Favouritism in award of some contracts: Senate body recommends probe against NHA

ISLAMABAD: The Senate Standing Committee on Communications, while observing favouritism in awarding some contracts by the National Highways Authority (NHA), recommended initiating an inquiry against the department which extended undue favour in issuing the tender process.

The committee met on Wednesday under the Chairmanship of Senator Prince Ahmed Umer Ahmedzai here on Wednesday, which emphasised the impact of rates and substantial increase in dollar rate as a result of the process of re-tendering.

The committee was briefed on the Sailkot–Khariyan Motorway (SKM) project.

The member Public Private Partnership (PPP) NHA briefed the committee that the ECNEC approved PC-I of Rs43.382 billion.

Zahir Khan 7 Brothers (ZKB) EGC, Techno+Matracon Consortium ACC and FWO+SMC JV ZEERUK participated in bidding for SKM.

FWO-SMC JV generated a total NHA revenue share as Rs8.504 billion while Techno-Matracon revenue share was Rs7.360 billion.

M/s Techno-Matracon’s bid was declared non-conforming bid due to unequal annual instalment quoted in the bid for operational viability gap fund (VGF) against RFP requirement of equal annual installments.

The committee raised concerns about disqualifying Techno-Matracon only on the pretext of unequal instalments. On the disqualification of Techno-Matracon as a potential bidder the matter was taken up by the grievance committee. The grievance committee did not give a decision in favour of the Tecno-Matracon.

The NHA authority briefed the committee that the contract took place as per the condition of the concession agreement. The committee being dissatisfied with the answer of the NHA commented that NHA is found biased in favour of FWO-SMC JV.

The committee recommended initiating an inquiry against the department which extended undue favour in issuing the tender process. It was also emphasised that while issuing tenders emphasis should be given to the benefit of the investor rather than the contractor. The committee chair stressed that the committee solely work for the larger interest of the country, and therefore fair and just decisions should be implemented.

The committee while receiving a briefing on the Pindi-Khariyan Motorway Project was briefed in detail on the observations of revocable Letter of Intent. It was argued that Techno-Matracon JC and PowerChina Chengdu Engineering Corporation Limited were required to obtain confirmation from PowerChina Chengdu about its lead role and percentage share to substantiate the submission of the bidder.

The bidder failed to address the key observations of the revocable LOI and therefore, the NHA executive board withdrew the LOI and annulment of the procurement process.

The committee chair emphasized the impact of rates and substantial increase in dollar rate as a result of the process of retendering. He stressed that clarity should be observed while taking decisions on projects costing billions of rupees and the country should not suffer monetary loss in this dire economic crisis. It was further recommended that the project may be referred to NAB and FIA authorities if the estimated project cost in any case exceeds the re-tendering process.

The committee took up the matter regarding sub-standard material used in the construction of Kech-Harnai Road (10.7 km) and Harnai-Sanjavi Road (55.1 km) raised by Senator Muhammad Abida Azeem in the Senate Sitting.

The NHA authorities briefed the committee that more than 1,600 field density tests have been performed at the project site up to date. About 1,425 tests were declared passed, while 209 did not qualify for the required density for which the contractor was instructed to redo the work. The quality tests for aggregates, cements, steel and water are also performed in commercial laboratory to check the quality of materials.

The chairman committee inquired on the details of companies authorized for the approval of test and sought list of all the testing companies and the basis on which they were qualified for approving field density tests in order to ascertain their authenticity.

The chairman committee also inquired on the procedure of the test to which it was explained that one-by-one layering is done on earthwork, which is maximum eight inches, and each layer after approval is completed for the next layer.

The chairman committee inquired on the details of the engineer. It was briefed that as per FIDIC condition of contract Clause 2.1 NHA has appointed Brig Tarique Mahmood (retired) as the engineer.

The committee chair inquired about the selection criteria for the engineer, salary, perks and privileges extended to them. The NHA informed that the engineers are selected from the panel of NHA private engineers, further, the short-listed candidates are being qualified through a special committee constituted for the same. It was apprised that no extra perks and privileges are given to the engineer and are salary-based. It was further apprised that the engineer works as a mediator for overall supervision of the contract or to settle any dispute if occurs. The committee sought the list of all the engineers appointed on all the projects and details of their qualifications.

The committee was further briefed on the issues of the deficiency of earthwork quantities in contract BOQ. It was briefed that an increase in PC-1 cost occurred due to additional Earthwork Quantities by Rs3.882 billion to which the NHEB established a fact-finding inquiry committee under the convenor-ship of Chief NTRC with VP-NESPAK and Member (EnggCoord) NHA as member and member (West–Zone) NHA as secretary.

The committee observed that the report of the findings of the inquiry committee is yet to be submitted and lamented the delay of work by nine months. The chairman committee deferred the matter for further report and inquiry with the directions to hire a private consultant and re-evaluate the price of the project. It was also directed to prepare a comparison report between the present rates and the rates at the time the tender was advertised.

Copyright Business Recorder, 2023