Pakistani pavilion in Shanghai Exposition: Commerce may not sanction $2.2 million additional amount

Commerce Ministry is unlikely to allocate additional $2.2 million to a Karachi-based firm, Far East Trading Company Limited (FEOTC), for establishing Pakistan Pavilion in Expo 2010 Shangai (China). This thorny issue, which involves foreign exchange, was discussed thoroughly at a meeting a couple of days ago. The meeting was presided over by outgoing Commerce Secretary Suleman Ghani.
"I have constituted a subcommittee to examine the terms of reference (TOR) for final decision in this regard," Suleman said while talking to Business Recorder. According to him, the meeting had agreed to some of the demands of the contracting firm, including hiring of Chinese company, procurement of Chinese material instead of Pakistani. However, the plea of an increase in the cost was turned down.
"We are not responsible for cost escalation. However, the subcommittee will decide if any additional payment is to be made," he added. Official documents show that the original cost of the deal was 2.8 million dollars, which was later increased to five million dollars.
Sources said that the Chief Executive Officer (CEO) of FEOTC/designated Deputy Commissioner-General of the pavilion, Abdul Wahid, wrote a letter in April to Pakistan Ambassador Masood Khan, who is also Commissioner-General of the World Expo, stating that FEOTC 's initial proposal for the construction of Pakistan pavilion constituted aspects of designing, architectural drawings, structural engineering calculations, interior exhibition design, interior decoration, construction and other aspects of construction in Pakistan.
Masood approached the government of Pakistan for enhancement of the amount to be paid to the contracted firm, without investigating the claims made by the firm. Earlier, the TDAP had pointed out that the government/procuring agency would contribute 2.83 million dollars for the Expo 2010, whereas the event manager, Far East Oriental Trading Company Limited, would invest at least 2.09 million dollars from its own resources.
The letter stated that the construction of the building was to be done on pre-fabricated basis in Pakistan, which would then be transported and assembled on Expo 2010 site located in Shanghai. According to documents, the firm had communicated that total covered area approved originally was 2300 square metres, whereas the same has now been increased to 2417 square metres as per the requirements of the Expo authorities.
This implies that the contract was awarded to the firm without finalisation of the pavilion space. It is to be noted that the initial construction proposal was 2,834,500 dollars. According to Pakistan Embassy in China, Shanghai Expo authorities have not allowed transportation and assembly of pre-fabricated material from Pakistan.
All material has to be acquired and developed locally. Only Shanghai-based A-rated companies, approved by the Expo authorities are authorised to help construct the pavilion. Sources said the event manager is endeavouring to get the additional $2.2 million for the Pavilion, but it appears difficult for the Commerce Ministry to sanction the entire extra cost.