The Ministry of Water and Power conducted serious irregularities, embezzlements and misappropriation in Kachhi Canal project and due to delay in the completion of project its cost escalated from Rs 31.21 billions to Rs 57.6 billions, it was learnt on Monday. Well-placed sources in the Ministry of Water and Power told Business Recorder that the technical and Financial Audit of Kachhi Canal project planned to be completed in 2007 has so far not been completed, raising its cost by Rs 26.4 billions.
The sources said that under the directives of Prime Minister Nawaz Sharif, a consortium of the National Consulting for Business and Management Solutions (Pvt) Ltd (NCBMS) and Euroconsult Pakistan (Pvt) Limited was engaged to carry out the technical and financial audit of the project. They said that according to audit report, relaxation of criteria enabled SMADB-Lilley-Sharukh JV to participate and win the tender KC-04 at an exorbitant price of Rs 9.74 billion which is 41.73% higher than the engineers'' estimate (Rs 6.87 billion).
The sources said that the Ministry of Water and Power admitted the relaxation and said that the tender documents were issued to the pre-qualified firms/JV. The Ministry said that due to relaxed criteria, sufficient competition was generated amongst five firms instead of only one (as per original criteria). The Ministry said the bid price of M/s SMADB-Lilley-Shahrukh JV amounting to Rs 9.84 billion was the lowest among the participants.
The sources said the audit observed that the project was not properly planned /executed, as the Implementation Wing of the Planning Commission did not monitor the project with the required spirit/purpose. About the contract KC-05, sources said that Habib Rafiq Limited and Ghulam Rasool and Company were pre-qualified as consortium partners of M/s Central China Power Group. However, the consortium leader, M/s Central China Power Group, abandoned the project midway which enabled Habib Rafiq and Ghulam Rasool and Company to execute their part of tender KC-05 at prices of Rs 1.5 billion and Rs 6 billion, respectively, which were 13.35 % higher than the engineers'' estimate. While responding to a question about it, the ministry said that the contract was awarded to M/s CCPG, GRC and Habib Rafiq (JVs) at a bid price of Rs 12.5 billion. Due to security hazards, the progress of work remained slow and ultimately M/s CCPG was released from the further performance.
The sources said the audit also observed that in certain cases, payment was made to contractors prior to the approval of competent authority. It was also observed by the audit that an excess amount of KC-04 was paid to contractor without approval of competent authority. They said that according to remarks of water resources section, the respondents did not answer the question whether or not payments were made without the approval of competent authority. If the payments were made without due approval and fulfilment of procedural formalities, this is an anomaly which lies with Wapda.
They said that original PC-1 was prepared prior to completion of feasibility studies. They said that revised PC-1 resulted in increase in cost of project by Rs 37.79 billion. They said that a delay in project and cost overrun could be attributed to the wrong order of execution, hill torrents and precarious law and order situation. The work remained suspended for more than four years (2010 to 2014).
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