FIRST DRAFT

MANGLA DAM RAISING PROJECT Claims Report May 2005 Prepared by J.Halcro-Johnston, Contracts & Claims Specialist for Mangla Joint Venture (MJV)
1. CONSTRUCTION OF BLANKET AREAS UB1 & UB2 ON SUKIAN DYKE Origin Contractors letters dated 29 January & 8 March 2005

ResumThere are, in effect, two claims subjects, (1) that, at the time when construction was scheduled to begin in mid February, the water level in the reservoir was above the level necessary for the work to be carried out in the dry, as shown by levels on the Contract Drawings, and that therefore the work has had to be deferred to next year, and (2) that the actual levels of the area to be blanketted, as shown by underwater surveys are locally much lower than the levels on the Contract Drawings (by as much as 75 ft) because of the presence of a number of deep gulleys or gorges. Relevant Correspondence 22 Oct. 04 CWEJV to CM MJV 8 Nov. 04 CM MJV to CWEJV 15 Dec. 04 CWEJV to CM MJV 21 Dec. 04 CM MJV to CWEJV 29 Jan. 05 CWEJV to CM MJV 21 Feb. 05 CM MJV to CWEJV 8 Mar. 05 CWEJV to CM MJV 24 Mar. 05 31 Mar. 05 25 Apr. 05 31 Mar. 05 CWEJV to CM MJV CM MJV to CWEJV CWEJV to CM MJV CM MJV to CWEJV Ref 175 Ref 2475 Ref 378 Ref 2735 Ref 0547 Ref 3237 Ref 0701 Ref 0786 Ref 4223 Ref 0961 Ref 4223 Enclosing Method Statement

With survey & proposal With table of reservoir levels + survey drawing of UB1 & UB2 With plot of reservoir levels + further survey drawing

Narrative 1) Reservoir Water Levels The Contractors claim that high reservoir levels disrupted his work schedule for construction of UB1 & UB2 during the 2005 season was presented in his letter of 8 March. The construction of the Upstream Blankets is carried out in an area upstream of the dam itself, so that it is apparent that reservoir levels are critical for this operation if the work is to be carried out in the dry, as the Specification and drawings require. The Contractors letter records that the level of the reservoir increased during January and early February 2005 to reach a peak of 1128.9 ft on 18-20 February, before then dropping away again. Further, The Contractor states that the level was above 1100 ft, the critical elevation necessary for work on UB1 & UB2, from 28 January until 8 March. He states that the work was in fact scheduled to begin in mid February, but that this was not possible because of the high water levels, and he therefore asks for an extension of time, with costs, to allow the work to be deferred to next year. The CM, in his reply of 31 March, disputes the scheduled start date for this work, which he says was 1 January, and he also refers to Clause 9.40 of the Special Provisions of the Contract. This clause states that the Employer undertakes to maintain the reservoir level at 1100 ft, plus 15 ft flood freeboard allowance, for 30 days in March/ April of each year, whereas the actual level, including December and January, has been within this range for more than 70 days this season. He also draws attention to the Contractors approved Method Statement, which proposed the construction of an earth cofferdam at crest level 1125 ft to allow dewatering of the critical areas, which work had not even started in mid February, and he points out other delays to the programme, including

FIRST DRAFT preparing the silt borrow area, carrying out the trial embankment and back filling of UB4 & UB5. The Contractors reply to the CMs response says that the Engineer has ignored the physical conditions, specifically that both UB1 & UB2 were partly and sometimes fully under water, that the proposed cofferdam at El 1125 ft would have been overtopped by the actual water levels this year and that because of the very low ground levels (see below) underground seepage could not have been stopped. 2) Actual Ground Levels The Contractors letter of 29 January first drew attention to the fact that ground conditions in the area of UB1 & UB2 are different from those shown on the Contract Drawings. Specifically, the survey drawing and other documents attached to his letter show that a number of deep gorges exist, with ground levels much lower than on the drawings, and the clay beds, with which the blankets are designed to seal, are different in both extent and quality. The Contractor put forward proposals to bulk fill the gorges under water and then fill in compacted layers above water level, using either excavated material from UB1 & UB2 or imported silt, and finish with curtain grouting, before then constructing the blanket, which would then extend in area to provide a satisfactory seal with existing clay strata wherever they outcropped. He pointed out that time was tight for a decision to be taken and the work carried out this season. The CM replied in his letter of 21 February to say that the Contractors proposals were found to be unrealistic and unconvincing under present site conditions, and insisting that the Contractor proceed in compliance with his original Method Statement, which included dewatering behind an earth cofferdam. The Contractor submitted a further letter on 24 March to say that, from soundings taken in the reservoir, ground levels down to El 1025 ft had been ascertained for the gorges. In these circumstances, he pointed out that the work would be much more difficult to carry out and would take much longer, and he asked for a longer possession and at a much lower water level than is allowed in Clause SP9.40. He also asked the Engineer to issue a Variation Order for this work. This letter is currently (May 2005) being studied by the Engineer. Relevant Records The daily water level records for the reservoir have been collected and these are not in dispute. The record shows that the reservoir was at or below El 1100 ft from 10 Dec. to 27 Jan. (49 days) and from 27 Mar. to 6 Apr. (11 days), a total of 60 days. The approved construction schedule for UB1 & UB2, valid at the start of January, shows the following: UB1 Joint survey before excavation Site cleaning & bulk excavation, including cofferdam Gravel fill Joint survey after gravel fill UB2 Joint survey before excavation Site cleaning & bulk excavation, including cofferdam Gravel fill Joint survey after gravel fill Start 8 Feb. 05 Start 10 Feb. 05 Finish 19 Mar. 05 Finish 19 Mar. 05 Start 31 Dec. 04 Start 1 Jan. 05 Finish 4 Apr. 05 Finish 5 Apr. 05

The supplementary surveys carried out for the deep gorges, particularly the soundings taken in the reservoir, were obtained by the Contractor, and have not yet been verified by the Engineer. These will need to be checked and verified, and, in addition, the reservoir bed survey should be extended by up to 300 yds from the end of the blanket. This latter survey will in any case be necessary if it is determined to construct an earthfill cofferdam (max height 100 ft plus).

