FCC clears hurdles to completion of Nai Gaj Dam, orders work under original contract

The Federal Constitutional Court (FCC) has cleared a major hurdle for the long-delayed Nai Gaj Dam project, setting aside Sindh High Court orders that had allowed the contractor to claim price escalation beyond the original contract terms. A two-judge bench directed the contractor, NEIE SMADB-LILLEY-RMS Karachi, to strictly adhere to the original contract, an arbitral award, and a memorandum of understanding signed in September 2021.

The court's decision aims to ensure the uninterrupted execution of the project. The FCC expressed its expectation that both the contractor and Wapda (Water and Power Development Authority) would fulfill their commitments to complete the dam. This ruling intervenes in a dispute that had stalled progress, with the Sindh High Court previously permitting claims for increased costs that exceeded the initial agreement.

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The FCC also ordered that the remaining work be completed strictly in accordance with the original contract, the arbitral award and the Sept 21, 2021 memorandum of understanding (MoU).

The FCC's intervention seeks to bring finality to the dispute, emphasizing adherence to the established contractual framework. The project's completion is now expected to proceed under the terms originally agreed upon, without further disputes over pricing, marking a significant step towards realizing the dam.

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The FCC also ordered that the remaining work be completed strictly in accordance with the original contract, the arbitral award and the Sept 21, 2021 memorandum of understanding (MoU).