Communication ministry & NHA projects: FY25 audit uncovers over Rs5.29bn malfeasance
ISLAMABAD: The Audit Report 2024–25 has uncovered over Rs5.29 billion in financial irregularities and procedural violations in the Ministry of Communications and its key agency, the National Highways Authority (NHA), across various highway infrastructure projects.
The highest irregularity, amounting to Rs2.51 billion, was found in the irregular award of work without approval of PC-I. The audit observed that the NHA initiated construction work on certain packages without the necessary planning approval, violating rules under the Planning Commission and the Public Procurement Regulatory Authority (PPRA). This raised questions about both transparency and compliance with federal development guidelines.
Another glaring discrepancy involved the loss of Rs551.87 million in Package-1 of the Hakla–DI Khan Motorway, where the work was prematurely awarded before acquiring the required land. The project faced long delays due to land acquisition issues, pushing up costs and causing disruption to the overall CPEC Western Route timeline.
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In a related observation, Rs511.67 million was paid to contractors due to faulty measurements and misapplication of rates in the same package. The auditors noted that quantities claimed and paid were not properly validated by field staff or supported with engineering estimates.
The report also highlights that the NHA suffered a loss of Rs360.91 million due to irregular bidding practices and flawed escalation calculations during another section of the Hakla–DI Khan Motorway project. The tendering process failed to ensure a level playing field and did not reflect prevailing market conditions.
An unjustified price adjustment of Rs300.8 million was also recorded, where contractors were awarded price escalations even beyond the allowed notification period. This adjustment was granted without verifying if actual cost changes warranted such increases.
Separately, auditors flagged Rs272.17 million in non-adjustment of recoverable advances, where contractors had been paid mobilisation funds that were never deducted from final bills. This reflects serious lapses in internal controls and contract enforcement.
An additional Rs224.55 million was lost due to delay-based price adjustments that were granted to defaulting contractors. Despite poor progress, the NHA allowed escalations instead of enforcing penalties under contract clauses.
Another audit para noted Rs217.2 million paid for non-scheduled items, which were outside the scope of the original PC-I and were never approved by the competent authority. This was done without competitive bidding and against standard procurement practices.
Finally, the auditors revealed Rs344.5 million in undue benefit given to a contractor by ignoring contract clauses related to progress and milestone penalties. The NHA failed to enforce provisions that could have prevented overpayments and encouraged timely completion.
Copyright Business Recorder, 2025