to facilitate them resume work.