The termination of the contract for Lot-2 of Karachi’s BRT Red Line project has been declared illegal by the project’s dispute board, which ruled in favour of the contractor.
The three-member dispute board, in a majority 2-1 decision, determined that the Sindh government terminated the contract in violation of its terms and without sufficient legal grounds.
The board said delays in the project were largely caused by repeated design changes and administrative shortcomings rather than the contractor’s failure to complete the work.
The Sindh government had terminated the Lot-2 contract on April 21, sealed the contractor’s office and halted work on the project. The dispute was later taken to the Sindh High Court, which directed the parties to approach the dispute board established under the contract.
According to the board’s decision, designs for the project’s 16 stations were repeatedly revised. A revised design for only one station was provided in November 2025, while designs for the remaining 15 stations had not been delivered to the contractor when the contract was terminated.
The board concluded that the delayed provision of designs significantly contributed to the project’s setbacks. It also held the project management team and consultants responsible for the delays and raised concerns about the experience and capacity of TransKarachi’s project management team to manage a project of this scale.
The board further stated that the contract could not be terminated solely because the project was not completed within the stipulated timeframe, particularly when delays were linked to factors beyond the contractor’s control.
The parties have 28 days to file objections against the decision. If the dispute is not resolved through mutual agreement within the following 56 days, the matter may proceed to arbitration under the applicable international rules.