FIRST DRAFT The Contractor has not yet made any attempt to quantify his claim, either for delay in working or for lower ground levels, so it is not yet possible to collect relevant plant, personnel and equipment records. When such details are submitted, it will be necessary to check these in detail against daily site records. Contractual Position The Contractor has stated that his claim arising from the rise in reservoir water levels is submitted under Clause 12.2 of the Conditions of Contract, Not Foreseeable Physical Obstructions or Conditions. It should be noted that this Clause specifically excludes climatic conditions on the Site as well as conditions due to climatic conditions (see Conditions of Particular Application, Part IIB, Clause 12.2). From this, it may reasonably be argued that reservoir levels, in so far as they are primarily influenced by rainfall in the catchment, are specifically excluded as a Not Foreseeable Physical Condition. In any case, in order to establish a justifiable claim under this Clause, the Contractor will need to demonstrate that the rise in reservoir water levels of the magnitude indicated could not reasonably have been foreseen by an experienced Contractor. As regards the matter of the low ground levels, the Engineer is still studying the design implications of this. If it is decided that the nature of the work necessary to seal the strata in these areas is fundamentally different from that shown on the Contract Drawings, and the specification for the work is different, then this work should be instructed under Clause 51 of the Conditions of Contract, Variations, with the price determined under Clause 52. In this circumstance, there will be no basis for a claim, although the Contractor will justifiably expect the price of the variation to reflect the delay in the work and any costs that he will have incurred. Issues to be Addressed The main issue to be addressed at this stage is whether the extent of the rise in reservoir water levels in February 2005 was a circumstance that could not have been reasonably foreseen by an experienced contractor. Analysis and Discussion The Contractor was provided during the tender period, inter alia, with the historic record of reservoir levels from 1967/8 to 2001/2, 35 years. From this information, he would have been able to estimate the probability, on a statistical basis, of the reservoir being at or below a particular level at each season of the year. These probabilities, from the historic record that he was given, are shown in the chart below, along with the actual reservoir levels for the 2004/5 season.

2004/5 Water Levels against Level Probability

1220 1200 1180 1160

Elevation

2004/5

1140 1120 1100 1080 1060 1040 01-Oct

90% 70% 50% 30% 10%

01-Nov

01-Jun

01-Aug

01-Sep

01-Jul

01-Jan

01-Feb

01-Mar

01-Dec

01-Apr

01-May

01-Oct

FIRST DRAFT It can be seen that water levels in the last quarter of 2004 were at an historic low but that they rose steadily through January and February before dropping back to a comparatively normal level in March & April. The rise in water levels in February was unfortunate in terms of the Contractors delayed programme but it must be noted that a modest rise in water levels in February is a feature of the historic record, and might reasonably have been expected. The fact that the water levels were at an historic low level through December and much of January is of interest, but if the Contractor had not programmed to carry out his critical work then, and he was not able to bring forward the work for other reasons, then it must be accepted that this was not of practical benefit to him. 2. ACQUISITION OF BORROW AREAS Origin Contractors letter dated 26 October 2004 and subsequent letters.

ResumThe Contractor claims that he has been obstructed, both by official and by unofficial action, from acquiring land for excavation of borrow material and from working borrow areas that he believes he is entitled and expected to work under the Contract. The separate themes to the Contractors claim, all relating to problems that he says he has encountered, can be identified as (a) the intervention, or lack of intervention, by the Employer to facilitate the acquisition of the required areas, (b) legal intervention, including court orders, brought by various parties to specifically stop him from working borrow areas and (c) the intervention of the local populace, sometimes armed and sometimes supported by the local police, that have physically interfered with or prevented him from working borrow areas. Relevant Correspondence 26 Oct. 04 CWEJV to CM MJV 27 Nov. 04 CWEJV to CM MJV 2 Dec. 04 CM MJV to CWEJV 7 Dec. 04 CM MJV to CWEJV 11 Dec. 04 Descon to WAPDA 14 Dec. 04 CWEJV to CM MJV 23 Dec. 04 CWEJV to CM MJV 28 Dec. 04 CWEJV to CM MJV 28 Dec. 04 WAPDA RE Mangla 31 Dec. 04 CM MJV to CWEJV 1 Jan. 05 CWEJV to WAPDA 18 Jan. 05 CWEJV to CM MJV 7 Feb. 05 CWEJV to CM MJV 8 Feb. 05 CM MJV to CWEJV 25 Feb. 05 CWEJV to CM MJV 26 Feb. 05 CWEJV to CM MJV 12 Mar. 05 CWEJV to CM MJV 19 Mar. 05 CWEJV to CM MJV 19 Mar. 05 CWEJV to CM MJV 22 Mar. 05 CWEJV to CM MJV 2 Apr. 05 CM MJV to CWEJV 5 Apr. 05 CWEJV to CM MJV 6 Apr. 05 Mineral Dept. Mirpur 7 Apr. 05 CM MJV to CWEJV 8 Apr. 05 CM MJV to CWEJV 12 Apr. 05 CWEJV to CM MJV 16 Apr. 05 CM MJV to CWEJV 20 Apr. 05 CWEJV to CM MJV 20 Apr. 05 Descon to WAPDA 25 Apr. 05 CM MJV to CWEJV 30 Apr. 05 CM MJV to CWEJV 2 May 05 CM MJV to CWEJV Ref 0183 Ref 0302 Ref 2623 Ref 2643 Ref 007 Ref 0364 Ref 0409 Ref 0414 Ref 616-18 Ref 2822 Ref 001 Ref 0515 Ref 031 Ref 3134 Ref 0650 Ref 0655 Ref 0713 Ref 0770 Ref 0772 Ref 0771 Ref 4233 Ref 0930 Ref 26-28/05 Ref 4280 Ref 0854 Ref 0885 Ref 4357 Ref 0930 Ref 0012 Ref 4433 Ref 2735 Ref 4524

Borrow Area No. 5 Borrow Area No. 5 Borrow Area No. 5 Dehri Rustum Forwarding WAPDA letter Possession of Dehri Rustum River Bed - Ladhar With copy of legal order Timber Causeway Jhelum River Bed To WAPDA, forwarded to CM Jhelum River Bed Forwarding M & M Dept letter

Previous letter reissued

FIRST DRAFT 3 May 05 4 May 05 6 May 05 9 May 05 CM MJV to CWEJV CWEJV to CM MJV CM MJV to CWEJV CWEJV to CM MJV Ref 4537 Ref 1016 Ref 4575 Ref 1027

Timber Causeway

Narrative Under the terms of the Contract, responsibility for the procurement of borrow material for filling, including land acquisition and payment of royalties for mineral extraction, is placed wholly on the Contractor. In this respect, the Contract treats borrow material as being in the same category as any other material purchased by the Contractor for incorporation in the Works, the governing factor being not the source but the compliance of the material with the Specification requirements. There is no mention of borrow pits in the description of the Site in Special Provisions Clause 1.2, nor are any borrow pit locations shown on the Contract Drawings, so that work in borrow areas is treated as being external to the operations that are carried out, and regulated in the Contract, within site boundaries. These provisions were explained to tenderers at the time of the site visit. Notwithstanding these provisions of the Contract, specific locations for suitable borrow material for the Works were investigated before the start of the project and the results of these investigations were provided to tenderers for the purpose of tendering. The locations and material types available at each location were given, as follows: 1. 2. 3. 4. 5. 6. 7. 8. Name Sanatha Hills Timber Causeway Jhelum River Bed Intake Area Kharak Island Suketar Nullah Dheri Rustam D/s Jari Dam Material Clay, sandstone Gravel Gravel Sandstone Silt Gravel Silt Silt, Sandstone, Clay Location Spillway right abutment Sukian Dyke left abutment D/s Main Dam Intake Dam left abutment Sukian Dyke left abutment D/s Jari Dam Jari Dam right abutment Various locations

