CASA-1000 project: PD to seek legal opinion on notice issued by Afghan contractor

Power Division is to seek legal opinion from Law Ministry on Force Majeure notice issued by Afghan contractor working on CASA-1000 project since Taliban took over control of the country as World Bank is reluctant to take any position on this issue, well informed sources in Economic Affairs Division (EAD) told Business Recorder.

The Central Asia-South Asia (CASA-1000) $1.2 billion project which will bring 1300 megawatts (MW) of seasonal power from Tajikistan and the Kyrgyz Republic to Afghanistan and Pakistan has been put on ice after Taliban took over.

At a recent meeting held under the chairmanship of Secretary EAD, pros and cons of the project and way out was discussed by the stakeholders.

The sources said, participants were informed that the purpose of the meeting was a letter received by EAD from the Ministry of Energy (Power Division), whereby the former was requested to seek clarity from the World Bank (WB) on the future of CASA-1000 project, in light of a Force Majeure notice issued on August 24, 2021 by the contractor in Afghanistan namely DABS (an Autonomous Company with all its equity shares owned by the Government of Afghanistan).

World Bank was represented by Teuta Kacaniku, Program Leader, Infrastructure and Anjum Ahmad, Senior Energy Specialist.

WB, while appreciating Pakistan’s role in the timely implementation of the project clarified that the project is currently suspended, not cancelled.

WB further pointed out that almost 60 percent of the construction work has already been carried out by DABS in Afghanistan and that a further amount (in the form of a grant) to the tune of $25-30 million is required to be paid to the contractor.

Additional Secretary-II (EAD) Zuliqar Haider Khan put forth the following questions before the World Bank management, in order to seek clarity vis-a-vis the future of CASA-1000 project: (i) are the penal clauses of the agreement suspended under the Force Majeure notice? and (ii) whether the construction work, in countries other than Afghanistan, should go on, despite the situation that has emerged in the country after August 15, 2021?

WB clarified that since CASA-1000 agreement has been signed between four countries and negotiated by their own legal teams, to which the Bank was not a party, any interpretation on the agreement will have to be jointly taken by the four countries, through mutual consensus.

WB further pointed out that a Joint Working Group (JWG), consisting of a high-level government representative from each of the four countries has been constituted to discuss the project constraints and suggested that a meeting of JWG should be convened to seek clarity on the project’s future.

Secretary, EAD Mian Asad Hayaud Din, assured the participants that EAD will discuss the issue in the upcoming meeting of the Joint Economic Commission (JEC).

In this regard, he requested Power Division to share the Force Majeure notice, the international agreement, and other relevant documents in the matter, enabling EAD to make a case before JEC.

EAD requested Power Division to refer the matter to the Law and Justice Division to get a detailed legal opinion on the issue.

The meeting was also attended by Dmtro Glaskov, Co-task team leader from Central Asian Countries, Authony Granvile, Co-Task team leader for Pakistan and Afghanistan, Sunil Kumar Khosla, Task Team leader for the CASA project and Sohail Bajwa, Manajar NTDC etc.

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