Rs756m irregularly paid by FGEHF for ‘mobilisation advance’


-advance payments were made for infrastructure development of sectors F-14 and F-15

ISLAMABAD: The Federal Government Employees Housing Foundation (FGEHF) released Rs756 million under the head of mobilisation advance to a contractor for infrastructure development in F-14 and F-15 without ensuring whether the contractor has taken over the project site or not, according to an audit report.

This was done in clear violation of rules which state that the employer shall make an advance payment as an interest-free loan for mobilisation when the contractor submits a guarantee at the rate of 10 per cent of the accepted contract price in two parts I-e. 50 per cent upon mobilisation at the site and 50 per cent after 40 days of the first payment. The advance payment shall be repaid through percentage deductions from the interim payments.

Furthermore, the audit observed that the advance payment was made before fulfilling the conditions of the letter of acceptance resulting in an irregular payment of the mobilisation advance. It was cited that the irregular payments were made due to lack of oversight mechanism for the implementation of internal controls and poor contract management.

When asked, the FGEHF explained that half of the mobilisation advance was paid to the contractor against bank guarantees after mobilisation at the site for a detailed survey of topography to prepare detailed working drawings and designs.

Subsequently, a land possession issue arose and its affectees filed a case against the acquisition. Resultantly, the Islamabad High Court (IHC) has given decisions against the acquisition of land in F-14 and F-15.

The IHC’s decision against which the FGEHF has filed an appeal in the Supreme Court (SC) affects thousands of former and serving government servants. The housing foundation has left its allottees high and dry for months as it has failed to return their deposited amount despite the court’s orders.

An adverse judgment by Justice Athar Minallah of the IHC was maintained by a two-member bench headed by Justice Mohsin Akhtar Kiyani who pointed out dozens of procedural and financial illegalities, the foremost being that development in ZONE-I where sector F-14 is located can only be carried out by the Capital Development Authority (CDA), the housing foundation’s failure to provide water supply and sewerage system, and also the illegal generation of funds by government employees in the name of public service.

Since 2003, the FGEHF has allotted plots to government servants and the general public, however, many amongst them have yet to gain possession due to encroachments in areas slated for development.

In addition to this, it has also failed to cater to the needs of sectors already under its control. The main reason behind this neglect, sources claim, boils down to the fact that FGEHF has invested its resources and energy in planning, selling and minting money from its new residential schemes notably in Barakahu, F-14 and F-15.