In practice, the Contractor has focussed mainly, though not solely, on these specific areas for procurement of fill materials, for the obvious reason that they are strategically located in the most convenient places for the work. As can be seen from the extensive correspondence on the subject, issues relating to the procurement and working of borrow areas have a long and tortuous history. The subject of borrow areas appeared in the Minutes of Site Progress Meetings as early as 25 September 2004 but the subject was first raised by the Contractor as a serious problem in his letter of 26 October, and at the meeting of 28 October. In the letter and at the meeting, the Contractor raised the possibility that it might not be possible to reach an acceptable agreement with the lease holders of the mineral rights, and he asked the Employer to intercede with the regional authorities in the interests of the Project. The main sticking point at that time appeared to be a major disparity between the unit rate for abstraction of material that the leaseholders were demanding and the price that the Contractor was prepared to pay. At that meeting and the subsequent one, the Employer expressed his concern but intimated that it was the Contractors responsibility to resolve the matter. At the same time, ownership of the land became a key factor in the debate, in that land owned legally by the Employer, e.g. within the reservoir area, was deemed to be free of royalties and other payments. Specifically, the Contractor was advised to mark the 1240 ft contour in Borrow Area 5 and to only take silt from below this contour. Discussion at subsequent meetings and in correspondence showed that even land nominally owned by the Employer, e.g. Timber Causeway and Deri Rustum, was occupied by local people who, with the support of the regional authorities, were refusing to allow the extraction of material. The first intimation that the Contractor was considering registering a claim in respect of his difficulties over acquisition of borrow areas came in his letter of 27 November 2004.

FIRST DRAFT With this letter he attached a court injunction issued by Additional District Magistrate, Mirpur, stopping the abstraction of any fill material from borrow areas within Mirpur District. The CM replied expressing surprise that the Contractor had been abstracting material apparently in violation of the law, and instructing him to settle terms with the leaseholders. The Contractors problems in acquiring the borrow areas have been presented to the Engineer in a number of different ways. Initially he referred to them as designated borrow areas, thereby implying that there was a duty under the Contract for them to be made available to him by the Employer. He reinforced this argument by referring to the duty on the Employer expressed in Special Provisions Clause SP-17 to assist in dealing with Government Departments and licensing agencies. In his letter of 11 December, he asked for the Employer to intercede with the Punjab & AJK Governments to arrange for the leases of existing leaseholders to be revoked, though it is not clear whether this was in fact a feasible proposition. As is apparent from the Minutes of Site Progress Meetings, the Employer has made considerable effort to intercede on behalf of the Contractor, both at State Government level and with local agencies. In his letter of 14 December, the Contractor claimed that it was the Employers duty to provide the borrow areas under Clause 42.1(d), Possession of Site and Access Thereto, notwithstanding the provisions of the Contract that exclude the borrow areas from being part of the Site. Further, in his letters of 23 & 28 December which referred, inter alia, to a meeting in the Kharak area (Borrow Area 5) with the local populace, at which representatives of both the Employer and the Contractor were present, the Contractor expressed the view that the main issue with local persons was one of compensation for resettlement, an issue with which the Contractor would not normally be expected to have any role. On 28 December, the Employer forwarded a letter to the Engineer, which was then forwarded to the Contractor, to state that the Dehri Rustum borrow area was on land which was the subject of dispute between the Employer and the local development authority, and therefore asking the Contractor to seek an alternative source for silt material. In his reply of 18 January, the Contractor registered that he would seek compensation for the work already carried out to prove the Dehri Rustum resource. The CM replied to say that the Employer has no obligation to provide areas for borrow material. Since the beginning of 2005, the correspondence shows that there has been a succession of incidents, both legal and illegal, which have tended to interrupt the Contractors operations in taking fill materials from the selected borrow areas. Such incidents are recorded in the following of the Contractors letters: 7 Feb. 05 Borrow Area 3 Persons from Punjab Mines & Minerals, accompanied by persons in police uniform, came to our various sites and harassed our workers to stop working, otherwise they will be arrested Borrow Area 3 Excavation was brought to a halt on 22 November (February ?) on instruction from armed police and representatives from Mines & Minerals Department Borrow Area 6 Contractor has been stopped to collect filter material from Sukettar Nullah vide Order of Senior Civil Judge, Mirpur, dated 23 Feb. 05

25 Feb. 05

26 Feb. 05

FIRST DRAFT 12 Mar. 05 Borrow Area 2 On 11 March at about 11 am some people came to our work site at Timber Causeway and they forcefully stopped our work and blocked the road. Again on 12 March again some armed people came to our worksite at about 10.30 am and again they threatened our site personnel and stopped our work as they claimed to be leaseholders of WAPDAs land Borrow Area 2 Since 11 March, our main work of Sukian Dyke has been hindered due to illegal road block from local people which could not be resumed up to now Borrow Area 3 On March 21, at about 11.00 pm, some 30 locals, some carrying guns, (came) to our quarry at Naqi, River Jhelum and illegally stopped our work Borrow Area 3 We report further harassment of our workforce. On Monday 11 April at 11.30 am Per Waqar Shah led six men, three of whom were carrying auto/semi automatic weapons, into the riverbed borrow area AJ&K and demanded that all work should stop and that we should produce our lease to excavate. The offending group returned again at 1 pm same day and again tried to force a stoppage of works, this time police and army were called to intervene and remove the trespassers. Borrow Areas 3 & 6 We received a communication from Engineers Representative advising us to stop borrowing of materials from Jhelum River bed and Sukettar Nullah. Complying with the instructions, we have suspended borrowing of materials and the works have stopped again Borrow Area 2 Our work for exploitation of gravel material from Timber Causeway was stopped by some 30 locals on 24 April 2005 at 10.00 am. They claimed that this area belongs to them and we cannot take material from this area, although to our understanding that area belongs to WAPDA and we have been verbally instructed by the GM and Project Director during our meeting with the Employer and the Engineer on 14 April 2005 at WAPDAs Rest House to take material from WAPDAs acquired land. Borrow Area 2 Our work for exploitation of gravel material from Timber Causeway was stopped once again by some locals on 4 May 2005 at 7.00 pm. They claimed to be owners of that land whereas to our understanding that area belongs to WAPDA.

19 Mar. 05

22 Mar. 05

12 Apr. 05

20 Apr. 05

26 Apr. 05

4 May 05

The circumstances behind each of these incidents are clearly complex, and are difficult to comprehend simply from a study of the correspondence. The Contractor, in his letter of 20 April, appears to believe that there is a cartel, referred to elsewhere as the local mafia, that has acquired the mineral leases for the areas investigated for borrow materials, and which is trying to use this power to abstract exorbitant payments from him. The CM has responded to the Contractors letters in a consistent manner by referring to the provisions of Clause SP-17 under which it is the sole responsibility of the Contractor to acquire the borrow areas and to pay all royalties/malkana. Apart from responding as above to the Contractors letters, the CM became more directly involved by virtue of his letter of 16 April. With this he forwarded the letter from the Mirpur Mines & Minerals Department and advised the Contractor to stop

