Pakistan secures over $27 million savings in CASA-1000 after contractor claim reduced

ISLAMABAD: Pakistan has secured savings of over $27 million in the CASA-1000 project after negotiating down a major contractor claim, reducing financial exposure while ensuring continued protection and operational readiness of transmission infrastructure.

According to details, the Engineering, Procurement and Construction (EPC) contractor, M/s Hitachi–Cobra JV, had raised its Care & Custody claim to approximately $32.9 million for Pakistan and $28.5 million for Tajikistan, citing delays in project timelines.

Following negotiations held on March 9–10, 2026, in Ludvika, Sweden, Pakistani officials reached an agreement to significantly reduce the claim. The talks were led by Additional Secretary Power Division Syed Imtiaz Hussain Shah and Managing Director National Grid Company (NGC) Altaf Hussain.

Under the agreement, both sides decided to cap the total Care & Custody cost at $9 million, to be shared between Pakistan and Tajikistan, covering the period up to February 2028. This results in savings exceeding $27 million for Pakistan.

The agreement ensures that the High Voltage Direct Current (HVDC) infrastructure remains protected, maintained and operationally ready during the interim period despite project delays.

Both parties also agreed to a limited extension of up to three months beyond February 2028, if required, with a 5% monthly escalation clause.

The CASA-1000 project, which aims to transmit surplus hydropower from Central Asia to South Asia, has faced delays due to the situation in Afghanistan.

Under revised timelines, commissioning of the HVDC system is expected by September 2027, requiring interim Care & Custody arrangements to safeguard installed assets until completion.

Officials said the agreement provides financial relief while allowing the project to continue under the revised schedule.