EOT KC-04 (Extention of Time)

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Subject: Kachhi Canal Project Contract KC-04,Earth work, Canal Lining and
Structures From RD 106+000 To RD 530+400 and part of Structures
From RD 40+000 To RD 106+000;Extension of Time up to 31-12-2014

1. Brief History
The Contract for KC-04 for construction of Main Canal from RD 106+000 to RD 530-400
(Earth work, Lining and structures) was awarded to M/s SMADB-Lilley-Shah Rukh (JV)
at a cost of Rs. 9737.012 million The works commenced on 13-07-2005 and Scheduled
Completion dates of Section-I and Section-II were 09-01-2007 and 06-01-2009
respectively.
The works could not be completed with in the Stipulated Period and Completion date of
both the section was extended by the Authority up to 31-12-2010 by granting extension of
1451 days for Section-I and 724 days for Section -II respectively.
The works could not be completed due to non-payment of their IPCS, cash flow problems,
damages caused due to August-2010 Flood and other unforeseen events being beyond the
control of contractor. The Authority accorded approval for 731 days extension of time for
completion of contruct-KC-04 from 01-01-2011 to 31-12-2012.
The contractor has contented interalia that work could not be completed during the previous
extended period due to Delay in Payment, Suspension of work under clause 69.4 COC,
construction of additional structures and Delay in settlement of claims. The contractor has
requested extension in completion period up to 31-12-2014.
2. REASONS OF DELAY
i. Delay in Payment and Suspension of work under clause 69.4 COC
The contractor has claimed that due to delay in payment work was suspended and during
extended period work remained suspended with effect from 20-05-2010 till 28-02-2012
(21 months and 3 days) and we are entitled to the extension of 21 Months on the basis of
this ground.

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Engineers Assessment
Current period of extension was from 01-01-2011 to 31-12-2012 (731) days. During
extension period payment of some IPCS was delayed and work remained suspended. It is
acknowledge that contractor faced cash flow problems due to accumulation of pending
liabilities, which is one of the major reason of delay and also work remained suspended.
Thus extension of 300 days is recommended on this account.
ii. Construction of Additional Structures
The contractor is of the view that most of structures along Kachhi Canal Project are
designed with under capacity because authentic rain fall data was not available due to
which consultants designed Low Capacity Structures. The rain fall and floods accured
in 2010 was beyond their capacity and 13 nos structures were redesigned at higher
capacity.
The capacity of 04 number cross drainage structures was enhanced keeping in view the
current discharge of floods in the area on the basis of ground realities no extension is
recommend on this account as this was already considered in the previous EOT.
iii. Delay in Settlement of Claims
The contractor has informed that, their claims for Idle Machinery & workmen amounting to
Rs. 9832 Millions are pending.
Period of delay claimed by the contractor has been thoroughly examined by the Engineer
on the basis of ground realities and consider no extension of time on this account.
iv. Non Payment of Interest Charges against Delayed Payment of IPCs
WAPDA has failed to make payment of IPC within the prescribed period mentioned in the
clause 60.1 and 60.2 of the contract. Approximately Interest charges amounting to Rs.400
Million is to be paid on account of delay by the Employer (WAPDA). More than
23 months have been expired but no payment has been made by WAPDA.

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Delay period has already been considered therefore no separate extension is considered
by the Engineer on this account
v. Heavy Storm Rain / Flood During 2010 2012
Since over 50 to 100 years, the cyclone of flood was higher in the month of July and
August due to heavy rains / Floods from mountains badly affected adjacent areas of
Canal. The crops were completely damaged. The local land lords made cuts in the Canal
at 126 places along with 130 Km of Canal to save their houses and life. Ultimately the
Canal was filled with Silt / Debris and Structures were badly damaged. Their plant and
Machinery was also damaged and submitted claim to National Insurance Company Limited
amounting to Rs. 1965 Million.
It is agreed that flood August 2010 was unprecedented in hundred year history of the area
and caused severe damages to canal and also hampered construction activities. Delay on
this account was considered in the previous EOT hence no extension is recommended by
the Engineer on this account.
vi. Lost due to Terrorism
As per clause 20.4 (C) of the contract, the cost of losses is to be paid to the contractor by
the Employer as Insurance Policy does not cover the loss. At least 8 months extension is
required on account of this reason.
On the basis of ground realities no extension has been considered by the Engineer on this
account.
vii. WAPDA failed to Hand over the site due to Non Removal of Hindrances,
Incompletion of Gaps in Lining due to Existence of Earthen Embankment of
water course crossing on RD 106 to RD 531
WAPDA failed to hand over site since last five years and contractor can not construct foot
bridges and water course under Canal Lining. The farmers and local people are not
allowing the works in these gaps. WAPDA may kindly arrange to hand over these places
as early as possible. At least 6 months will be required.
It is agreed that some sites have not been handed over to the contractor by WAPDA.
Contractor gas been asked to give schedule of work against these sites so that these sites
be handed over to the contractor. The Engineer is of the view that 6 months extension on
this account is recommended
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3. Engineers Conclusion
Keeping in view the reasons of delay claimed by the contractor an extension of time up to
30-06-2014 is considered as justified. The breakup of events of delays and recommended
time is summarized blew

4. Engineers Recommendations
The Engineer recommends for the grant of EOT in respect of contract KC-04 for the period
from 01-01-2013 to 30-06-2014 with the admissibility of escalation/de escalation as per
clause 70.1 conditions of contract. The contractor will also be entitled for EOT claim of 545
days between the period (01-01-2011 to 31-12-2012).

Sr.No Reason of Delay
Contractors
Request
Recommendation by the
Engineer KCC
1.
Delay in payment and Suspension
of work under clause 69.40 of
COC
633 days 365 days
2.
Construction of Additional
structures
-----
3. Delay in settlement of claims -----
4.
Non payment of interest charges
against Delay payment of IPCS
-----
5.
Heavy Strom Rain/Flood during
2010-12
-----
6. Loss due to Terrorism 240 days -----
7.
WAPDA failed to handover sites of
w.c crossings
180 days 180 days
Total Days 545 days

EOT KC-04 (Extention of Time)

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What are the reasons for delay in completion of the Kachhi Canal Project?

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