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April 29, 2015

Multan Airport upgrading project incurs over Rs 222m loss

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April 29, 2015

ISLAMABAD: Irregularities and corruption worth millions of rupees was reported on Tuesday in the construction, contracts and purchase of construction material for the Multan Airport as the Public Accounts Committee (PAC) discussed the audit report of the Aviation Division for the financial year 2010-11.
The committee, which met under the chairmanship of Syed Khursheed Shah, recommended to the government to blacklist the project management consultant, ECIL Ltd, for its poor consultancy.
It also referred the case of irregular award of licence agreement of cargo handling to M/s Air Gate International, amounting to Rs2.18 billion, and loss to the Civil Aviation Authority of Rs671.38 million to the FIA for investigation and asked the agency to submit its report to the committee within one month.
The audit officials told the committee that the licence was awarded to M/s Air Gate International for a period of three years from December 31, 2004 to October 22, 2007 at the rate of Rs18,150,000 per month with 10% cumulative increase for 2nd and 3rd year, instead of the required 12.5% and 15% respectively.
After the expiry of original contract/agreement, an extension was granted from 23-10-2007 to 27-09-2009 at the rate of Rs23,059,600 per month and subsequently, further extension for a period of four years was granted. This resulted in irregular award of licence agreement amounting to Rs2.184 billion and loss to the CAA of Rs671.38 million.
The officials of Civil Aviation told the committee that the matter was in the court of law and that the company had got a stay order.The chairman PAC referred the case to FIA and directed the DG FIA, who was present in the meeting, to investigate the case within one month and submit the report to the PAC.
The panel was informed that a contract was given to M/s Habib Rafique (Pvt) Ltd though its bid was higher than that of a Chinese company.The audit officials told the PAC that unfair evaluation and pre-qualification

resulted in irregular award of work of Rs3.17 billion (including 1.5% discontent offered after bid opening) to M/s Habib Rafique (Pvt) Ltd.
The CAA officials told the committee that the contract could not be awarded to the Chinese company because of the objection that the company did not submit the original bank draft of the earnest money but a photocopy was submitted.
The PAC also took up the matter of sub-standard and poor performance by the project management consultant — ECIL Ltd — for upgrading and rehabilitation of the Multan International Airport.
The audit officials told the committee that the performance of M/s ECIL remained unsatisfactory during the period of 47 months, in which only 47% progress was recorded, which caused losses to the CAA while Air Traffic Control and Rescue buildings were not completed on time.
The PAC recommended to the government to blacklist the company.Another audit para related to irregular payment of Rs7.128 million for catering during the inauguration of direct Haj flights from Multan and earth/ground breaking ceremonies of the terminal building without calling tenders.
The Civil Aviation Authority replied that the Ministry of Defence, vide letter no 6-6/2020 F-1 dated 13.10.2010, intimated that the prime minister of Pakistan would inaugurate the first Haj flight from Multan on 28-10-2010 and advised the CAA to make the necessary arrangements accordingly. Due to paucity of time and security risks, neither the event could be announced through press, not were quotations invited through advertisements.
The CAA officials told the committee that a high-powered organising committee was constituted to finalise the arrangements and renowned local caterers were contacted who submitted quotations which were opened in the presence of all members of the said committees and negotiations were held and payments made as per the approval of the CAA headquarters after verification by the committee.

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