ISLAMABAD: Two of the four highway projects in Balochistan recently inaugurated by Prime Minister Nawaz Sharif as part of the China-Pakistan Economic Corridor (CPEC) have been awarded to the second lowest bidders instead of the lowest ones, causing a loss of over Rs650 million to the exchequer.

Interestingly enough, the prime minister inaugurated the western route projects on Dec 30 even though no formal letter of acceptance (LoA) had been issued (for formal award of contracts) to the successful bidders/construction firms.

According to the National Highway Authority (NHA), four contracts — two for N-50 and two for N-70 — were awarded to two separate joint ventures (JVs) and a single firm. The lowest bidder was not considered in two of the contracts and the second lowest firms have not been asked to match the lowest bids.

But an NHA official claimed that the authority had awarded the contracts in accordance with the criteria set by the Asian Development Bank (ADB), which is funding the projects.

For N-50, two projects called Package-I and II have been awarded. According to the NHA document, under Package-I, a 41km road from Zhob to Killi Khudae Nazar will be reconstructed by Limak-ZKB JV at a cost Rs4.8 billion. Under Package–II, a 40km road will be reconstructed from Killi Khudae Nazar to Mughalkot by Maqbool-Zarghon JV at a cost of Rs4bn.

Similarly, two separate projects have been awarded for N-70. The road under Package-I will be constructed by firm Umar Jan from Qilla Saifullah to Loralai at a cost Rs4.50bn. Under Package-II, construction of the road from Loralai to Waigum Rud has been awarded to Maqbool-Zarghon JV with an estimated cost of Rs3.02bn.

According to the NHA, Maqbool-Zarghon JV submitted the lowest bids for all the four projects, but it was not considered for two projects (Package-I of N-50 and Package-I of N-70). These contracts have been awarded to the second lowest bidders and the second lowest bidders have not been asked to match the lowest bids.

Maqbool-Zarghon JV expressed concern over the bidding process and wrote several letters to the NHA claiming that the contracts had been awarded ‘illegally’ to the second lowest bidders.

NHA General Manager Mukhtar Durrani, who deals with these contracts, claimed that no discrepancy or irregularity had been committed in the award of the contracts and said whatever the authority had done was in line with the ADB’s criteria.

“Although we have not considered the lowest bids in two of the four projects, we followed the ADB guidelines,” he said, adding that the NHA was to consider financial capacity of the firms and under the criteria, Maqbool-Zarghon JV, which had already won two contracts, could not execute the remaining two.

A question arises here if the lowest bidder (Maqbol-Zarghon) has no such capacity to carry out the rest of the two projects then why its bids were opened and why it had not been barred from submitting its bids for these projects.

According to the official, the decision to reject the lowest bids for the two projects was taken by the NHA board comprising its Chairman Shahid Ashraf Tarar and senior officials of the Planning Commission and the Finance Division.

Asked why the names of construction firms were mentioned on the inauguration plague of the projects unveiled by the prime minister, although they were not formally awarded the contracts, the official said: “In fact we have so far not issued letter of acceptance to the firms, but the NHA board has already decided which firms would be awarded the contracts.”

The NHA general manager had no answer when asked why the lowest bidder was not considered and why the second lowest bidders were not asked to match the lowest bids. “We just followed the ADB guidelines” was his only answer.

Published in Dawn, January 4th, 2016