Two construction contracts will soon be awarded for the $2,200 million Ghazi Barotha hydroelectric power project, industry sources say (MEED 26:5:95; 2:9:94). They say separate memoranda of understanding for each contract have been exchanged between the client, the Water & Power Development Authority, and Italy's Impregilo, and its partners France's Campenon Bernard, Ed Zueblin of Germany, and Saadullah Khan & Brothers and Nazir & Company, both local. Letters of intent have been drafted and it is hoped that work will start within two months.

The first, contract C1, is for construction of a barrage 7 kilometres downstream of the Tarbela dam. Contract C2 is to divert water at Ghazi to a 52-kilometre power channel.

A third contract, (C3), for the power complex civil works, will involve building a 1,450-MW power house with five units and associated infrastructure facilities. The date for the opening bids for C3 has not yet been set, but it is hoped that evaluation will be undertaken in December or January. There are 11 prequalifying companies - one from each of Brazil, China, Germany, Italy and Sweden, two from France and four from South Korea.

The government has completed negotiations with the World Bank concerning a $300 million loan for the project. The terms of a loan have been negotiated and will be presented to the board of the bank in the near future. A World Bank spokesperson said that the loan is subject to a number of conditions.

Discussions with other co-funders have also had positive outcomes, project sources say. Subject to board approval the following amounts have been negotiated:

Asian Development Bank - $300 million

Japan's Overseas Economic Co-operation Fund - $350 million

European Investment Bank -$50 million-60 million

Islamic Development Bank - $40 million

Kreditanstalt fuer Wiederaufbau - $150 million.

The securing of funds for the project has taken longer than expected and the start of construction has been delayed.