IWSG project contractors serve suspension notices
ISLAMABAD: Contractors of the multi-million-dollar Islamabad–West Grid Station (IWGS) project, funded by the World Bank, have served notice of suspension of work due to alleged non-performance of contractual obligations by the Employer — National Grid Company (NGC), formerly NTDC, well-informed sources told Business Recorder.
According to official communication, the World Bank Resident Mission and the Ministry of Economic Affairs have informed the Power Division that the contractor has issued a “formal notice of non-performance, outstanding reimbursement, and intent to suspend works” under contract No. WB-DTLP-IWGS/2024.
The Joint Venture (JV) of NWEPDI–TBEA, Northwest Electric Power Design Institute Co. Ltd. of China Power Engineering Consulting Group, in its letter to the Employer and World Bank, cited earlier correspondence, including formal notice Ref: NWEPDI-ISW-NTDC-354 of July 30, 2025, and several follow-up meetings. The JV maintained that the issues remain unresolved despite repeated engagement.
The contractors stated that project execution has been severely affected by a funding shortfall, primarily due to non-reimbursement of Rs 284,599,732 deposited under Schedules 2 and 4. As a result, vendor production has slowed, critical site activities have been disrupted, and a chain of delays has emerged.
The JV contended that delays are attributable solely to the Employer’s non-performance, not the contractors, and reserved the right to seek both time extensions and liquidated damages under the contract. The letter further recalled a request dated August 25, 2025, for a definitive timeline on reimbursement of outstanding sales tax amounts, which remains unaddressed. The absence of such a timeline, it argued, has disrupted project cash flows, procurement, and resource allocation, creating “unacceptable operational and financial risks.”
The JV has demanded immediate corrective measures, including a clear reimbursement schedule and resolution of all outstanding matters, warning that failure to do so will leave the project economically and operationally untenable. In the event of non-compliance, the contractors said they would reduce the pace of work — and potentially suspend the project — in line with GCC Clause 41.2(a), with all costs and consequences to be borne by the Employer.
Meanwhile, the Ministry of Economic Affairs has asked the Power Division to urgently address the contractors’ concerns to ensure that progress on the World Bank–funded project remains unaffected.—MUSHTAQ GHUMMAN
