Senate body raps grant of key foreign-funded projects to non-performing firm

ISLAMABAD: The Senate Standing Committee on Economic Affairs Division (EAD) has taken strong exception to awarding multibillion-rupee foreign-funded projects to a non-performing company.

The Senate panel instructed that the matter be referred to the Federal Investigation Agency (FIA) or the National Accountability Bureau (NAB) for necessary legal action against the alleged violation of rules. The Senate committee met on Tuesday with Senator Saifullah Abro in the chair to review the Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Programme — Tranche 3, along with bilateral and multilateral development projects undertaken by the provincial government of Khyber Pakhtunkhwa in collaboration with UN agencies and international development partners. The committee was given a comprehensive briefing on the CAREC Tranche-3 project, which spans over 330 kilometres, covering Rajanpur–Dera Ghazi Khan–Dera Ismail Khan corridor. Although the project was approved in 2020, implementation has yet to commence. The total estimated cost is Rs. 85 billion, comprising a 121.5 km stretch from Rajanpur to DG Khan with six bypasses, and a 208.2 km section from DG Khan to DI Khan with five bypasses.

Officials from the National Highway Authority (NHA) informed the committee that a consultancy firm had been hired to finalise the bidding procedures for the project. In response, the Chairman directed the NHA to submit a detailed report outlining the standard procedure followed for hiring consultancy firms. While discussing the tendering of Lot-1 (Rajanpur–Jampur section, 58 km), it was disclosed that six companies had submitted bids, out of which five were technically qualified. The committee expressed serious concerns over the award of the contract to a company that had previously failed to complete the Multan—Lodhran project, valued at Rs. 6 billion. Senator Saifullah Abro questioned the rationale behind awarding a Rs. 172 billion project to a company with a history of non-performance. The chairman further ordered that strict action be taken against both the NHA and the Grievance Redressal Committee (GRC) for their alleged role in manipulating the contract award process. He instructed that the matter be referred to the Federal Investigation Agency (FIA) or the National Accountability Bureau (NAB) for necessary legal action against the reported violation of rules. The members voiced deep dissatisfaction over the NHA’s apparent negligence in awarding such a critical infrastructure project to a disqualified bidder. The chairman of the committee directed the NHA to submit the complete bidding details of Carec - II and Carec - III projects along with number of bidders participated (both qualified & disqualified) within two days. He also criticised the absence of the Secretary, M/o Communications, stating that the committee cannot operate effectively without the presence of senior representatives from key implementing departments. The officials were unable to brief and satisfy the committee.

Senator Abro highlighted that several complaints had been received regarding ADB funded road projects in the DI Khan region. He emphasised the consistent oversight of all projects sponsored by the World Bank and the Asian Development Bank. After a detailed discussion, the committee concluded that the NHA Board, in its meeting held on January 6, 2023, had determined that company was not eligible to apply for the project. Notably, the decision to terminate the company’s contract had already been taken by the NHA Board on December 23, 2022. The committee expressed concern over how the NHA had previously allowed the company to commence work on the CAREC-II project, despite having achieved only 8 per cent progress on a contract worth Rs. 6.8 billion. It further questioned how the same company was again favoured and deemed qualified for the CAREC-III project, valued at Rs. 172 billion.

It also discussed the implementation status of the recommendations made during its previous meetings regarding the EAD and its related department, the Power Division, including NTDC projects. After detailed deliberations, the committee recommended that the Power Division take action against the officials involved in awarding the contract for ADB 401B-2022 Lot-IIA (ACSR Bunting Conductor) to the third lowest bidder. The committee further recommended that Power Division provide a copy of the inquiry report prepared by the three-member Inquiry Committee, headed by Mr. Muhammad Ali, former Caretaker Federal Minister for Energy (Power Division), pertaining to the fact-finding investigation of the ADB 401B-2022 Lot-IIA tender. Additionally, the committee recommended the Power Division to write a letter to the Special Assistant to the Prime Minister on Power and share a copy of the letter with the committee. The Power Division was also directed to write to the FIA and NAB regarding the issuance of fake letters by the Engineering Development Board (EDB) in relation to the ADB 401B-2022 Lot-IIA (ACSR Bunting Conductor) tender.

The committee was also briefed by the Special Secretary, M/o Economic Affairs on projects undertaken in Khyber Pakhtunkhwa province with the support of multilateral, bilateral, and UN agencies. It was informed that the province had received additional funds to compensate for the increased costs of ongoing projects. Senator Haji Hidayatullah Khan remarked that many projects in Khyber Pakhtunkhwa remain incomplete and delayed due to inefficiencies within the executing departments. In response, provincial representatives stated that many projects are near completion and would require additional funds and time for completion. Various departmental officers from Khyber Pakhtunkhwa provided updates on the progress of development projects in regions including Balakot, Peshawar, Hazara, and Malakand. With respect to German funded initiatives, it was reported that a delay of approximately five months had occurred due to land acquisition issues. The Forest Department briefed the committee on the German-sponsored Billion Tree Plantation Programme, being implemented in various villages across Khyber Pakhtunkhwa, including Peshawar, Hazara, and Malakand. Officials highlighted the need for a robust Management Information System (MIS) to monitor and protect plantation sites, particularly in remote areas.