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March 6, 2019

Mohmand Dam project: Wapda okays award of Rs165.5 billion contract to Gezhouba-Descon JV

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March 6, 2019

ISLAMABAD: Pakistan Water and Power Development Authority (Wapda) has formally accorded approval to award the contract of Mohmand Dam to Joint Venture of Gezhouba-Descon which will construct the whole project with Rs165.523 billion.

The Gezhouba-Descon factually came upon with the evaluated financial bid price of Rs183.523 billion excluding provision sum of Rs40 billion, but the Wapda authorities managed to get discount of Rs18 billion in evaluated bid price after negotiations meaning by that contractor will build the dam at the cost of Rs165.523 billion. The Mohmand Dam will be completed in five years and 8 months’ time on River Swat about 5 kilometer upstream of Munda Headworks in tribal district Mohmand, Khyber Pakhtunkhwa.

Once the dam is completed, it will extend every year mammoth benefits amounting of Rs51.6 billion. In Descon, the biggest shareholder is Federal Minister Razzak Dawood who is currently holding the portfolios of commerce, trade, industries and production, textile and board of investment. The minister already told this in the news programme Naya Pakistan in first week of February, 2019.

Earlier, Wapda was trying to get the discount of Rs50 billion but the negotiated settlement has reached with just Rs18 billion discount in the evaluated bid price of China Gezhouba-Descon. The official said that under the PPRA rules, once any party wins the project, then no negotiation on the price is allowed, but in this case, the contractor has given the discount of Rs18 billion in the evaluated bid price of Rs183.523 billion.

Wapda spokesman confirmed the development saying that following a comprehensive bidding and evaluation process and exhaustive technical negotiations, the Wapda in a meeting held on February 22, 2019 accorded approval to award contract to CGGC-DESCON Joint Venture (JV) for civil and electro-mechanical works of Mohmand Dam Hydropower Project, amounting to Rs183.523 billion plus provisional sum of Rs.40.940 billion. The evaluated Bid Price has been reduced by Rs.18 billion.

The official said that the amount of Rs40 billion is not part of the evaluated financial bid, but this amount will be used for contingencies requirements, any change in the design at the site during the execution of the project. The said amount can also be used for some variations in the project under special circumstance.

After giving the Letter of Acceptance, the contractor---JV of Gezhouba-Descon, will deposit the performance guarantee and mobilization advance guarantee and against the guarantees, the contractor will be provided the free of interest 10 percent of total price bid for mobilisation of machinery and other equipment to the site of the Mohmand Dam. The contractor will have to move to the site of the project within 28 days from the issuance of letter of acceptance.

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