Taking a serious notice of past practice of Ministry of Communication for making payments over and above the cost approved in PC-Is of certain projects without the prior approval of competent authorities, Public Accounts Committee (PAC) on Tuesday directed Secretary Finance, Secretary Planning and former Secretary Ministry of Communication to appear in the next meeting. The PAC examined the audit accounts of Ministry of Communication for financial year 2010-11 and made a number of reservations over the violation of rules while awarding tenders.
Auditor General of Pakistan, Rana Asad Amin, expressing his concerns said that Ministry of communication violated the sanctity of august forums like Central Development Working Party (CDWP) and Executive Committee of National Economic Council (ECNEC) in obliging the contractors by making variations in actual scope of work and cost prescribed in PC-Is of certain projects.
On September 9, 2008, National Highway Authority (NHA) invited bids for construction of Qila Saifullah-Zhob N-50 (150 KM). Ten firms submitted their documents for pre-qualifications; five firms were pre-qualified while three participated in the bidding wherein M/s Husnain Cotex Ltd with its bid cost of Rs 7 billion stood the first lowest. Under the rules, the work was required to be awarded to the lowest bidder but the tenders' acceptance committee disqualified the lowest bidder and awarded the work to M/s LIMAK ZKB JV at a cost of Rs 7.9 billion which was 49.75 percent above the engineer estimate and Rs 926 million than the lowest bidder.
Secretary Ministry of Communication, Shahid Ashraf Tarar, informed the committee that awarding contract to second lowest bidder is the decision of Chief Minister of the Province and eight senators also supported this. He admitted that it was an extraordinary and exceptional situation.
National Highway Authority (NHA) got approved PC-I of the project "Construction of 4 lane underpass at Wah Gate No.1 Taxila-Hasanabdal Section" from CDWP in November 2007 for a total cost of Rs 491 million, including a construction cost of Rs 416 million. Four bidders submitted their bids and the bid cost of Rs 758 million was found to be the lowest, which was 82.18 percent above the PC-I cost. A revised administrative approval from the CDWP was required but the same was not obtained and work was awarded at a bid of Rs 758 million. Non-adherence to the instructions of the Planning Division resulted in an irregular and unauthorised acceptance of bids at higher rates of Rs 758 million.
NHA awarded ten contracts in 2008 under Rawalpindi Urban Area Development Project (RUADP) valuing Rs 493 million to M/s NLC without calling tenders in piecemeal. This resulted in an irregular award of works. The administration replied that the area was adjacent to the GHQ and very sensitive, therefore, it was impossible for private contractors to do the job.
The committee also directed to hold an investigation into award of an additional work of NHA Complex Building, Toll Plazas, Interchange worth Rs 618 million to a contractor without calling tenders and without achieving economical and competitive rates. This resulted in an irregular award of works for Rs 618 million. At one point, Chairman PAC, Syed Khurshid Ahmed Shah said that it seemed that Planning Division was not efficient to calculate estimated cost of the development projects or they planned the project sitting in the office.
Auditor General of Pakistan said that the audit paras under discussions were tip of the iceberg. He maintained that poor execution, spending over and above the estimated cost and divergence of funds were common and reflect a certain mindset. The audit report also observed that employees of the National Highways and Motorways Police (NH & MP) N-5 (North), Office of Deputy Inspector General (DIG), Quetta and Karachi, who were not residing at prescribed stations, drew house rent ceiling instead of house rent allowance during the financial years 2008-09 and 2009-10. The total payment on this count comes to Rs 55 million. Audit considered this payment as inadmissible under the rules. The committee directed to stop the practice of drawing rent ceiling and directed the former secretary Ministry of Communication to come along with Secretary Finance to the next meeting.
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