Rs11b irregularities detected in project

The under-construction New Islamabad Airport likely to open next year has come across the gloomy situation as the federal audit authorities have detected the irregularities worth Rs11.028 billion in project’s execution.
According to a report of Auditor General of Pakistan, the account assessors have detected the financial mismanagement worth Rs1.076 billion, mis-procurement valuing of Rs8.309 billion, anomalies worth Rs1.44 million in construction work and mismanagement of assets worth Rs226.991 million during 2006-11. Being constructed over yet-available 3285 acres of land in Fateh Jang area, the project was kicked off in 2007. The airport named after Shaheed Benazir Bhutto, would replace the existing overloaded Chaklala Airport and would be equipped to handle all types of aircraft including the new generation aircraft such as the Airbus A-380.
The airport will have a 180,000mý modular terminal building which will initially be able to handle nine million passengers a year and will also have two 4,000m-long category-F runways.
According to the corruption detectives, the Civil Aviation Authority had awarded a contract `Landside Infrastructure’ Package-8 to a joint venture M/s LTH (Lagan-Technical Associate-Habib Construction) at cost of Rs6.852 billion without pre-qualification.
The firm was also 70pc behind of the schedule for already awarded work of package-1while another joint venture of a Chinese firm and local company was not pre-qualified despite securing 78 marks on the ground of lagging behind the schedule of work already awarded to them.
The CAA awarded a `cut and fill earthwork’ to a company in violation of the set criteria allowing the compensation for excavation and separate payment for establishment of embankment from runway excavation resulting into loss of Rs998.008 million. According to the report, the CAA split the construction work of runway, taxiway, parking, roads and bridges into two packages despite pre-qualifying firms to execute work in single package that cost Rs412.590 million higher.
An over payment of Rs212.596 million was detected made separately to a contractor for transportation of excavated material, though the cost of the work was already included in the main work.
The CAA had hired an Estate Agent to complete purchase of 355 kanals of land valuing Rs168.625 million within 30 days till December 12, 2006 or pay total cost plus 20 percent cost of land if he failed to transfer land to Authority.
The CAA released Rs139.375 million to agent who failed to take possession despite paying money to people. The contractor did not
pay back Rs167.250 million containing total paid amount and 20 percent of cost to CAA.
According to the auditors, three contractors for different works failed to complete their assignments within stipulated time but neither the extension was granted nor the delayed completion compensation for Rs697.955 million was recovered from the contractors.
Other audit observations included excess payment of Rs431 million due to less consumption of bitumen, irregular payment of Rs73.720 million for setting up engineers’ office, excess expenditure for hiring excess staff worth Rs23.52 million and loss of Rs73.31 million for accepting the insurance of the company other than National Insurance Company.
The AGP observed that most irregularities were due to improper consultancy services, proper monitoring and weak internal controls, advising the Authority to overcome all these deficiencies.