FIRST DRAFT unauthorised extraction of materials. The Contractor read this as being an instruction to stop work, vide his letter of 20 April, although this was denied in the CMs subsequent letter of 2 May. During the Site Progress Meeting held on 7 April, the Employer advised that the Chief Secretary of the AJK Government had proposed that he would try to agree a fixed price for the leases, and that borrow area leases would then be transferred into the name of the Employer who would give these to the Contractor. These arrangements are understood to be currently under discussion and if successfully implemented then it is expected that the ongoing problems will have been largely resolved. Relevant Records Because any claim that the Contractor may in due course submit has not yet been quantified in any form, it is not possible to identify the specific records that will be relevant. It is anticipated that the main record will be the daily progress reports that are kept by the CMs field staff. Monthly measurements will also provide a record of the quantities of fill material placed in the works, although in relating these to material abstracted from borrow pits, account will also have to be taken of the stockpiling of material and of material used for temporary works, e.g. cofferdams, access roads, etc. Contractual Position Given the circumstances of the repetitive interruption of borrow operations, the Contractor has taken a number of positions with regard to his belief that he should be supported under the terms and conditions set out in the Contract. These include: That it is the Employers responsibility to make land available as part of the Site under Clause 42.1(d), with the remedies as set out in Clause 42.2. His letters of 14 December 2004 & 18 January 2005 refer. That the forced stoppage of borrow pit operations by armed intervention is a not foreseeable physical obstruction or condition under Clause 12.2. His letters of 12 & 22 March 2005 refer. That the Engineer has a duty under Clause 40.1 to recognise such stoppages as an Engineers Suspension of the Work, and to make an Engineers determination of the cost and delay under Clause 40.2. His letter of 19 March 2005 refers. That the Employer has a legal duty to assist the Contractor under the provisions of the Law of the Islamic Republic of Pakistan, by reference to Clause 5.1, Parts II A & B, of the Conditions of Contract, as well as under Special Provisions Clause SP-17. His further letter of 19 March & letter of 20 April 2005 refer. That the stated responsibility of the Contractor to acquire the Borrow Area, as set out in Clause SP-17, can not be invoked under the Land Acquisition Act of Pakistan. The exclusions of Clause 26.1 place responsibility on the Employer for all planning, zoning or other similar permission required for the Works to proceed. His letter of 8 April 2005 refers. The Engineers position that the Contractor is wholly responsible for acquiring all borrow pits and for making all payments is based on the statements made in Clause SP-17. This Clause is titled Borrow Areas and Quarries and the relevant paragraphs of this Clause read as follows: The borrow areas and quarries whether these fall in the Employers acquired land or otherwise, the Contractor shall during the currency of the Contract be responsible to make payments or compensation, if any, to the relevant organization, agency or party for getting the materials for use in the Works. The Contractor shall make his own investigations in respect of such payments and shall include all such costs in the rates and prices in the Bill of Quantities.

FIRST DRAFT The exploitation of material from borrow areas and quarries will involve Government agencies whether the land is acquired by the Employer or it is leased by others. The Employer will however assist the Contractor in dealing with different Government departments and licensing agencies. The fact that borrow pits are not shown on the Contract Drawings, and are not mentioned in the description of the site in Clause SP-1.20, supports the position that they do not constitute part of the Site. Comment Unless a full and comprehensive agreement with the Contractor is arrived at as an outcome of the discussions referred to above, then a claim from the Contractor for the delays and costs associated with his borrowing operations can be expected. The claim is likely to be based on the duties and responsibilities of the Employer under the Contract, and he will cite the present involvement of the Employer in negotiations as evidence that the Employer has a duty to arrange for the borrow areas to be made available for unimpeded use by the Contractor. If the case were to be taken to international arbitration, then an arbitrator might well question whether the obligation on the Contractor to make his own investigations in respect of payments or compensation to other parties is fair and reasonable, given the potential numbers of the parties involved, the disparate interests of the parties and the very real time constraints of the tender process. 3. EXCEPTIONAL RAINFALL JAN/FEB 2005 Origin Contractors letter dated 23 February 2005

ResumThe Contractor claims that the construction on site was disrupted and delayed because of exceptionally heavy rainfall in the period after 20 January 2005 Relevant Correspondence 23 Feb. 05 CWEJV to CM MJV 1 Mar. 05 12 Apr. 05 21 Apr. 05 CM MJV to CWEJV CWEJV to CM MJV CM MJV to CWEJV Ref 0628 Ref 3292 Ref 0887 Ref 4415 With rainfall record, photographs and newspaper clippings

FIRST DRAFT Narrative The Contractor, in his letter, says that, according to the Meteorological Department, it was the heaviest rainfall for the last sixteen years and was also abnormal in the corresponding period of past years. This is a vague statement since the period is not precisely stated, and it is not supported by numeric data. He says that there is no progress on site due to such continuous heavy rainfall, also that our borrow area for silt in Timber Causeway was submerged by rapidly increasing water level. The issue of high reservoir levels is dealt with separately (see Claim No. 1) so this latter component of the claim is not discussed here under this heading. The CM responded by quoting the February daily maximum rainfall at Mangla (1.52 inches) and the hourly maximum inflow to the reservoir (142,386 cusecs), neither of which were abnormal. The newspaper clippings supplied by the Contractor refer to another part of the country and the photos are largely irrelevant. The Contractors letter of 12 April expands the scope of the claim by explaining (a) that the affect of the climatic conditions on the Contractors operations was regional, referring to materials and consumables coming from outside the project area, and (b) that the claim refers specifically to the affect of the rainfall on construction activities, e.g. in terms of site mobility, for which the intensity of the rainfall is not particularly relevant. He also again cites the rise in reservoir levels as preventing any work on Upstream Blanket Areas UB1 & UB2, and the release of reservoir water through the spillway as preventing exploitation of the gravel borrow area in the Jhelum river bed. The CMs reply to the above letter states that the delivery of the critical materials from outside the project area (filter material for drainage wells) was behind the Contractors agreed programme, that the rainfall both in intensity and duration was not unprecedented by reference to Year 2003, that the reservoir was held at the critical 1000 ft level in total for more than the 30 days specified in Clause SP9.40 and that the Contractor was warned of the risk of locating his processing plant in the river channel. Relevant Records A comparison between the daily rainfall records obtained for the Mangla meteorological station located at the dam and the daily records submitted with the Contractors letter, shows some differences (see below). In particular, the Mangla rain gauge records no rainfall in the period from the beginning of January up to 5 Feb. whereas the Contractor claims that there were 9 days of rainfall in this period. The differences cannot be explained by any significant difference in the geographic location of the point of measurement. January Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Mangla station Contract or

February
Mangla station Contract or

January Day 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Mangla station Contract or

