Punjab govt to pay Rs51m per day to China if OLMT is delayed


The Punjab government will have to pay Rs 51 million per day in damages to the Chinese government if the Lahore Orange Line Metro Train (OLMT) project is not completed within the stipulated time. The project which is Pakistan’s first mega mass transit project has been funded by China.

There is a certain ambiguity about the actual deadline after which the Punjab government will have to start paying the amount in damages.

Talking to a private media outlet, an official said, “no one knows about the project completion or its actual CoD. But if we consider October 2015, the month in which the work on the project started, the deadline will be January 2018 as per the 27-month completion time. If we take December 2015, the month in which Pakistan and China signed Rs162 billion loan agreement, the deadline appears to be March 2018. And if we assume May 2016, the month during which China released the first tranche of Rs33 billion of the total loan value, the deadline is August 2018. All of these deadlines have already passed and the project still needs six to seven months more to complete.”

A document uploaded on the official website of the Punjab government states, “the damages arising out of delay in the project include rate of liquidated damages at the rate of 0.2 per cent (minimum) to 10 per cent (maximum) of the total contract price of the project’s civil work, local contractors’ idling charges etc. Thus, the accumulative damages will be Rs51 million (per day) in case of delay.”