ISLAMABAD: The Senate Standing Committee on Economic Affairs headed by Senator Saif Ullah Abro has declared the bids for ADB’s CAREC Tranche-III (Rajanpur - DG Khan - DI Khan) Project of M/s NXCC, M/s Dynamic Constructors and M/s Rustam Associates null and void due to failure to meet the mandatory average annual turnover criteria of local partners.
The committee took the decision after thorough discussion on available documents and views of officials from NHA, EAD and PPRA.
According to the official minutes of the Committee, the auditor-submitted documents were found to be unverified and potentially fraudulent, and due process was not followed and without supporting documents and refusal from the companies for provision of documents of ADB CAREC Tranche-III (Rajanpur - DG Khan - DI Khan) Project.
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The Committee directed that EAD and its concerned department (NHA) may notify the ADB that the bids of ADB CAREC Tranche-III (Rajanpur - DG Khan - DI Khan) Project were technically invalid and were manipulated due to the mala fide intentions of NHA officials and the contractors.
Furthermore, NHA may also convey its findings to ADB and consider blacklisting all three companies that participated, due to the submission of fake documents and misinformation to the department.
The copies of the letter may also be sent to the Prime Minister and the Committee.
The EAD was directed to inform ADB within two days, that the bid was technically invalid and highlight the firms’ non-compliance and the fraudulent nature of the bids submitted for the ADB CAREC Tranche-III (Rajanpur - DG Khan in DI Khan) Project.
The copies of the letter may also be sent to the Prime Minister and the Committee. EAD may officially communicate the findings and recommendations of the Committee, as made in its previous meetings, to ADB.
EAD may also share these findings with the Inquiry Committee constituted by the Prime Minister.
The committee also decided to write to the Prime Minister to highlight its critical observations and findings regarding the project through the office of the Chairman Senate.
The EAD and its concerned department (NIIA) may initiate legal action against the auditor, A.B.M & Co (Chartered Accountants), for submitting a report without supporting documents for ADB CAREC Tranche-III (Rajanpur - DG Khan - DI Khan) Project.
It was noted that auditor had prepared working papers for payments mentioned in the audit sheets without any supporting documentation. The legal action was also recommended against the arbitrator, Zafar Hussain Siddiqui, for alleged manipulation.
Standing Committee Chairman Senator Saif Ullah Abro highlighted that bid evaluation for the project was initially announced based on auditor reports without properly verifying the credentials of M/s Ningxia Communications Construction Co, Ltd (NXCC), M/s Dynamic Constructors, and M/s Rustam Associates.
The lead partner had previously been disqualified in the ADB CAREC Tranche-11 (Shikarpur -Rajanpur) in 2021 and the Yarik-Zhob Projects in 2022, nevertheless was declared qualified for the huge project of about Rs. 172 billion in CAREC Tranche - III.
The NIIA Executive Committee also terminated the Lodhran-Multan project over non-performance in 2023. It was disqualified on the basis of submission of fake documents, forged stamp seals and lacking experience for the project as mentioned in the bid evaluation report of the ADB Yarik-Zhob Project.
The committee maintained that M/s NXCC was a non-performing firm and was currently involved in litigation related to the Lodhran-Multan Project. The department should not have agreed to arbitration since the project had already been terminated by the NHA Executive Board for non-performance.
Instead, it should have challenged the matter in the Supreme Court. The Chairman Committee also expressed concern that NHA proposed Zafar Hussain Siddiqui as an arbitrator, despite his past association with the JV partners (M/s Dynamic Constructors and M/s Rustam Associates) of M/s NXCC.
The Chairman Committee informed the Members that Managing Director, Public Procurement Regulatory Authority (PPRA) had attended the previous meetings and had given a detailed briefing about the complaints received during the project’s tendering process and the actions taken in response.
The Committee had allowed the NHA considerable time to submit the additional documents it had requested for verification. In the meantime, the PPRA issued its final decision and suspended the procurement process for the project.
Senator Syed Faisal Ali Sabzwari asked whether PPRA rules also apply to foreign-funded projects. The committee chairman explained that MD, PPRA had clarified in previous meetings that for foreign-funded projects, PPRA rules state that if there is a conflict between the donor agency’s procurement policies and PPRA rules, the donor agency’s documents take precedence for the conflicting areas.
The CEO, NHA had also explained that for foreign-aided projects, PPRA rules allow exemptions in favor of International Financial Institution (IFI) guidelines. Therefore, Asian Development Bank’s (ADB) procurement rules were fully applied to the CAREC Tranche-III project under the PPRA framework.
The committee also directed EAD and the concerned department (NHA) to provide a comprehensive report on the Section I (Chakdara - Timergara) of the N-45 project before the next Committee meeting. And to provide the necessary information on the issues regarding the rehabilitation of the Chitral Approach Road raised by Senator Falak Naz in the next Committee meeting.
The EAD and the concerned department (NIIA) was tasked to recover approximately Rs. 1.7 billion as tax relief from the firms that participated in the Shandoor - Gilgit project.
Copyright Business Recorder, 2025
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