February
Mangla station Contract or

0.16 0.60 0.15 0.64 0.55 0.28 0.25 1.52 -

rain rain rain rain rain rain rain rain rain rain rain

rain rain rain rain rain rain rain -

0.70 0.40 0.20 -

rain rain rain -

10

FIRST DRAFT Depth of rainfall at Mangla Gauge Station in inches Monthly total rainfalls for the 17 years 1984 2000 were provided to the Contractor at the time of tender, and these show an average for the month of February of 2.08 inches, with a maximum, in 1998, of 5.16 inches. The total for February 2005 was 5.45 inches, which is high by comparison with the 17-year record, although the rainfall in February 2003, at 6.28 inches, was even higher. Contractual Position The Contractor has stated that his Claim is based on Clause 44.1(e) of the Contract which refers to an Extension of Time in the event of other special circumstances which may occur. This may be a typographic error since Clause 44.1(c) is relevant in the case of exceptionally adverse climatic conditions. Neither of these Clauses would entitle the Contractor to any additional costs. The Contractor may argue that he considers the rainfall to have been such as could not reasonably have been foreseen by an experienced Contractor. This would be a weak argument since Clause 12.2, Not Foreseeable Physical Obstructions or Conditions, specifically excludes climatic conditions on the Site from such physical conditions. Comment An experienced Contractor is expected to be prepared for exceptional rainfall on the Site, and there is no evidence to suggest that the rainfall in February 2005 was in any way exceptional. There was exceptional rainfall in the coastal region of Baluchistan Province, as reported in the press, but the Contractor has failed to show that this rainfall in any way affected his operations at Mangla. The number of days of rainfall in February 2005 (11 in total out of 28 days, of which 8 days were consecutive, if one accepts the data from the Mangla gauge, or 14 days in total, if one accepts the Contractors record) do not appear to be in any way exceptional, particularly if one takes into account that there were no days of measurable rainfall recorded in January. 4. STOPPAGE OF WORKS BY THE ARMY Origin Contractors letter dated 18 January 2005

ResumThe Contractor claims that he was required to stop work on the Spillway and the Sukian Dyke, on the instruction of the army, over the weekend 15/16 January 2005 Relevant Correspondence 18 Jan. 05 CWEJV to CM MJV 27 Jan. 05 CM MJV to CWEJV Ref 0520 Ref 3038

Narrative The Contractors letter states that on 15 January, at 1.00 pm, some Army personnel entered the Spillway Section and ordered the Contractors site staff to stop work and vacate the area, also that they prevented senior staff from entering the Sukian Dyke area where construction activity for the upstream blanket was proceeding. The stoppage was also continued on the following day, Sunday, and work then resumed again on the Monday morning, 17 January. No reason was given by the Army personnel for this stoppage. The Contractor states that ongoing progress on the foundation works for the batching plant, repair works for stoplogs and work on the Sukian Dyke upstream blanket were all badly affected by this unscheduled stoppage. While pointing out that the stoppage should have been notified immediately, rather than waiting until 18 January, the CMs reply noted that only senior staff were prevented from entering the Sukian Dyke area, and that the work could still proceed without them.

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Relevant Records The site daily records for 15 & 16 January do not support the Contractors claim that work stopped on certain activities. Although the batching plant foundations are not mentioned specifically, the following activities are recorded as taking place on those two days: Stoplog Testing Balancing & modification work on new segments of stoplog remained in progress. 5 pieces of gate members from different location of Gate No. 9 cut out for lab testing and structural analysis have been welded with similar material to fill the gaps Area at Toe of Sukian Dyke Excavation at Blanket UB4 & 5 remained in progress. Excavation completed from Ch 328+30 to 330+17 in UB4 and from Ch 343+00 to 345+50 in UB5. Clearing & grubbing for Stockpile Area 2 & 3 continued. Contractor started grading and compaction of the Silt Type A test fill after lunch on Sunday Contractual Position Although not stated by the Contractor, it may be assumed that this Claim is submitted under Clause 12.2 of the Contract Conditions, Not Foreseeable Physical Obstructions or Conditions. To establish the validity of the Claim, the Contractor must demonstrate that the obstructions or conditions were, in his opinion, not foreseeable by an experienced contractor. Alternatively, the Contractor may simply be claiming for an Extension of Time under Clause 44.1(e). It is noted that the stoppage occurred over a Saturday afternoon and Sunday, which are locally recognised days of rest. Unless a request for weekend working has been made under Clause 45.1 of the General Conditions, and authority given by the Engineer, then the validity of the claim is in question. Issues to be Addressed 1. Whether the Army personnels instruction was a not foreseeable obstruction or condition. Further effort should be made, both by the Contractor and by the Employer, to establish the reason for the instruction to stop work, and whether the instruction had the authority of the senior officers in command of the Army personnel 2. Whether the Contractor had the Engineers approval for weekend working 3. Whether the stoppage did actually occur, in view of the site daily records for those two days 5. PROVISION OF SPECIAL SECURITY MEASURES Origin Contractors letter dated 9 November 2004

ResumThe Contractor is claiming for the cost of special security measures arising as a direct result of a perceived threat to Chinese personnel, and the resulting provision by the army and the police of security details for the Contractors camps and personnel in the field. Relevant Correspondence 9 Nov. 04 CWEJV to CM MJV 25 Nov. 04 CM MJV to CWEJV Ref 0252 Ref 2565

Narrative In his letter of 9 November, the Contractor refers to recent vicious incidents which happened on 9-15 October & on 28 October, and which were directed at Chinese personnel working in the country. Specifically,

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FIRST DRAFT On 9 October, two Chinese engineers working on another project were taken hostage; one was rescued five days later, but the other was shot dead On 28 October, there was an explosion at the hotel at which CWEs President, Vice President, Financial Controller and Project Manager were residing, although fortunately none of these persons was injured As a direct response to these incidents, immediate measures were taken, in conjunction with the police and the army, to improve security at the contractors camp, and to guard Chinese personnel while working on site. These measures are set out in the Contractors letter but include principally: Immediate evacuation of 20 plus Chinese staff from the camp to temporary accommodation at the WAPDA rest house while the camp was made secure, Construction of guard posts, floodlights and a security gate at the camp, the issue of security passes to all employees and the hire of professional security personnel, Improved telecommunications with the security services. The camp was evacuated on 18 October and was not reoccupied again until after 8 November. The Contractor claims that, in addition to the cost of the improved security measures, there have been a number of significant repercussions with respect to the progress of his work. These include constraints on the movement of personnel dictated by the security requirements, special protection equipment for staff, delay in mobilisation of staff from China, additional inducements to persuade staff to work on the project and similar inducements for subcontractors and suppliers. The Engineer has replied to the Contractors letter to the effect that AJK Government, supported by the Employer, has taken responsibility for provision of security to the Contractors personnel, and that such additional security measures are at the Contractors expense and, by implication, might reasonably have been foreseen by an experienced international contractor. Relevant Records The Contractor has not yet submitted any detailed records with respect to the measures he claims he has taken to safeguard his personnel and site activities. Therefore it is not possible at this time to determine which of the many site records might have relevance. Contractual Position Under Clause 19.1 of the Contract, the Contractor shall throughout the execution and completion of the Works . have full regard for the safety of all persons entitled to be upon the Site . and provide and maintain at his own cost all lights, guards, fencing, warning signs and watching, etc. From the Contractors submission, it is not clear whether he considers that the measures that he has put in place go in any way beyond this general obligation under the Contract. Issues to be Addressed Whether the security measures that the Contractor has put in place are more than might reasonably be expected given all the circumstances relevant to the Contract 6. REDESIGN OF THE DIVERSION ROAD FOR JARI DAM Origin Contractors letter dated 6 November 2004

