ISLAMABAD: The Pakistan Tehreek-i-Insaf (PTI) has urged the Public Accounts Committee (PAC) chairman to take notice of irregularities in projects of the National Highway Authority (NHA), including certain schemes initiated under the China-Pakistan Economic Corridor.

PTI leader Dr Arif Alvi, who is also a member of the PAC, has written a letter to Syed Khursheed Shah, asking him to take notice of over Rs400 billion irregularities pointed out by the Auditor General of Pakistan in an audit report for 2016-17.

The letter said the report on NHA’s accounts for 2016-17 found 52 cases involving around Rs470bn, where irregular award of contracts, violations of Public Procurement Regulatory Authority (PPRA) rules and unauthorised expenditures have been observed.

“I am requesting you to call an urgent meeting of the PAC on the specific issue as gross violations leading to massive corruption — actually ‘plunder’ — are evident in these transactions,” Mr Alvi said.

In a letter to PAC chairman, Alvi refers to audit report in which wrongdoing worth Rs400 billion has been pointed out

In 102 cases, the auditors pointed out weakness in internal controls that led to irregularities/losses of about Rs120bn. The audit report also pointed out seven cases of poor performance, including mismanagement, placing an undue burden on the national exchequer and inefficient utilisation, causing a loss of Rs7bn to the national kitty.

One of the main NHA projects mentioned in the report is engineering, procurement and construction of a 230km section of the Karachi-Lahore Motorway between Lahore and Abdul Hakeem worth Rs148bn. The work was awarded to a joint venture (JV) of China Railway 20 Bureau Corporation (CR20G) and Zahid Khan & Brothers (ZKB) on Dec 8, 2015.

The audit observed that the whole project was tendered in one package. “Very tight condition of experience for prequalification reduced the quantum of response,” the audit noted, explaining that no Pakistani firm could win tenders in its individual capacity. “Had the project [been] divided into multi[ple] packages, it would have resulted in more healthy competition,” the auditors pointed out.

According to the report, a JV of ZKB and China Gezhouba Group Company was disqualified in the prequalification process. However, ZKB was allowed to form another JV with CR20G at the bidding stage, in violation of PPRA rules. At the time of bidding, the lowest bidder also did not provide the mandatory bid security of Rs500 million, and consequently the bid was supposed to be declared “non-responsive”. However, the audit noted that this was not done by the NHA.

Later, the JV reduced its bid from Rs159.784bn to Rs148.654bn following negotiations between the NHA and the contractor, another violation of PPRA rules, the report said. “It is evident that the work was awarded irregularly. The issue has also been highlighted by Transparency International... had the work been retendered, and in packages, it would have been awarded on much lesser rates,” the report said.

The letter said the auditors also found something fishy in the award of a Rs294.352bn contract for Sukkur-Multan section of the KLM awarded to the China State Construction Engineering Corpora­tion (CSCEC). The project, whose cost was estimated by CSCEC at Rs240.158bn was awarded to the same firm at higher rates, the report said, adding that the rates quoted by CSCEC were “very much on the higher side” as compared to the PC-1 rates offered by the same contractor.

Published in Dawn, October 19th, 2017