PAC recovered over Rs118bn in just two months, says chairman

ISLAMABAD: The chairman Public Accounts Committee (PAC) said on Tuesday that the present committee had recovered Rs118.53 billion in just two months, “which is also reflected in the data of the Auditor General of Pakistan”.

He said this while giving details to the media about the recovered amount during the two months.

The PAC meeting, chaired by Junaid Akbar Khan, examined the audit para related to the Ministry of Water Resources for the financial year 2022-23 and 2023-24.

The audit officials told the PAC that unjustified increase in contract cost of Dasu hydropower project occurred due to changing scope of work through variation order in violation of Public Procurement Regulatory Authority (PPRA) rules and ignoring PC-I provision of Rs.29.413 billion. They told the committee that the cost of a Rs4 billion project of Wapda had escalated to Rs36 billion. They said during audit of accounts of the project director Dasu hydropower project for the period from July, 2022 to June, 2023, it was observed that PC-1 of the project was approved by the Executive Committee of the National Economic Council (Ecnec) on March 28, 2014 at a cost of Rs486,093 million. Later, a contract for relocation of Karakoram Highway (KKH)-01 was awarded to China Civil Engineering Construction Corporation on March 16, 2015 at a contract price of Rs14,538.8 million against PC-1 provision of Rs13,496.9 million with completion period of 564 days i.e. up to February 20, 2017. However, the construction of KKH-01, which was to be used as a bypass for diverted traffic of original KKH to avoid interference in the construction activities of the main works, couldn’t be completed till date.

Meanwhile, the contract for civil works was awarded to China Gezhouba Group Co. Ltd. (CGGC) at a contract price of Rs115,003.461 million on March 08, 2017 with planned completion date of January 22, 2023. In order to avoid interference of open excavation work of KKH-01 with construction activities of the main work, avoid damages of main contractor’s camp and divert public traffic of the old KKH, a variation order was issued for re-alignment of the relocated KKH-01 by including seven tunnels and three bridges costing Rs29,413.545 million (equal to 202 per cent of contract price).

The audit officials held that as the amount of variation order was more than the original contract price and scope of work was also changed from open-cut to tunnels and bridges, therefore, variation order of huge amount was issued without obtaining competitive rates as required under the PPRA rules.

The management explained that the variation in contract was allowed because of non-possession of land, geological conditions and interference with the main works. Audit officials contended that as per PC-I, cost estimate of relocation of entire KKH was Rs13,496.90 million, of which an amount of Rs4,025.40 million was allocated for the construction of KKH-01. The contract for construction of only KKH-01 was awarded at Rs14,538.8 million and subsequently a variation order amounting to Rs29,413.5 million for redesigned work was issued to the contractor without competitive process.

It is evident that the management allowed deployment of contractor without possession of land and detailed geological survey.

This resulted in unfairness of procurement process and violation of provisions of PC-1. Committee Member Riaz Fatyana said that his PC-1 should have been revised again. “This is a serious issue, make it a test case,” he said.

Chairman Wapda said he was a professional engineer and was appointed to this position through an open competitive process. Committee member Malik Amir Dogar said: “We do not doubt his ability, we should also be shown a way forward. How did the Rs4 billion project reach Rs36 billion?” The official of the Ministry of Water Resources said that in the wake of China-Pakistan Economic Corridor (CPEC), a change in the design had become necessary. The secretary for Water Resources said an inquiry had been ordered. The chairman PAC said if there was no land, then how did the project start? The secretary said the Khyber Pakhtunkhwa government was repeatedly asked to resolve the land issue.

Subsequently, the PAC sent the matter of the Rs29 billion increase in the project to the National Accountability Bureau (NAB) for investigation.

The Neelum-Jhelum hydropower project also came under discussion in the PAC as Senator Shibli Faraz inquired regarding the current status of the project. The official of the Ministry of Water Resources told the committee that the project was lying closed due to tunnel collapse.

Later, talking to the media, Chairman PAC Junaid Akbar Khan said the situation of every project seemed to be getting worse, adding: “Those whose performance will not be good will be called to every meeting”. He said the committee has recovered over Rs118 billion in two months.