The auditor general of Pakistan has identified embezzlements and financial irregularities worth billions in the accounts of the National Highway Authority (NHA), which range from the award of toll collection contract below reserve price to bogus expenditures, overpayments and favours in award of construction contracts. These cases are separate from many of the issues raised by the audit that the NHA did not even bother to respond, and NHA officials did not furnish requisite record due to non-adherence to rules n several other cases. According to the NHA audit report for the year 2010-11 available with Pakistan Today that carries 86 audit objections involving billions of rupees, the authority awarded 10 contracts of toll collection at various toll plazas. The receipts on account of toll collection during the year 2009-10 were Rs 1,551.69 million against the reserve price/baseline of Rs 2,014.52 million, indicating a shortfall of Rs 462.83.
A committee headed by the NHA chairman determined the baseline for toll collection at Khanewal at Rs 170.65 million against which the highest bidder M/s Green Field Enterprises quoted a bid of Rs 220.09 million, with a monthly guaranteed bid of Rs 18.34 million. The statement of receipt prepared by the revenue section indicated that an amount of Rs 132.96 million was received during the year 2009-10 against the auctioned bid of Rs 220.09 million, incurring a loss of Rs 87.13 million. The report said the Lahore general manager maintenance incurred an expenditure of Rs 0.83 million on POL drawn through two fleet cards, neither of which bore any vehicle registration number or had a log book to substantiate the claim.
NHA Procurement and Contract Administration Wing GM dropped the lowest bidder, M/s Husnain Cotex Ltd with a bid cost of Rs 7,006 million, to award the contract to M/s LIMAK ZKB JV at a cost of Rs 7,932.50, an estimated loss of Rs 926.34 million. The NHA’s ADB general manager could not liquidate the guarantees of mobilisation advance and performance bond of a defaulting contractor M/s Husnain Cotex Ltd, which resulted in the non-recovery of Rs 448.59 million. In another case, NHA Headquarters Establishment general manager procured 22 vehicles from a project’s fund for operational needs, but the vehicles remained with officials of the Ministry of Communication instead of being utilised in the project.
In another case, NHIP Punjab general manager paid Rs 19.78 million for repair and maintenance of vehicles, which was the responsibility of the contractor. In a clear challenge to the authority of the AGP, the NHA authorities did not furnish requisite record relating to Qila-Saifullah-Loralai-Wiagum Rud Section (124Kms) Project despite repeated reminders and the audit believes it was because of non-adherence to rules and a complete disregard of financial control.
Some of the major irregularities pointed out by the audit include: Insurance of work from ineligible insurance company – Rs 28,843 million, irregular award of work without tendering – Rs 5,994 million, acceptance of tender beyond permissible limit of 10 percent – Rs 2,654.24 million, irregular excessive charging of establishment expense than provision of PC-1 – Rs 1,089.71 million, Irregular acceptance of bids beyond permissible limit – Rs 758.97 million, expenditure in excess of the approved limit – Rs 1,115 million, non-recovery of outstanding dues from the defaulting contractor – Rs 448.59 million, undue financial aid to contractors – Rs 904.49 million and overpayment – Rs 211 million, non-recovery of the cost of balance works – Rs 232 million, less recovery on account of deposit work – Rs 181.77 million and excess payment of fuel, overheads, profit and income tax – Rs 174.10 million.
