PESHAWAR: The Khyber Pakhtunkhwa cabinet has approved a draft agreement between the Peshawar Development Authority (PDA) and BRT contractors, especially Maqbool Calsons JV, to resolve a dispute of billions of rupees.
After signing the agreement, the PDA will pay Rs2.6 billion in arrears, while the contractors will withdraw their Rs154 billion claim from the International Court of Arbitration (ICC) in France.
In March, Maqbool Calsons JV, consisting of Pakistani and Chinese firms, filed a case against PDA Peshawar with the ICC, requesting the international arbitrator to intervene for the payment of the arrears. A fee of $6,000 was also paid to the ICC.
Previously, the ICC had proposed mediating the arrears dispute between the BRT project contractors and the PDA in Islamabad instead of abroad.
On April 24, 2024, the PDA director-general received a letter from the ICC head office, stating that a three-member arbitral tribunal would be constituted in Islamabad to settle the arrears of the BRT project. Both parties were supposed to pay $758,000 for the proceedings.
The contractors had approached the ICC for the arrears of Rs154 billion in March 2024 and agreed to settle through negotiation.
According to official documents available to HUM News English, the National Accountability Bureau (NAB) will wind up all investigations against the BRT contractors once both parties signed the agreement. All inquiries will be closed and will not be reopened. Additionally, both parties will inform the high court about the agreement.
The agreement stipulates that PDA will issue performance certificates to the contractors, and all audit paras and arrears claims will be settled. The provincial government will transfer funds to PDA from its own account or from Trans Peshawar Company to pay the BRT contractors.
Sources said that in the provincial cabinet meeting chaired by Khyber Pakhtunkhwa Chief Minister Ali Amin Gandapur in Islamabad, PDA Director-General Khalid Mahmood presented the agreement details in the form of a summary. The provincial cabinet was briefed on the efforts to settle the arrears dispute between the two parties.
The PDA director-general informed the cabinet that after extensive negotiations and discussions with other financial institutions, including NAB and the Asian Development Bank (ADB), the agreement had been finalized.
A summary of the agreement was presented to the provincial cabinet meeting for approval. According to the summary, a dispute over the payment of arrears started in 2020 between the BRT contractors and the PDA. Both parties submitted 70 claims to the local arbitration board, but after the arbitration board’s decision, both parties expressed dissatisfaction, preventing the implementation of the decisions.
In 2021, the contractors approached the ICC but later withdrew the case. In March 2024, the BRT Peshawar contractors again went to the International Arbitration Tribunal, filing a case against PDA for arrears of Rs154 billion.
The approval of the draft agreement by the Khyber Pakhtunkhwa cabinet marks a significant step towards resolving the long-standing dispute and ensuring the smooth running of the BRT project without further financial and legal hurdles.