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FIRST DRAFT ResumThe Contractor is claiming for the cost of delay in issue of construction drawings for the Jari Dam diversion road, and in approval by the Engineer of his revised designs for the section of road at the right abutment of the dam. Relevant Correspondence 6 Nov. 04 CWEJV to CM MJV 11 Nov. 05 CM MJV to CWEJV 26 Nov. 04 CM MJV to CWEJV 24 Dec. 04 CWEJV to CM MJV 30 Dec. 04 CWEJV to CM MJV 1 Jan. 05 CWEJV to CM MJV 13 Jan. 05 CM MJV to CWEJV 3 Feb. 05 CWEJV to CM MJV 9 Feb. 05 CM MJV to CWEJV Ref 0239 Ref 2511 Ref 2570 Ref 0437 Ref 0442 Ref XXX Ref 2942 Ref 0557 Ref 3137 Notice under Clause 6.3 Issuing Drgs 10JD601-605

Issuing revised drgs

Narrative The heightening of Jari and Kakra Dams requires that the public road that runs at present on the crest of the embankment is diverted to a new alignment running downstream of both dams. The original Construction Drawings issued by the Engineer show the route of this new road but they do not show the detail necessary to allow setting out of the horizontal and vertical alignments. Without these, the Contractor was not able to start construction of this new road. Since it was necessary to construct the road at an early stage in his programme, to allow traffic to be diverted off the dam, he issued a Notice under Clause 6.3 of the Contract. When this information was provided, and having studied the new drawings, he decided to propose some alternative alignment details of his own. The Contractor has intimated his intention to claim for a delay in receipt of the Engineers approval for one section of the revised alignment, that from Chainage 0+00 to 15+50, which is at the right abutment of the dam. However, his original letter of 6 November gives notice that he may also present a claim in respect of disruption caused by not having the alignment information when or soon after the Contract was awarded. It is accepted by the Engineer that the revised alignment proposed by the Contractor to replace that issued by the Engineer is technically an improvement on the design for reasons of topography, embankment height and slope stability. The sequence of correspondence leading up to the alleged delay is recorded as follows: 6 Nov. 2004 - Contractor issued a notice under Clause 6.3 of the Conditions of Contract requesting design information, including horizontal and vertical alignment, to allow construction of the Jari Dam diversion road. CM replied on 11 November giving reasons why the notice of delay or disruption under this Clause was not appropriate. 26 Nov. 2004 - CM responded to Clause 6.3 notice by issuing 5 drawings 10JD601 605 giving required information. Contractor replied on 24 December intimating intention to change the vertical alignment to suit existing conditions on the site. 30 Dec. 2004 Submission by Contractor of proposal for revised alignment in Section Ch 139+85 187+63, i.e. at left abutment of the dam 1 Jan. 2005 Submission by Contractor of proposal for revised alignment in Section Ch 0+00 15+50, i.e. at right abutment of the dam 5 Jan. 2005 - CM to PM in Lahore (2 letters) with Contractors two proposals, requesting review & approval in each case 11 Jan. 2005 - PM to CM issuing two revised drawings 10JD603R1 & 10JD604R1 which amended the road alignment in the Section Ch 139+85 187+63. These drawings were issued by CM to the Contractor on 13 Jan. 2005

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19 Jan.2005 - CM to PM in Lahore sending reminder for Section Ch 0+00 15+50 3 Feb. 2005 - Contractor to CM sending reminder for Section Ch 0+00 15+50 7 Feb. 2005 - PM to CM approving the Contractors proposed revised alignment in Section Ch 0+00 15+50 9 Feb. 2005 - CM to Contractor approving the revised alignment in Section Ch 0+00 15+50 Relevant Records The periods involved in issuing and agreeing the changes in the road alignment details are fully recorded in the exchange of correspondence. The Contractors requested design change for the Section Ch 0+00 15+50, submitted on 1 Jan., was approved on 9 Feb., a period of 39 days. The total period from issue of the Clause 6.3 Notice until approval of the last section of the alignment was 96 days (3 months). The Contractors original approved programme shows the filling for the diversion road embankment starting mid Dec. 2004 and finishing 1 June 2005, with construction and commissioning of the road finishing 3 weeks later. The draft of a revised programme now submitted for approval shows the same filling operation starting mid Feb. 2005 and finishing mid Oct. 2005, again with the commissioning of the road 3 weeks later. However, only the two abutment sections of the road were delayed by the time taken to approve detailed alignment drawings since, for most of its length, the road runs at a defined elevation on the downstream shoulder of the embankment dam. It would appear from the revised programme that the 5 month delay in the completion and commissioning of the road is the result of a 5+ month delay in the start and finish dates for the foundation drainage and filter layers for the embankment, which has delayed the start of construction of the downstream shoulder of the embankment, and therefore of the road. Contractual Position The Engineer has a duty under the Contract to issue construction drawings to the Contractor, and, by implication, these must be in sufficient detail to allow the Contractor to undertake the construction without hindrance or delay. This duty is expressed in Clauses 6.1 and 7.1 of the Contract, and in Special Provisions Clause SP-3.20. It is accepted that the original drawings issued for construction did not provide sufficient detail to allow the Contractor to construct the new road. Clause 6.3 of the Contract states that the Contractor shall give notice to the Engineer whenever planning or execution of the Works is likely to be delayed or disrupted unless any further drawing or instruction is issued by the Engineer within a reasonable time. With the notice, the Contractor is required to provide (a) details of the drawing or instruction required, (b) why and by when it is required and (c) details of the delay or disruption likely to be suffered if it is late. The Contractors letter of 6 November responds to (a) above, but it provides no detail against either (b) or (c). Issues to be Addressed It needs to be established whether the delay in providing the Contractor with the information that he required was reasonable within the meaning of Clause 6.3, particularly having regard to the fact that the Contractor in his notice provided no specific date by which the information was required. It must also be considered whether the apparent delay in provision of the information was fundamental to the 5 month delay in commissioning the road, as registered in the Contractors latest draft work programme, or whether such delay in the programme has other more fundamental causes. In the latter case, then was the delay in issue of drawings for the road significant in any other way in respect of the Contractors programme of work ?

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7.

DRILLING FOR ANCHOR BARS IN MAIN SPILLWAY Origin Contractors letter dated 4 April 2005

ResumThe Contractor is claiming for the delays and cost of providing steel detector equipment to locate the position of steel bars reinforcing the existing concrete structure, and which are obstructing the drilling of anchor bars for the new concrete. Relevant Correspondence 4 Apr. 05 CWEJV to CM MJV Ref 0837

