Strategy on dispute with Impreglio to be finalised today

By Khalid Mustafa

ISLAMABAD: Pakistan will decide today (Wednesday) whether to contest or settle out of court a case with an Italian firm over payments in the Ghazi Barotha Hydropower Project (GBHP).

The International Centre for the Settlement of Investment Disputes (ICSID) recently told the Government of Pakistan to respond a petition filed by Impreglio for arbitration, in which it is seeking the recovery of $450 million it invested in the GBHP.

According to sources, Water and Power Secretary Riaz A Khan will chair a meeting today to decide the government’s next step. Law and Justice Secretary Mansoor Ahmad, WAPDA Chairman Lt General (r) Zulfiqar Ali Khan, Pakistan Attorney General Makhdoom Ali Khan and the Finance minister’s Legal Advisor Dr Tariq Hassan will attend.

The dispute between WAPDA and Impreglio, which is a contractor of the 1450 MW GBHP, arose when WAPDA refused to comply with a decision by the Dispute Resolution Board (DRB). The DRB, constituted to resolve any dispute between the contractor and WAPDA, ruled that WAPDA should give Impreglio the $450 million it demanded.

WAPDA refused to comply, saying it had paid the company for all the work it had done, and that Impreglio had not invested a single penny as it was just a contractor. Impreglio then moved the ICSID.

The company says WAPDA owes the money because it has done extra work which was not mentioned in the PC-1 (project digest) of the project and was not in the contract signed with WAPDA.

ICSID rejected the government’s position on the dispute, submitted on February 27, telling Islamabad to prepare its case for arbitration.

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