The Sindh government’s decision to terminate the construction contract for the Karachi BRT Red Line project’s Lot 2 has been declared “unlawful, invalid, null and void” by the Dispute Resolution Board.
The board issued the decision after the Sindh High Court directed the Sindh government and contractor AM Associate to resolve their dispute through the forum as required under their contract.
The Sindh government had terminated the Lot 2 contract, which covers the section from Mosamiyat to Numaish, citing a lack of progress. AM Associate challenged the termination in the Sindh High Court and accused the provincial government of delaying the project.
After more than two months of hearings, the Dispute Resolution Board ruled that the government had terminated the contract prematurely and had not properly considered alternative measures before ending the agreement.
The board also raised serious concerns about TransKarachi’s capacity to manage the project, saying the government owned implementing agency lacked the institutional capacity and experienced project management required for a project of this scale and complexity.
It found that TransKarachi had failed to meet several key contractual obligations when construction began. These included failing to finalize the design, provide the contractor with the full project site free of obstacles and make substantial outstanding payments.
The board said these issues significantly affected the contractor’s ability to carry out the work and contributed to project delays.
It also criticized repeated design changes, weak coordination, delayed decisions and ineffective contract administration. The board said the evidence did not show that authorities had seriously considered less drastic alternatives before terminating the contract.
The board concluded that the termination “was premature and was not a measure of last resort.”
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