This time too, the person behind this alleged fraud is none else but former chairman NICL, Ayaz Khan Niazi, said to be a close friend of ex-Prime Minister Gilani. Like the Rs5 billion land scam in the NICL, this time too the Transparency International Pakistan has written a letter to the acting chairman NICL to form an independent inquiry to bring forth the truth and to fix the responsibility and recover the allegedly looted amount.

TI-Pakistan’s letter says that a complaint on bogus insurance claims paid as well as in process of being paid by NICL in last three years has been received and the allegations include the following: Approximately Rs640 million bogus claims of 2009-2010 flood damages paid for allegedly incurred losses by various contractors of government departments i.e. Wapda etc. This case was also taken up by the Federal Investigation Agency in 2011. Approximately Rs350 million bogus claims paid for 2010 flood damages to the same contractors. Approximately Rs160 million bogus claims for 2010 flood damages have been approved for payment, but delayed due to objections raised by internal auditor. Approximately Rs550 million bogus claims for 2010 flood damages are submitted to NICL by the same contractor, and are in the process of surveys being conducted by nominated surveyors.

It has been reported by the complainant that the claims were paid illegally directly to the contractors, though under the terms of the insurance policy, the policy is issued in the joint names of client and contractors, and payment against all claims of damages are to be made only to the client, such as Wapda and the client after receiving the insurance claims, disburses the share of the contractor, the letter says.

“TIP has examined the complaint, and confirmed that according to Pakistan Engineering Council’s standard bidding documents, mandatory to be used by NICL in all contracts, under PPRA Regulations 2008, the insurance policy shall be in the joint names of the contractor and the employer. In case the payment cheques are issued directly in the name of the contractors, it amounts to collusion between NICL staff, surveyors and contractors”, it mentions.

TIP has requested the chairman to confirm whether the payment of these claims was made directly to the contractor and not to the client. “If the payments of the bogus insurance claims were made in the names of contractors, TIP requests the chairman to set up an independent inquiry to get the truth, and take appropriate action against the NICL staff, surveyors and contractors, and also recover the bogus payments made to the contractors. Kindly also note that under the Public Procurement Rules 2004, all contractors are to be fined 10 times the loss incurred to GoP due to their fraudulent practice under Rule 2(f) and Rule 7, and the relevant government departments be advised to initiate action against their respective contractors.”