Corruption in foreign funded-projects: EAD clarifies jurisdiction in taking action against ministries

ISLAMABAD: The Economic Affairs Division (EAD) categorically stated that it cannot direct the Federal Investigation Agency (FIA), the National Accountability Bureau (NAB) or any other law enforcement agency to take action against other ministries as its role is confined to secure foreign loans for the federal and provincial projects.

Secretary of the Economic Affairs Division Muhammad Humair Karim stated this in a meeting of Standing Committee on Economic Affairs on Thursday.

The committee’s proceedings were dominated by discussions on a letter issued by the EAD questioning the committee’s jurisdiction in matters relating to action on significant irregularities and alleged corruption identified in foreign-funded projects across the country.

Senator Kamran Murtaza expressed his displeasure that a Section Officer had written a letter stating that the matter did not fall within the committee’s jurisdiction. He said the committee should first determine whether it had the authority to proceed, or not.

Chairman Senator Saifullah Abro questioned whether the Secretary was satisfied with the contents and wording of the letter and directed that concerned Section Officer, along with a representative of the Ministry of Law and Justice, be summoned before the Committee to explain the matter.

Senator Kamil Ali Agha termed the entire exercise an attempt to create confusion and divert attention from the significant irregularities and alleged corruption identified by the Committee in various foreign-funded projects across the country.

The Secretary EAD clarified that there was no element of disrespect towards Parliament in the letter and stated that Senate recommendations had always been implemented. He informed the Committee that it had earlier directed the EAD to write to the FIA and NAB regarding a matter relating to the Power Division. However, he said the EAD could not directly write such a letter against another ministry and had therefore sought legal opinion from the Ministry of Law.

He accepted full responsibility for the letter and its contents and reiterated that the division had not challenged the authority of either the Senate or the committee. He explained that legal opinion had been sought only to determine the procedure applicable to the EAD under the Rules of Business. He also acknowledged that the wording of the letter could have been drafted with greater care and sensitivity.

Kamran Murtaza also observed that foreign-funded loans were largely utilised for projects in Punjab, while the financial burden arising from cost escalations and corruption was ultimately borne by provinces including Balochistan and Khyber Pakhtunkhwa. He further noted that in foreign-funded projects, designs were frequently altered after loan approvals, no action was taken against responsible officials, and contract prices were deliberately kept low initially so that costs could later be increased.

The chairman committee stated that alleged corruption in foreign-funded projects had been established during previous committee meetings and that officials of the EAD present in those meetings had acknowledged this fact. He recalled that the committee had instructed the EAD to refer projects involving allegations of corruption to NAB and the FIA for further investigation. He asserted that Committee itself possessed the authority to directly refer the matters to the PAC, NAB and the FIA, but had instead asked the EAD to act in order to strengthen its oversight role in foreign-funded projects.

The chairman said Prime Minister had suspended nine senior officers and four members of the National Highway Authority on the basis of the committee’s findings and had never sought legal opinion from the Ministry of Law and Justice before taking action. The Chairman warned that the committee would express regret in its communication to PAC, NAB and the FIA by specifically mentioning the non-cooperation of both the EAD and the Power Division.

Copyright Business Recorder, 2026