ISLAMABAD: The Auditor General of Pakistan (AGP) has objected to an award of a housing project worth Rs14.7 billion by the Capital Development Authority (CDA) to the Frontier Works Organisation in violation of the Public Procurement Regulatory Authority (PPRA) rules.

According to the CDA audit report for the year 2021-22, the civic body flouted the rules in the award of the project and awarded it to the FWO even though the latter had no experience in housing projects.

The audit report said that the CDA was granted a one-time exemption by the Cabinet Division to bypass the PPRA rules on the recommendation of the regulatory authority’s board.

It stated that a Memorandum of Understanding (MoU) between CDA, the Naya Pakistan Housing and Development Authority (NPHDA), and the FWO for the execution of the housing project on an Escalation Payment Certificate (EPC) basis was signed on August 4, 2021.

Audit report says PC-1 based on lump sum rates instead of detailed quantities

The Special Project Directorate of the CDA awarded the work on the EPC basis with an agreed amount of Rs13.4bn. The completion period was two years, it said, adding that CDA issued a revised acceptance letter and increased the EPC from 13.4bn to 14.7bn.

The audit observed that the PC-1 of the project was “approved for an amount of Rs15.3bn by the CDA and the Development Working Party (DWP) wherein it was provided that the project would be executed” through the FWO.

The CDA and DWP had no mandate to decide whether or not the project would be executed through the FWO, the report said, adding that the FWO did not possess any expertise in housing projects either.

It further observed that the PC-1 was not based on detailed quantities and rates instead lump sum per square feet cost was provided. The auditor noted that the MoU between CDA and FWO was signed on April 8, 2021, while the exemption from the PPRA rules was granted on April 16. “It showed that CDA took [the] decision in the anticipation of the approval.”

As per the audit report, CDA could have gotten better rates had it floated the tender and opted for a competitive process. It recommended a thorough probe into this matter and holding the CDA officials accountable.

In a related development, a contractor of CDA lodged a complaint with the Islamabad High Court (IHC) against the high-ups of the civic agency for awarding projects without inviting tenders, even for mega projects.

Chaudhry Ghulam Raza contended before the court that a few weeks back he exchanged some “harsh words” with the CDA officials over the matter, and in retaliation the CDA blacklisted all firms belonging to him and his relatives.

“Furthermore they even banned our entry on the CDA premises and stopped our previous liabilities in the Finance Directorate so we don’t have the resources to fight them in court,” the applicant added.

The application stated that the officers also implicated him along with others in a “false case” in order to teach him a lesson and the matter was pending in a trial court in Islamabad. The petitioner claimed that the local police at the behest of the CDA were targeting his son and relatives. He requested the IHC chief justice to order an inquiry into this matter to ensure justice.

Published in Dawn, October 14th, 2022