ISLAMABAD: The Auditor General of Pakistan (AGP) has found irregularities worth around Rs60 billion in the various road projects of the National Highways Authority (NHA), including some projects initiated under the China-Pakistan Economic Corridor (CPEC).

The report on the NHA's accounts for the audit year 2020-2021 found 68 cases, involving an amount of around Rs60 billion, where irregularities, payment of foreign currency without required proof, irregular award of contracts, violations of the Public Procurement Regulatory Authority (PPRA) rules, and unauthorised expenditures were observed.

The report pointed out non-realisation of revenue from contractors -Rs14.12 billion.

It stated that available latest audited financial statements for the year 2018-19 indicated that receivable from M/s FWO have increased from Rs5.179 billion to Rs7.43 billion.

A similar situation was in case of M/s National Logistic Cell (NLC) whose dues increased from Rs418 million to Rs1.637 billion up to June 2019, which reflects weak enforcement of internal controls. Further, non-execution of the project as per provisions of contract agreement caused Rs10.334 billion.

Non-imposition of liquidated damages for delay in completion of works resulted in to irregularities of Rs9.039 billion.

Unauthorised payment for the foreign currency component caused Rs3.036 billion.

Package IIB (Jamani-Shorkot 31 km) and package III-A (Sahorot-Dinpur 31 km) of the project "construction of motorway M-4 were awarded to M/s China Railway First Group Company Limited at a cost of Rs8.828 billion and M/s China Gezhouba Group CoLtd and M/s Ghulam Rasool and Co(Pvt) Ltd Joint Venture at a cost of Rs11.22 billion on November 16, 2016 and August 5, 2016 respectively. Package III-B (Dinpur-Shamkot 34km) was awarded to M/s XingjiangBiexin Road and Bridge Group CoLtd at a cost of Rs10.82 billion on August 5, 2016. Audit observed that contractors were paid IPCs withthe agreed percentage of FC component but proof for expenditure incurred in US dollars was not obtained from the contractors. Payment without proof was made due to non-observance of contract provision and weak financial controls. It observed that the NHA irregularly awarded additional work without feasibility study approval and tender of worth Rs2.58 billion.

The report observed decreasing trend in revenue realisation to the tune of Rs2.089 billion.

The NHA revenue increased by 18.89 percent in 2015-16, 3.71 percent in 2016-17, 20.12 percent in 2017-18, and 10.94 percent in 2019-20.

Toll collection amounting to the tune of Rs25.573 billion in 2019-20 include revenue of Rs2.965 billion for the added network of M3, M4 and M5, leaving actual collection amounting to Rs22.608 billion.

Thus, the authority in fact was confronting a potential decline in the revenue.

The report observed loss due to delay in completion of project to the tune of Rs1.938 billion.

Further unjustified delay caused overrun Rs1.206 billion.

Award of works to ineligible contractors caused Rs1.02 billion.

The report unearthed that the NHA awarded a contract for "construction of Peshawar-Karachi Motorway section-II Multan-Sukkur section (392 km) CPEC", to M/s China State Construction Engineering Corporation Limited on Engineering Procurement Construction (EPC)/Turnkey basis for an agreement cost of Rs294.35 billion.

Audit observed that 51 c.m aggregate based course was laid over the shoulder of both sides instead of 56 c.m provided in the preliminary design and schedule of prices, in view of above differential cost was required to be deducted in order to credit the saving to the employer's account, which was not done and full payment was allowed.

Non-deduction of differential cost occurred due to weak contract administration this resulted in overpayment of Rs576 million.

Copyright Business Recorder, 2021