Narrative The Contractors letter refers to the Site Progress Meeting held on 31 March in which the Contractor reported that drilling for anchor bars for the new invert concrete for Spillway 1 was very slow because the drill holes were encountering first stage steel reinforcing bars. At the meeting, the representative of the Employer recommended that the Contractor obtain steel detector equipment, so that the progress could be improved. The Contractors letter claims that the problem results from variations between the reinforcement drawings and the actual reinforcement layout. He reads the Employers recommendation as being an instruction and claims that the procurement of such equipment would be an addition to the scope of works set out in the Contract. It is understood that the work in Spillway 1 was in fact completed successfully without the procurement of such equipment, although a number of holes were abandoned and had to be redrilled and others intercepted and cut reinforcing bars. The requirement for anchor bars for the new invert slab in the spillways is shown on Drawing 10MS417. The anchors are to be #11 and are to be set on a 3 by 3 grid, with the holes drilled and grouted to a depth of 3. Clause 5-5.40 of the Specification defines the work to be carried out but merely states that holes are to be drilled and grouted; there is no instruction with regard to the interception of reinforcement in the existing concrete. The drawings do not show the reinforcement in the existing concrete so the Contractors contention that the reinforcement varies from the drawings is not understood. Measurement and payment for drilling and grouting in anchor bars is made on a linear basis for the actual length of each anchor. Relevant Records The Engineers site staff have only limited records of the number of holes actually drilled for Spillway 1 although probably the Contractor will have kept records. Contractual Position The Contractor claims that the recommendation of the Employer constitutes an instruction to change the character or quality or kind of any such work under Clause 51.1(c) of the Contract and has asked for payment in accordance with Clause 52 for the additional cost of obtaining steel detector equipment. This has not as yet been refuted by the Engineer. The definition of the payment item for anchors would seem to exclude any payment for the abortive holes drilled in Spillway 1, and the Contractor has not specifically asked for any additional payment for these. Issues to be Addressed It needs to be established whether the Contractor could reasonably have foreseen the need for drilling abortive holes in the concrete because of the existing reinforcement bars, or, alternatively, of obtaining steel detector equipment to avoid this problem. The Engineer should also consider whether the cutting of existing reinforcement is technically acceptable, and if not, whether the provision of steel detector equipment is in fact a technical requirement that might well have been specified in the Contract.

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8.

TRIAL TEST FREQUENCY AT SUKIAN DYKE UPSTREAM BLANKET Origin Contractors letter dated 23 December 2004

Resum The Contractor is claiming for delays in the work occurring as a direct result of what he refers to as an abnormal increase in the numbers of trial test pits and trial trenches instructed by the Engineers geologists in connection with the Upstream Blanket Areas UB4 & UB5. Relevant Correspondence 23 Dec. 04 CWEJV to CM MJV 10 Jan. 05 CM MJV to CWEJV Ref 0403 Ref 2918

Narrative Sukian Dyke is underlain by alternating clay and sandstone beds which dip generally in an easterly direction and which are highly variable, both in surface outcrop location and thickness. For the upstream blanket to be effective, a clear understanding of the micro geology underlying the surface silt deposits therefore needs to be established in order to properly control the excavation of the silt. A programme of trial excavations (pits and trenches) was instructed in Oct. Dec. 2004 by the Engineers field geologists, as the excavation work proceeded. From the results of these excavations, the extent and outer limit of each of the blanket areas were determined. The requirements for test pits and trial trenches were issued in the form of hand written field instructions signed by the Resident Engineer. In the case of Upstream Blanket Area UB4, the total number of trial pits was 11 No. and the length of trenches was 2160 ft. For UB5, the number of trial pits was 6 No. and the length of trenches was 825 ft. The method of payment for trial excavations is very relevant in connection with the Contractors claim. Under Clause 2-7.11 of the Specifications, trial excavation within the limits of other excavation is measured and paid for as part of that excavation. Only in the case of a trial excavation outside the limits of other excavation is the trial excavation paid for by daywork. Therefore, the Contractor has not received any separate payment for the trial excavations for UB4 & UB5; his costs are deemed to be included in the bulk excavation rate for the silt. Relevant Records The quantities of trial excavations instructed by the Engineers geologists are set out in the following tables: Upstream Blanket Area UB4 Trial Trenches Serial No. Designation 1 2 3 4 5 6 7 T-1 T-2 T-3 T-4 T-5 T-7 T-8 Dimensions 450 x 6.7 x 3 100 x 4 x 3 110 x 5 x 3 1000 x 5.58 x 3 500 x 6.56 x 3 Excavation Qty (cubic ft) 9045 1200 1650 17640 9840 39,375

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FIRST DRAFT Test Pits Serial No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Designation P-1 P-2 P-3 P-4 P-5 P-6 P-7 P-8 P-9 P-10 P-11 P-12 P-13 P-14 P-15

Depth (ft) 4.0 7.0 6.0 10.0 10.0 14.0 16.0 18.0 16.0 16.33 20.5

Upstream Blanket Area UB5 Trial Trenches Serial No. Designation 1 2 3 4 5 6 7 8 9 Test Pits Serial No. 1 2 3 4 5 6 7 8 T-4 T-6 T-10 T-11 T-12 T-13 T-14 T-15 T-16 Dimensions 150 x 2 x 3 160 x 5.5 x 3 130 x 5 x 3 100 x 5 x 3 150 x 14 x 3 135 x 15 x 3 Excavation Qty (cubic ft) 900 2640 1950 1500 6300 6075 19,365

Designation P-1 P-2 P-3 P-4 P-5 P-6 P-7 P-8

Depth (ft) 10.0 12.0 8.0 13.0 21.0 14.5

Daily reports are available to provide a record of the progress of the excavations, and the reasons for any delay. Contractual Position The Contractors letter states that he is keeping records of delays and disruptions to the works due to the increase in the frequency of trial tests for presentation under Clause 44 of the Contract. This Clause refers to time delays and extensions of time. What is not clear from his letter is the base level for trial tests from which he considers that there has been an increase, since no quantities for tests are given either in the Specification or in the Bill of Quantities. As pointed out in the CMs letter, Specification Clause 2-5.03.02, Exploratory Excavations, merely states that The Engineer may

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FIRST DRAFT direct that Trial Excavations . shall be excavated in advance of other excavation to such dimensions and depths as the Engineer shall order Issues to be Addressed It needs to be considered whether the number and extent of the trial excavations that the Engineer instructed was more than might reasonably have been foreseen, particularly considering that the Contractor received no separate payment for this work. 9. SURVEY OF TIMBER CAUSEWAY BORROW AREA Origin Contractors letter dated 9 March 2005

ResumThe Contractor claims that a joint survey of the Timber Causeway borrow area after excavation should be paid for under dayworks. Relevant Correspondence 9 Mar. 05 CWEJV to CM MJV 18 Mar. 05 CM MJV to CWEJV Ref 0702 Ref 4091

Narrative It is understood that the Engineers request for a joint survey of the Timber Causeway borrow area was made in response to a request from the Employer for a survey before and after excavation to establish the quantity of material taken out. It is not clear why the request was made specifically for this borrow area, or whether similar surveys for the other borrow areas were carried out without incident. The survey was apparently done on 7 March, involving both the Contractors and the Engineers field survey teams. In submitting the results of the survey with his letter of 9 March, the Contractor also submitted a contoured map of the borrow area made before the abstraction of any material. The Contractor apparently considers that the cost of the survey work, including possibly the original survey made for his own purposes, should be paid for under a daywork instruction. The CM responded that all survey work for the borrow areas was the responsibility of the Contractor under Special Provisions Clause SP-17 Relevant Records Records are available for the joint survey made on 7 March and amount to no more than half a day by the two survey teams. Comment The reason for refusing the daywork request from the Contractor may not be fully understood, but if the survey was a specific extra to the Contract, requested by the Employer, then it would seem that the Contractor is entitled to some payment for the work. 10. WAPDA CLAIM FOR TIMBER BURNT BY THE CONTRACTORS LABOUR Origin WAPDA Resident Engineer (Civil) letter of 1 January 2005

