ISLAMABAD: The Auditor General of Pakistan (AGP) observed grave financial irregularities in the National Highways Authority (NHA) amounting to Rs213.7 billion.
This amount also includes recoverable of Rs12.8 billion as pointed out by the audit.
According to the audit report 2022-23, the amount of audit observations exceeds audited outlays due to issues such as award of works which involve future spending, amount covering multiple previous years of spending, multiple reckoning of monetary impact in different audit observations pertaining to same transaction, etc.
However, it is pertinent to mention that the Audit Reports for 2020-21 and 2021-22 were not discussed by PAC till the finalisation of this audit report.
The audit recorded the irregularities as following, (i) Procurement/award-related irregularities amounting Rs71.86 billion, (ii) Execution of works, contract agreement amounting Rs110.74 billion, (iii) Management of accounts with commercial banks costing Rs623.38 million, (iv) Value for money and service delivery issues amounting Rs6.58 billion, and other irregularities amounting Rs23.87 billion.
The audit noted that the NHA awarded 10 works to various contractors, having agreement amount of Rs61.76 billion during the years, 2020-21 and 2021-22.
Audit observed that as per the NHA record these works were awarded without acquisition and clear possession of land. In the work “Improvement & widening of Chitral-Booni-Mastuj-Shandur Road” even the PC-I of the land acquisition was not approved by the Planning Commission as yet but the work was awarded and the construction activities were started in patches.
This resulted in the award of road works amounting to Rs61.76 billion without acquisition and possession of land. Audit maintains that the irregularity of award of road works without acquisition and clear possession of land occurred due to weak internal controls and non-observance of the Planning Commission’s guidelines.
The audit pointed out the irregularity in January 2022. The authority replied that a proactive approach was adopted by NHA for the procurement of works to make it efficient and to get better timely results as advocated by PPRA Rules. The land acquisition and procurement of works run parallel.
Once the land acquisition was substantially completed the project was awarded. There may, however, be patches which were still to be acquired due to local factors. It was thus, prudent to allow the NHA to commence construction activities after substantial acquisition of land.
The reply was not tenable because the award of works without acquisition and clear possession of land would result in the delay in the completion of work and enhanced cost during the execution of the works.
Similarly, during scrutiny of the record of the Procurement and Contract Administration Wing, the audit noted that the NHA awarded 11 works for the construction of roads (including Construction of Peshawar Northern Bypass Package-II and Package-3A) during 2020-21 to different contractors at a contract cost of Rs56.91 billion.
These contracts had the provision of the price adjustment clause with specific weightages of specified materials for price adjustment.
The audit observed that the detailed calculations for the determination of the weightages of specified materials as per procedures and parameters for the price adjustment formula of the Pakistan Engineering Council were not available in the record.
The audit also noted that NHA awarded different works to different contractors which were completed from February 2017 to July 2019 involving expenditure of Rs356.41 billion.
The projects included Peshawar Northern Bypass (Package1) at Rs1.98 billion, Construction of Yakmach to Kharan Road Project Section-I, II, III,and IV at Rs9.1 billion, Construction of Peshawar-Karachi Motorway Section-II Sukkur-Multan Section (392 km) Rs294.35 billion, and Construction of Faisalabad-Khanewal Expressway M-4 at Rs51.1 billion.
The audit observed that since the expiry of considerable time after the completion NHA did not finalise the accounts of said projects and PC-IV and PC-V had also not been prepared for submission to the Planning Commission as required.
As regards, Yakmach Kharan Project, the authority could not even start the procedure i.e. conducting of M&I survey, third-party validation, taking over certificate, substantial completion certificate and defect liability certificate. It is further added that assets i.e. vehicles, office and residence etc and survey equipment procured against these works had also not been taken on the stock register.
This resulted in non-finalisation of accounts and non-preparation of PC-IV and PC-V of completed works amounting to Rs356.41 billion.
The audit further observed that in the following cases, the NHA did not finalise the accounts despite the completion of works.
In another observation, audit noted that the general manager Maintenance West NHA Mianwali awarded eight works pertaining to the Rehabilitation and Improvement of Mianwali-Balkasar and Mianwali-Muzaffargarh Road to various contractors at agreement cost of Rs10.019 billion.
The audit observed that the authority awarded eight contracts to four contractors (two contracts each) without considering the criteria approved by the NHA Executive Board.
Copyright Business Recorder, 2023