LAHORE - The government is yet to come out of the shock caused by the refusal of a US company to carry out the documentation process right in the middle of $ 1.2 billion Munda Dam project, sources told The Nation here Sunday. The government received a serious blow four months earlier when it sought to speed up the documentation process of 740 MW Munda Dam. However, the US company's refusal to respond to any offers made by Pakistan to speed up the process till January this year, had landed the authorities in an odd situation. Sources said that the Private Power and Infrastructure Board (PPIB) had issued the LoI to a newly formed unlisted American company reportedly on the instructions of President Pervez Musharraf to upgrade the feasibility study for constructing the Munda Dam. The government should not have issued the LoI to a firm, which lacked the expertise in planning the water and energy projects. There were a lot of other experienced firms, which could have been involved in the construction of the dam. Japanese consultants, who worked on the project, had suggested about 10 cents per unit electricity generation cost, who had originally conducted the feasibility study, the sources added. Sources said that the American firm's refusal had forced the government to carry out the project through local funding as there was no other option left to involve the local banks for project financing. The Water and Power Development Authority (Wapda) has recently taken up with other stakeholders the issue of prolonged delay in finalising the Munda dam action plan. The government had granted six months additional time to AMZO Corporation LLC (USA) for completing feasibility study earlier in 2006 without penalising the firm as per the agreement. The firm, pleading its case, said that the October 8, earthquake had badly shaken the earth mantle, and since the project happened to be very near to a seismic fault, immediate need arose to apply greater sophistication to identify and locate the tectonic ruptures (faults) that might have developed in the vicinity of project area, source said. "The new demands made by the PoE were not part of the LoI, as our understanding was to develop the project as an optimised hydropower scheme," a letter from AMZO said which provided the base for allowing extension in submission of feasibility study, sources added. The firm said that non-co-operation of local tribes had been one of the major hurdles, most of the time, while carrying out geo-technical investigations. The tribes often insisted on certain jobs but did not perform their duties as per the agreement with the sub-contractor, sources said. Munda dam is one of the important project to be built on the Swat River in NWFP at a cost of over Rs 71 billion, which had to be completed by 2016 along with other four major dams. Federal Secretary for Ministry of Water and Power Ismail Qureshi, however, was hopeful that the project would be completed in time. Talking to The Nation, he said that the dispute on the Munda Dam project would be resolved shortly as the project would have to be completed by 2016.