Massive irregularities have been detected in the construction of the New Islamabad Airport, including awarding of work to ineligible contractors in violation of rules causing losses of billions of rupees to the national exchequer, a local English daily said in a report on Monday.
According to the report, the Auditor General of Pakistan (AGP) in its report for 2016-17 has identified violation of the Planning Commission’s project management guidelines, including rules of Public Procurement Regulations Authority in several projects.
The AGP’s report stated that tendering for ‘aircraft stand equipment’ was delayed without any justification, resulting in payment of higher rates because of limited competition and fluctuations in foreign currency rate. Work on this project was awarded at Rs5.99 billion or 25.3 per cent higher than the engineer’s provisional estimate of Rs4.7 billion, said the report.
“Audit maintains that unjustified delay in tendering process caused award of work at higher rates without revision of the initial Project Cycle (PC) I which was due to weak internal controls,” the AGP report, submitted in parliament recently, said.
The audit also observed that details of original and final estimates of the engineer were also not produced in support of the Civil Aviation Authority’s (CAA) reply.
For the project titled ‘special baggage handling system for passenger terminal building’, the audit noted that tenders were advertised in May of 2013 but contractors were not even registered with the Pakistan Engineering Council (PEC) in individual and joint venture capacity. Similarly, additional work of Rs587 million was awarded during negotiation process against PPRA rules, said the report.
Similarly, work on Airport Information Management System (AIMS), set to start in December 2015, was awarded at 281.39% higher cost than the approved cost.
According to the report, tender documents were issued without the Pakistan Engineering Council (PEC) registration and the scope of work was reduced for Rs402 million without intimation to other bidders as per rules.
In another project for fixing furniture, counters, signage and seating for passenger terminal building at the new airport, the auditor objected that the technical evaluation was not carried out in accordance with the criteria set in bidding documents, resulting in “irregular award of contract of Rs1.5 billion”.
“The bid evaluation process was not in line with evaluation criteria provided in bidding documents,” findings in the audit reports stated, adding that the compliance of the Departmental Accounts Committee (DAC) directive was not reported till the finalisation of that report.
In another project, the contractor failed to complete the work on the airport baggage handling within the specified time. The project’s cost was Rs4.5 billion and should have been completed by January last year, said the report.
According to audit observations, the contractor was unable to complete the work even after the expiry of the stipulated completion period, but CAA neither imposed liquidated damages nor recovered them. This resulted in non-recovery of damages amounting to Rs900 million or 20 per cent of the total amount that should have been recovered as per rules, it said.