Hailing the performance of National Highway Authority (NHA) for timely completing a number of projects, especially Lahore-Abdul Hakeem Motorway section, the Public Accounts Committee (PAC) has advised the NHA to bring more transparency and eliminate irregularities in the projects.
The meeting of the PAC held here on Wednesday under the chairmanship of Syed Khurshid Shah to discuss and review the audit objections of the NHA of 2016-17 was informed by Auditor General of Pakistan (AGP) that during the audit period, irregularities worth Rs 508 billion were detected in the accounts of the NHA.
Chairman NHA Jawwad Rafique Malik briefing the participants said that Lahore-Abdul Hakeem section of motorway will be completed three months before the scheduled timeframe and opened to traffic. He added that AGP objections on most of the projects cost are based on misunderstanding and China-Pakistan Economic Corridor (CPEC) projects are being carried out either on Chinese loans by Chinese companies or public-private partnership basis.
Audit officials said that NHA awarded contract of Sukkur-Multan section of Karachi-Lahore Motorway (KLM) in violation of the set rules and regulations, which according to DG Audit Works caused Rs 166 billion loss to the national kitty. According to AGP, the whole project was awarded against the set rules.
Responding to the audit objection, the secretary Ministry of Communication said that the project is a part of China-Pakistan Economic Corridor (CPEC) and China set a condition that this project will be laid down by a Chinese company. Member committee Azra Fazal Pechuho said if contracts would be awarded in this way to the companies of the friendly countries, concerns and doubts will emerge. While expressing doubts on the substandard work on the Sukkur-Multan portion of the motorway she said that it was the most important link connecting two provinces but substandard material has been used in the construction.
The chairman committee also objected to the award of contracts to Chinese firms, saying that Hyderabad-Sukkur portion of the motorway project was being awarded to a Chinese firm at Rs 260 billion which is 42% higher than the actual rate. Shah also objected the construction of Hyderabad-Sukkur motorway on public-private partnership basis, saying that the people of Sindh will keep paying the cost for 25 years. He said that the federal government should have funded the project completely instead of going into public-private partnership.
He said that he would not allow the NHA to complete the project at escalated cost, as the people will have to pay the price, adding if the government starts work on the project at current cost, "I will take the issue to a court of law," Shah said. Member committee Mahmood Khan Achakzai said that the China is conditionally funding the projects through Chinese contactors which did never happen before this.
The meeting was also informed by AGP officials that from 1999 to 2016, the motorway police fined Rs 19.7 billion on account of driving violations to various violators but Rs 2 billion were not deposited with the NHA. Secretary Ministry of Communication responded the objection saying that AGP figures are not correct. The PAC asked the secretary to present correct figures before the panel within three weeks.
In the meeting, audit observations raised by the DG Audit Works were presented before the committee regarding 230km Lahore-Abdul section of eastern corridor of the CPEC, which is going to be inaugurated before time in May 2018. Chairman NHA Jawwad Rafique Malik gave detailed replies to the audit observations and presented complete record to the committee. The PAC eliminated the audit observations and declared the contract as per rules.
Jawwad Rafique Malik told the committee that in 2015-16, NHA made an excellent saving of Rs 122 billion in two contracts. He said one contract was of government of Pakistan, while the other was related to a soft loan from China Exim Bank. As per apparent estimates, if these contracts had been awarded at available rates, there would have not been any objection to NHA. But dedicated and active team of NHA worked devotedly and saved a huge amount through competition.
He informed the committee that the contract was awarded to company on merit for zero corruption. On this occasion, the committee members expressed confidence on NHA and appreciated its performance for completing the project before time as per international standard at the lowest possible rates.
However, according to an audit report, irregularities and misappropriations worth Rs 148.6 billion were found in the Karachi-Lahore Motorway project. The Auditor General of Pakistan (AGP) revealed that the project relating to the engineering, procurement and construction of Karachi-Lahore Motorway section-III, Lahore-Abdul Hakeem (230 kms), was awarded to a Chinese firm M/s CR20G-ZKB-KLM-JV at Rs 148.654 billion.
Audit observed that the whole project was put to tender in one package, violating PEC standard procedure for pre-qualification of contractors, wherein it was preferable to divide the packages of project in such a way so as to allow medium-sized construction firms to bid with preference to provide benefit to local construction industry in Pakistan.