PESHAWAR: The Khyber Pakhtunkhwa government and the contractors of the Peshawar Bus Rapid Transit project have agreed to settle the payment issue.

Official sources told Dawn that a draft agreement for the purpose had been prepared and would be signed by the construction firms and Peshawar Development Authority after the cabinet’s approval.

The PDA has agreed to pay Rs2.6 billion to the contractors against their claim of Rs11.653 billion in outstanding payments, according to documents. They also revealed that the government would close the ongoing inquiry and investigation by the National Accountability Bureau (NAB) into alleged irregularities in the bus project.

The official documents said that NAB had taken cognisance of the allegations of the irregularities in the award of the BRT contract and project execution, including delay in completion, resulting in a loss to the exchequer and that an investigation in that regard was in progress.

Draft agreement ready, to be inked after cabinet’s nod

“The government having meetings with the NAB, has agreed that in view of this amicable settlement agreement, NAB shall close, withdraw and terminate all proceedings under Section 9 of the National Accountability Ordinance, 1999 as the case may be within two months after signing of the settlement agreement and that such proceedings shall not be reopened or revived in any manner that so ever,” read the draft agreement.

Similarly, the Federal Investigation Agency (FIA), which had also started a probe into the matter on the orders of the Peshawar High Court, would close its inquiry within 60 days on the basis of an amicable settlement.

The contractors, who had set up joint ventures for executing the project including three reaches, will in return withdraw all the proceedings and claims pending before the “Dispute Resolution Board” and the International Court of Arbitration (ICA).

The contractors have submitted several disputes/claims to be resolved through formal/contractual processes by the Dispute Resolution Board (DRB) and International Court of Arbitration (ICA), of the International Chamber of Commerce (ICC) as stipulated in the contracts and or under the applicable law, read the draft agreement available with Dawn.

It is worth mentioning that the contractors have filed a claim in the ICC for Reach-1 of the project amounting to Rs31.55 billion, which includes interest of Rs18.6 billion on the unpaid amount in accordance with clause 14.8 of the contract signed by both parties and the ICC has already accepted the case for conducting the arbitration proceedings.

The agreement further reveals that the contractors also have claims for the other five subjects of the project which they may file in ICC.

Under the draft agreement, there shall be no bar or restrictions whatsoever on the contractors to participate in future tenders and execute local or foreign-funded projects of the public sector for provincial and federal governments. As per the execution plan of the agreement, the government is responsible for taking approval/authorisation to sign this agreement from the provincial government/cabinet.

Both parties will give an application for an early hearing in the PHC and will present this agreement in the court for endorsement by all parties including NAB.

“On receipt of a cheque of Rs2.6 billion from the government, the contractors shall immediately withdraw all the claims and proceedings pending in DRB and ICC/ICA,” it said.

The draft agreement said on the termination of the investigation by the NAB, the names of contractors and all others concerned would be removed from the Exit Control List, Stop List and PNIL.

It added that on implementation of the agreement, all disputes and claims related to the parties against each other, in respect of the BRT project shall come to an end including waiver of claims, liabilities, damages, rights and interest by or against both the parties wherever those are sub judice.

Official sources said a summary had been moved to the chief minister by the local government department for being tabled before the cabinet for approval.

The summary, a copy of which is available with Dawn, reads, “The approval and communication of the agreement is a time-constrained activity i.e. it has to be finalised by Aug 29, 2024. The reason for this urgency is the Aug 30 deadline set by ICA for both PDA and contractors to deposit the mandatory arbitration fee which amounts to Rs536.35 million for a single arbitrator.”

Published in Dawn, August 29th, 2024