ISLAMABAD, June 26: A bill of about Rs2 billion received by the Earthquake Reconstruction and Rehabilitation Authority (Erra) has put it in a fix because this year it has been given only Rs1 billion for its projects. The bill has been sent by National Engineering Services Pakistan (Nespak) for designing and consultancy services it provided to the authority.

The senior officials of Erra have decided to take up the issue with Prime Minister Yousuf Raza Gilani, who can intervene in the matter as chairman of the Erra council. If the issue is not resolved soon, the Erra's projects in the flood-affected areas, which have already been delayed, may be delayed further.

A source told Dawn that former prime minister Shaukat Aziz awarded the tasks of designing and consultancy for the Erra projects to Nespak, which billed the authority for its services at an enhanced rate of 17 per cent of the cost of the projects.

He claimed that some private-sector firms were charging only 4-5 per cent of the total cost for the same services. He added that under the Public Procurement Regulatory Authority (PPRA) rules, a consultant could not be the designer of the same project.

Answering a question, he said that since the decision to award the tasks of designing and consultancy to Nespak was taken by a former prime minister in his capacity as head of the Erra council, only the sitting premier could reverse it. That's why the Erra had decided to approach Prime Minister Gilani, he said.

He said the Erra was considering a couple of options to resolve the matter. Under one option, it could request Nespak to send its consultants and designers to Erra on deputation as both the organisations are public-sector entities. Under the second option under review, the Erra could invite open bidding for the said services.

Under both the options, he said, the Erra would save millions, leaving major amounts for spending on the construction works of the projects.

Turning to the financial health of Erra, he said this year the government had allocated Rs12 billion for the authority's projects, but due to problems that adversely affected almost all public-sector organisations only Rs1 billion was released.

Officials of Erra and Nespak have held several meetings to resolve the issue but to no avail.The Nespak is also facing financial problems because several public-sector organisations for which it has rendered services have defaulted on payments.