ResumThe Resident Engineer (Civil) for Mangle Dam claims that the Contractors labour has been using for cooking purposes the timber adjacent to the labour camps that is properly the property of WAPDA Relevant Correspondence 1 Jan. 05 RE (Civil) to CE/PD 12 Jan. 05 CM MJV to CWEJV A19/II/1-2 Ref 2933

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Comment The CM has intervened in this issue only to the extent of forwarding the RE(Civil)s letter to the Contractor. This does not constitute a claim as such, and is best dealt with directly between the Contractor and the RE(Civil). 11. NATIONAL TRANSPORT STRIKE Origin Contractors letter dated 25 March 2005

ResumThe Contractor claims that the National Transport Strike which started on 24 March 2005 has resulted in a delay in the mobilisation of critical plant and equipment for the project Relevant Correspondence 25 Mar. 05 CWEJV to CM MJV 4 Apr. 05 CM MJV to CWEJV Ref 0804 Ref 4739

Narrative According to the Contractors letter, the strike by transporters that started on 24 March was called because of an increase in diesel prices. It is not clear how long the strike lasted as it appears to have had little long-term coverage in the national press. Given that nearly all transport drivers are self-employed, it seems probable that the strike will have survived for no more than a day or two at the most. The Contractor, in his letter, claims that transport of refrigeration plant, equipment, slag, cement, steel, ice, fuel and other supplies of daily usage have all been delayed. He states that he is keeping records and these will be presented to the Engineer to substantiate the claim. The CM responded to the Contractors claim by pointing out that the specific items that the Contractor claims have been delayed were all programmed to have been on site and commissioned at the time of the alleged delay. Relevant Records No details are presently available of the extent and duration of the transport strike and some research should be carried out to establish the facts. The Contractors records of his delays, when they are received, will need to be checked against site records for this period. Contractual Position The claim is submitted by the Contractor for an extension of time under Clause 44.1(e), other special circumstances which may occur, other than through a default of or breach of contract by the Contractor or for which he is responsible. A national transport strike might well qualify for an extension of time under this Clause, provided the circumstances were such as to significantly delay the Contractors work. Issues to be Addressed It needs to be established whether the transport strike was a significant event, and if so whether it had a significant impact on the Contractors programme of works. The fact that the Contractor was already late with respect to his approved programme would not invalidate his claim for a delay, if such occurred and if the event causing the delay qualified under Clause 44.1(e). 12. REMOVAL OF CLIENTS TELEMETRY EQUIPMENT LOCATED ON THE SPILLWAY Origin Contractors letter dated 21 February 2005

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FIRST DRAFT ResumThe Contractor claims that delays in the removal of telemetry equipment from the spillway area delayed his work on stoplog testing and closing of Bays Nos 3 & 7, and on civil works for Main Spillway Gates Nos 1, 3 & 7 Relevant Correspondence 11 Jan. 05 CWEJV to CM MJV 21 Feb. 05 CWEJV to CM MJV 24 Feb. 05 CM MJV to CWEJV Ref 0497 Ref 0620 Ref 3264

Narrative The telemetry equipment referred to is mounted on the head of Spillway Piers Nos. 4 and 8 and measures the reservoir water level just upstream of each of the two piers. The equipment projects forward of the pier head so that in its normal position the level measuring device would obstruct the placing of the stopbeams respectively in Spillway Openings Nos. 3 and 6. The Contractor would appear to believe that the device would also obstruct the placing of stopbeams in Openings Nos. 4 and 7, although from an examination of the relevant mechanical drawings, this would not seem to be the case. The unit is supported on a hinged bracket so that, for maintenance purposes, it can be lifted and folded back to give access to the measuring head itself. For operational reasons, it is important for the equipment to be functional at all times, although clearly, for the work on the spillways, it is necessary for one of the two units to be out of commission for the period that the adjacent spillway is closed off. In his letter of 21 February, the Contractor refers to his earlier letter of 11 January in which he asked for the telemetry equipment to be moved, and he says that stoplog testing and closing were held up for this reason. He says that he has been continuously following up with the Engineer and the Employer for early action and that his crane/trailer and labour force are sitting idle. Furthermore, he says that scheduled activities to start civil works on Main Spillway Gates 1, 3 & 5 are also being badly affected, although he gives no explanation for this statement. The telemetry equipment is owned and operated by IRSA (Indus River System Authority), a branch of WAPDA, which is responsible for reservoir operation and monitoring. Following the Contractors original letter, there was an exchange of correspondence between the CM, WAPDA, IRSA and Seimens, the manufacturer of the equipment, the outcome of which was that Seimens offered a price for one of their operatives to attend on site. In the event, this was found to be unnecessary since the stopbeams for No. 3 spillway opening were placed simply by lifting and folding back the equipment into the maintenance position. From the site records it is not clear who did this, or on whose authority it was done. According to the Contractors approved programme, placing of stopbeams for the first three spillway openings, Nos 1, 3 & 7, was scheduled to begin on 21 January 2005. In fact, six of the ten original stopbeams for No. 1 opening were placed on 29 Jan. with the remaining four on 10 Feb. The ten newly manufactured stopbeams were placed for No.3 opening on 4 & 5 March. Due to a design fault (which is not relevant to this Claim) these stopbeams collapsed when first put under load on 6 March so that no further work was done on Spillway Bay 3. In responding to the Contractors letter of 21 February, the CM appears to accept that four spillway openings could not be started because of the telemetry equipment but pointed out that the five other openings, including No. 1, were not delayed. He also states that remaining segment stoplogs have yet not been delivered at site and hence question of working on other bays (than No. 1) due to obstruction of telemetry system does not arise. He also questions whether the trailer, crane & labour are in fact idle, as the Contractor claims.

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Relevant Records The Contractor will no doubt have kept records of plant, equipment and labour kept idle because of the alleged non-availability of Spillway Openings Nos. 3 & 7, and these will need to be checked against available daily site records. Contractual Position The Contractor is entitled to an extension of time under Clause 44.1 of the Contract in the event of any delay, impediment or prevention by the Employer, or any other special circumstances which may occur If it was indeed the case that starting work on Spillways Nos. 3 & 7 was delayed because of the non-removal of the telemetry equipment (which the Contractor had no authority to remove himself), then a claim under Clause 44.1(d) or (e) might be justified. However, the Contractor will need to demonstrate (a) that he was in a position to proceed/continue with placing stopbeams for Openings 3 & 7 after those for No. 1 had been placed, and (b) that no authority had been given for him to remove the telemetry equipment himself. Issues to be Addressed 1. Whether the Contractor was physically in a position to place stopbeams for Spillway Opening No. 3 on or soon after 11 Feb. when similar work at Spillway No. 1 had been completed. 2. If so, whether there was any technical reason for not placing the stopbeams for Spillway Opening No. 7 instead. 3. On whose authority the telemetry equipment was removed on 4 March to allow placing of stopbeams for Spillway No. 3, and any reasons why this authority could not have been given earlier.

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