Managing sensitive contractual disputes in construction: the Orange Line Metro Train Lahore project

What is it about?

Plain Language Summary The complexity within construction contracts lies at the heart of not merely the legal aspects of contracts but also clarity of deliverables, scope change management processes and management of vendor relationships during the life of the contract itself. Infrastructure projects rely heavily on contractors and sub-contractors on their output. Despite this (more often than not) contractual relationships tend to go sour or are shaped along adversarial lines in emerging countries, where the vendor is seen as an adversary, rather than a peer and partner. This case covers the Orange Line Metro megaproject in Lahore where a serious contractual dispute arose at a critical, time-sensitive moment between one of the project’s primary civil contractors and the project's lead department – the Lahore Development Authority. Key questions that arise for the management include: • Whether the management should terminate the contract and bring in another civil contractor? • How can they negotiate a winning situation with the vendor? But also, most importantly, • How could they have managed this differently? The case has been used to teach project procurement (and the significance of various methods of procurement), different types of contracts, and contract dispute/ conflict resolution frameworks useful in situations such as the one depicted in the case.

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