ISLAMABAD, Jan 22: Call fresh bids or whatever, bureaucratic gimmicks continue to win a cartel of construction companies fat contracts from the Capital Development Authority (CDA).

Insiders told Dawn that two Kashmir Highway contracts worth Rs3 billion would go to the same firms whose selection in the first bidding last October was challenged on several counts.

Competitors had alleged that the two winners had formed a cartel of five firms and that their abnormally high quotations were accepted because of deals manipulated behind the scene.

Rules of the Pakistan Procurement Regulatory Authority (PPRA) and Pakistan Engineering Council (PEC) say that if any contract is won through pooling or manipulation, the authority concerned should retender and invite other contractors too for open competition.

However, in a bid to cover up the manipulation and keep the favourites in, the CDA, instead of refloating the tenders to ensure open competition, asked the alleged cartel -- Kingcrete, GRC, Sachal, Latif and Company and Matracon -- to file fresh bids quoting lower rates.

Although, the new rates quoted by the contractors were lower than the previous bids, it would not affect the total cost of the projects because the authority’s ‘jugglers of road engineering’ had already changed the baseline of the contracts protecting the successful contractors from the clause of de-escalation that is required if prices of construction material fall.

Now the rates of construction material have come down by 15 per cent even then there would be no cut in the cost of both the contracts.

The CDA has already split the project of Kashmir Highway into three contracts — two for either sides roads and one for four bridges coming in nine kilometre strip from Golra More to Peshawar More. The bids third project of bridges’ construction would be called later.

In October 2008, the contracts for reconstruction of Kashmir Highway (KHW) were won by Kingcrete and Ghulam Rasool and Company (GRC) quoting 47 per cent and 45.69 per cent rates above the benchmark set by the CDA.

Now the GRC has again clinched one of the contacts by quoting 32 per cent rate above the benchmark while the Kingcrete and Matracon who had jointly submitted the last bid acted smartly and won the second bid with 31 per cent higher rates but this time in the name of Matracon instead of Kingcrete.

A technical committee headed by member engineering Tahir Shamshad, formed by the CDA to evaluate the previous bids that were proved to be manipulated, had declared the bids ‘quite exorbitant’ and suggested that the rates should be below 29 per cent.

The CDA board reportedly approved the proposal of the committee in early November but it did not approve the idea of changing the baseline of the contracts.

It is worth mentioning here that the committee had suggested 29 per cent rates above than the estimated cost of the project when the rates of construction material were quite higher as compared to the present market rates. “Therefore the new bids should have been around 15 per cent above the estimated cost of the projects,” an official of the PEC told Dawn on condition of anonymity.

The official said, when the technical committee had suggested benchmark of 29 per cent in November, the rate of steel was over Rs70,000 per ton and now it is available at Rs55,000 per ton. Similarly, cement is now being sold at Rs300 per bag against Rs350 per bag two months ago and the price of diesel has dropped to Rs57 per litre from Rs70 per litre. The overall reduction in the price of construction material has dropped by 15 per cent, the official said.

When contacted, the member of Engineering of the CDA, claimed that the technical committee had not fixed any benchmark for the new bids. However, he had no justification whether the new rates quoted by the successful contractors were still match reduction in the present market rates of construction material.

Another significant step the CDA bosses had taken to smoothly approve the new bids was that the previous director road who had opposed giving go ahead to the previously won bids has been replaced a day before opening the fresh bids and one Asad Kiyani has been appointed as new director.

It is feared that Director Quality Survey (QS), who is stated to be an honest person and member of the tenders accepting committee, is likely to be replaced also by the ‘political lords’ of the CDA who have given a clear massage by removing director road that any official who will disobey them could be thrown away.

Recalling of tenders was the best way to make the procedure transparent and those contracts who were not pre-qualified for the bidding for KHW project three months ago, should have also been invited for the bidding, some analysts said.

The pre-bidding manipulation in the award of the two contacts was exposed a day before opening of previous bids in the letter which was also sent to the media disclosing that one contract will go to the construction firm Kingcrete and the other to Ghulam Rasool & Company (GRC) and they will quote rates 33 to 40 per cent above the estimated cost of the project.

The result of the bidding held on October 25-26 proved to be true as predicted in the letter and rates filed by Kingcrete and GRC were 47 per cent and 45.69 per cent above than the estimates costs of the two projects respectively.

Tenders for the first and second contacts were opened on October 25 and 26 respectively and even after lapse of two months the authority has not award the contracts because there is fear among the CDA officials that this mal practice will put them in hot waters one day.

In order to justify the result of first bidding, the CDA bosses have not only convinced the successful bidders (GRC and Kingcrete/Matracon) to reduce their bids but directed other three firms who had taken part in the bidding to slash down their rates too but no less than rates of successful bidders.