ISLAMABAD: Contractors stopped working on all government-funded housing projects months ago due to cost escalation, dealing a major blow to the prime minister’s much-trumpeted vision to provide homes to the shelter-less, the Public Accounts Committee (PAC) was told on Thursday.

Housing Secretary Dr Imran Zeb, while briefing the committee on the ongoing projects of the Federal Government Employees Housing Authority (FGEHA) and the Pakistan Housing Authority Foundation, said the work on housing schemes that commenced during the Pakistan Tehreek-i-Insaf (PTI) government had stopped since an “extraordinary” increase in the price of steel and cement in August last year.

The PAC was examining the audit report of the Housing and Works Ministry for 2019-20.

Secretary Zeb said the construction work on government housing projects was under way as per schedule, but in August 2021 the cost of steel was “phenomenally” increased from Rs140,000 per tonne to 210,000, adding that during the same period the price of cement also saw an extraordinary raise.

Work stopped since Aug 2021 over increase in material prices, contractors’ demand for cost revision not met

Consequently, the contractors demanded a revision in the costs. However, since the escalated charges were much higher than the benchmark set by the PAC and the Public Procurement Regulatory Authority as well as the relevant rules, the housing ministry turned down their demand.

Dr Zeb further said the Pakistan Engineering Council and the association of government contractors also wrote letters to the prime minister expressing their inability to continue working on the existing costs. The federal cabinet analysed the issue and referred it to the Planning Commission.

“The Planning Commission is currently working on how the ministry can pay the cost escalation difference to the contractors,” he added.

He further informed the PAC that the contractors would not resume work until a Statutory Regulatory Order was issued that would enable the ministry to pay the cost difference.

PAC chairman Rana Tanveer Hussain expressed displeasure over the progress on housing projects and maintained that contracts should have been terminated and those who had stopped the construction work blacklisted.

Dr Zeb replied he had already served termination notices on the contractors.

Mr Hussain said the contracts should have been awarded to those who could undertake at least 25 per cent work with their own resources, as a contractor usually never pays even a single penny from his own pocket on any government-funded project.

Auditor General of Pakistan (AGP) Muhammad Ajmal Gondal informed the PAC that payment of the difference due to cost escalation was defined in the rules. “One can’t understand the reason for the delay,” he said, adding that a further delay would further increase the cost of the projects.

The housing secretary said contractors had offered the ministry to pay the price of steel and cement directly to the vendor.

The FGEHA is currently undertaking projects in Islamabad, Rawalpindi and Lahore.

Prime Minister Imran Khan had last month expressed displeasure over the non-completion of the housing authority’s Kashmir Avenue Apartments project in Islamabad’s G-13 area. The premier had inaugurated the project in April 2019.

He had paid a surprise visit to the site and found no one present there. The project director was then called to brief Mr Khan.

Meanwhile, the PAC also snubbed the Pakistan Public Works Department (PWD) director general (DG) for passing casual remarks against auditors while justifying the delay in concluding an inquiry against officials for making a payment of Rs719 million without approval.

The housing secretary told the committee that he will conduct an inquiry into this matter.

PWD acting DG Zahoor Ahmed started a blame game and accused audit officials, whom he called “audit walay”, of non-cooperation, claiming they were inaccessible and had an attitude problem.

AGP Gondal took exception to these remarks that he said were akin to shifting responsibility on others, adding the auditors performed their constitutional obligations.

PAC chairman Hussain issued a warning to the PWD DG, and when committee member Riaz Fatiyana tried to side with Mr Ahmed, Mr Hussain told him not to defend the casual behaviour of an officer on this forum.

Published in Dawn, March 4th, 2022