ISLAMABAD: The Natio­nal Highway Authority (NHA) received a good response to the auction of its used luxury and normal vehicles as 62 of the 76 vehicles put on auction were sold on Tuesday.

No bidder shows interest in buying 12 vehicles due to certain reasons while two bidders cancelled their bids.

The auction began at 10.30am and closed late in the evening, generating Rs60.39 million for the cash-strapped NHA whose liabilities have swelled to Rs35 billion.

In the latest development on Tuesday, the finance division informed the NHA that it had decided to release Rs12bn to the authority to provide it immediate relief from the financial crunch.

According to the NHA, 219 vehicles will be auctioned at all its stations across the country.

The auction of vehicles at the Peshawar station will be held on Wednesday while the last auction will take place on Nov 5.

Out of a total of 219 vehicles, 42 are luxury sports utility vehicles (SUVs), including Land Cruisers and Parados. Twelve of such vehicles are in the NHA headquarters, eight in Peshawar, two in Abbottabad, five in Lahore, four in Multan and two in Sukkur, besides 177 cars at different stations.

“Buyers purchased vehicles on rates which were higher than our expectations. For example, a Land Cruiser, whose auction price was Rs2.5m was sold at Rs4.05m,” said NHA member of adminis­tration Ali Sher Mehsud, who supervised the auction.

He said that a total of 219 vehicles would be auctioned in phases and on the first day the response of buyers was quite encouraging.

Because of serious financial crisis in the NHA not only mega development projects, but also those being executed by the authority under the China-Pakistan Economic Corridor (CPEC) have been halted.

The amount of liabilities in terms of payments to contractors is increasing with each passing day because after certain days the NHA is bound to pay dues of contractors with a seven per cent interest rate.

Once the construction works stop because of non-payment of dues, the contractors also charge prolongation charges (for their labour, machinery, etc, on the site).

Therefore, liabilities of the NHA are increasing by Rs600m a month (with 7pc interest which is estimated at Rs200m and prolongation charges of Rs400m).

The contractors of the NHA have not received payments since June and cheques issued by the last caretaker government were bounced the same month.

According to sources, the development projects stop­ped because of non-payment of dues include the Hakla-D.I. Khan Motorway and Karachi-Lahore Motor­way.

Most of these projects were related to the CPEC and were to be completed by December this year.

Published in Dawn, October 17th, 2018