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NHA facing over 3,000 court cases involving billions of rupees

NHA facing over 3,000 court cases involving billions of rupees

ISLAMABAD: The National Highway Authority (NHA) is facing over 3,000 cases of litigation involving hundreds of billions of rupees, including some related to China-Pakistan Economic Corridor (CPEC) projects, mainly because of alleged mass-scale irregularities and controversial award of contracts.

Faulty appointments and violations of rules have allegedly been experienced in NHA during the present government, documents available with Dawn revealed. It has been observed that the authority is facing such an ample amount of litigations despite it has an army of over 150 consultants who are getting monthly salary/parks/allowances runs in billions of rupees.

Some of the CPEC-related projects facing litigations, including Thakot-Havelian, Hakla-DIK, E-35 Havelian Abbottabad. Some other mage litigations are: Islamabad-Peshawar Motorway (M1), Islamabad-Lahore Motorway (M-2), Faialabad-Khanewal (M-4) and Karachi-Hyderabad Motorway (M-(9).

It has been learnt that more than 150 mega cases was being dealt by a cell called Dispute Resolution Cell (DRC) of the NHA headed by Senior Procurement & Contract Specialist retired Col Muhammad Azim.

Documents reveal alleged mass-scale irregularities and controversial award of contracts

Mr Azim, who has been serving the NHA since 2003, was re-appointed on Jan 7, 2011 for a period of one year and recently he has also been given extension of three months.

For the first time ever highest 389 printed audit paras drafted by none other but the Director General Audit (Works) against NHA for alleged irregularities in day to day affairs of the authority.

The audit report has also pointed out that the alleged irregular award of a contract at higher rates in NHA caused a loss of Rs166.174 billion, irregular award of contract in violation of Public Procurement Regulatory Authority (PPRA) rules and bidding documents — Rs 148.654bn, issuance of works beyond the financial capacity /limit of the insurance companies — Rs39.522bn, irregular award of works — Rs 18.526bn, irregular acceptance of non-responsive bid — Rs17.18bn, irregular award of works without revision of PC-1 — Rs 16.373bn, irregular payment of mobilisation advance due to non-obtaining of required insurance — Rs14.86 million, irregular enhancement in previous agreement — Rs3.005bn, a loss of Rs4.4bn was caused due to late start and non-completion of some projects, an abnormal delay in completion of a flyover project and ineffective site supervision — Rs150m and extra burden of Rs2.6bn on government exchequer due to non-completion of project within the stipulated time period.

Controversial appointments

It has been learnt that former NHA chairman Shahid Ashraf Tarar was appointed in December, 2013 and mandatory approval of his appointment was given by National Highway Council (NHC) headed by Minister for Comm­unication by virtue of his office before he took over the charge of his office.

However, the council’s meeting was chaired by Sheikh Aftab, the incumbent minister for parliament affairs in December, 2013 because the portfolio of the minister communication was held by former prime minister Nawaz Sharif.

According to the rules Mr Aftab could not chair the meeting and endorse the appointment of Mr Tarar.

According to the documents, some of the consultants have been given key positions on the NHA despite the fact that they were considered “outsiders”. Retired Col Salman Rashid is heading NHA Monitoring and Instruction Wing, retired Col Waqar is assisting member finance in day to day affairs and retired Col Musaddaq has been made head of the security on CPEC.

Presently 60 deputationists are working with NHA despite stern orders of the Supreme Court that no person could serve on deputation more than three years in any other department. Some of the key office holders on deputation are: Naveed Iqbal Walah (member central zone, Lahore), Abdullah Jan (member south zone, Karachi) Sajjad Ahmed, GM establishment.

INTRNTIONAL ARBITRATION ON M-1: One of arbitrations still facing by the NHA is regarding award a contract of Islamabad-Peshawar Motorway to a Turkish based firm called Bayinder Construction Inc (BCI).

According to a document, machinery and equipment imported by BCI was given to Jaffar Brothers Limited (JBL) was hired without tendering on heavy cost for evaluation of left over machinery and other equipment, however Pakistan Customs was the competent authority for this job. The financial impact was estimated from Rs5bn to Rs9bn with premature encashment of bank guarantee worth Rs4bn.

HUGE DUMP OF EXPLOSIVES: The NHA has no record of huge leftover explosives of BCI based at Burhan camp in 80 rooms full of magazines of detonators, mines and blasting material. It has been learnt that to hide where this material was used, an eyewash committee was formed under the member finance.

Award of contracts

The authority awarded a number of road projects to a local firm called ZKB allegedly without following rules. However, ex-NHA chairman Mr Tarar said these contracts were awarded after the firm stood lowest in the bidding process. He said NHA could not raise the issue of financial capacity of the firm to execute various projects simultaneously because it always came up with different international firms in joint venture.

Replying to Dawn queries regarding litigations, a NHA spokesperson agreed that the authority was facing over 3,000 litigations.

Regarding the Islamabad-Peshawar Motorway (M-I), he said BCI, the Turkish contractor, was expelled from M-1 project in 2001 and the NHA was engaged in litigation in three main forums: Bayinder’s cases in local courts, NHA’s encashment of bank guarantees in Turkey and Bayinder’s case in an international court for $746m claim. He claimed that the NHA’s success rate was 100 per cent in this case.

Regarding controversial DRC of the NHA, he said DRC made for Islamabad-Peshawar Motorway M-1 project was converted to DRC NHA on Sept 7, 2011, following the approval of NHA legal regulations by the NHA executive board. The spokesperson said the NHA engaged consultants by following PPRA rules in 2010 and thereafter contract was extended for two years terms as per contract law. “There is no age limit restriction for hiring lawyers, doctors and specialists through tendering procedure,” he said.

According to the NHA documents, the claims of China International Water and Electric Company (CWE) is amounting to Rs2.74bn plus interest, firm Bina Puri’s claims are about Rs30bn, Daewoo claimed for Rs824m in one case, Bayinder Construction Inc Rs52bn, Rakshani Builders Rs846m, Ayub Brothers Rs407m, firm Interc­onstruct Rs300m, AM Associates Rs190m, Rustan Dynamic JV Rs200m, etc.

Published in Dawn, December 18th, 2017

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