PESHAWAR: The Peshawar High Court has extended a stay order in favour of the contractors of the Utla Dam project, directing the provincial government not to encash their bank guarantees to the tune of Rs111.66 million.

A bench consisting of Justice Syed Mohammad Attique Shah and Justice Sahibzada Asadullah issued the order on two petitions of the contractors, who challenged the winding up of the Utla Dam project for supplying drinking water to Swabi and cancellation of its agreement with them.

It directed counsel for the petitioner, Alamzeb Khan, to produce a rejoinder to the comments filed by the respondents, including the provincial government, to the petitioner.

The hearing will be fixed later.

The petitions were filed by a joint venture of Qalandar Bux Abro and Co and Yaqoob Shah and Sons with a request for stopping the government from taking any action against them and about the encashment of their bank guarantees.

Asks govt not to encash bank guarantees of contractors

The petitioner has requested the court to declare illegal the decisions taken on July 29, 2024, during a meeting chaired by the additional chief secretary (planning and development).

The meeting had tasked the public health engineering department with submitting PC-II for a new feasibility study to explore alternative drinking water options, while the irrigation department was asked to immediately cancel the agreement with the contractor or consultant as the scheme wasn’t reflected in the ADP 2024-25.

The petitioner also requested the court to declare illegal a letter sent to them by the directorate general (small dams) of the irrigation department on Aug 7, 2024, declaring that the Utla Dam project has been ‘closed down’ and the contractor should immediately refund the remaining mobilisation advance of Rs111.66 millionto prevent the encashment of the bank guarantees submitted by the petitioner in favour of the government.

Advocate Alamzeb Khan said that in light of the original PC-I of the scheme, Rs1.5 billion was approved by the PDWP to provide 3.5 cusecs of drinking water to 45 villages.

The lawyer said that the petitioner was given the acceptance letter by the deputy director (small dams) on July 10, 2018.

He said on the directions of PDWP in its meeting on Jan 4, 2021, a panel of experts was constituted to technically examine the design, estimates and certain other observations regarding the project.

The counsel said that after considering all the aspects, the design and estimates were reviewed by the PDWP on Jan 27, 2022, and the cost of project was enhanced to Rs2.2 billion.

He said the experts declared that there was no alternate source, which could be explored for addressing the issue of drinking water to the area.

The lawyer said on Dec 28, 2023, a meeting was held under the chairmanship of the additional chief secretary (P&D), wherein it was recommended to cap the work done at the site and the irrigation department should move a summary for deletion of the scheme from the ADP.

He said that after the petitioner had challenged that decision the advocate general had informed the court in Feb 2024 that the government hadn’t taken any decision on the matter and the matter would be decided in the next cabinet meeting.

The lawyer argued that despite recommendations of a technical committee to review the decisions taken in the meeting of Dec 28, 2023, about the winding up of the project, no review had been made and instead, respondents were bent on closing the project.

Published in Dawn, November 9th, 2024