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October 11, 2018

Who is Calsons, NAB’s best bet in Ashiana case?


October 11, 2018

ISLAMABAD: In its case against Shahbaz Shairf in the Ashiana housing scheme, the National Accountability Bureau (NAB) is betting on a construction company called Calsons (Chaudhry Latif and Sons), which in 2016 had entered into a plea bargain deal with the Bureau after confessing to irregularities in a separate matter and agreeing to return the money involved.

Calsons' history is full of troubles wherein the company was not only been blacklisted, but also nominated in police cases.

However, the NAB has consistently portrayed it as a well-meaning contractor who had won a contract on merit to develop the Ashiana Iqbal housing scheme, but was wronged by the Shahbaz Sharif administration. He is alleged to have had Calsons’s Ashiana contract cancelled in order to give it to a favoured party.

Before it arrested Shahbaz Sharif in the same Ashiana case, the NAB had detained Fawad Hasan Fawad, the former principal secretary to ex-PM Nawaz Sharif, and Ahad Cheema, former director-general of the Lahore Development Authority (LDA). These high profile arrests in Ashiana case make the Calsons all-important.

Official sources, speaking on condition of anonymity, said that Calsons came into prominence when it won the contract to remodel and widen the Kashmir Highway, a major artery of Islamabad. Because of delays, the project became a festering wound during the PPP’s last government tenure between 2008-2013 and the capital's residents faced untold miseries. The project was only completed after the PML-N came to power in 2013.

The sources said that the Calsons fell on the wrong side of the Punjab government under Shahbaz Sharif when, in 2013, the then chief minister received electronic evidence of the illegal award of the Ashiana contract to a joint venture involving Calsons by the Punjab Land Development Company (PLDC).

Shahbaz Sharif referred the case to a committee, led by the then Punjab secretary finance Tariq Bajwa, who is presently governor of the State Bank of Pakistan. The committee sought a further probe into the matter, following which Shahbaz Sharif referred the matter to the Anti-Corruption Establishment (ACE) Punjab. Consequently, the Ashiana contract awarded to Calsons was also cancelled.

The cancellation of the contract of (Latif and sons) was done by the PLDC Board in September 2013. The aggrieved contractor approached the Lahore High Court against the PLDC decision. The LHC ordered arbitration as per the contract between the two parties as a result, the contractor was awarded Rs5.9 million as compensation. Hence the first contract ended.

Later, in 2015, Calsons again fell on the wrong side of the Shahbaz Sharif government when it was accused of wrongdoings in the Orange Line urban train project. The sources said that Calsons was accused of violations of contract, leading to the termination of Calsons' joint venture with Maqbool Associates. The company was blacklisted and a penalty of Rs902 million was imposed on it by the Shahbaz Sharif administration.The details of Calsons' role in Orange line and the action taken by Punjab government make for revealing reading. According to the sources, the Maqbool-Calsons JV made a bid for Package II (Chauburji to Ali Town) of the Orange Line. The Punjab Mass Transit Authority (PMA) had entrusted the civil works of the project to the LDA. They said that the progress of work by the Maqbool-Calson JV remained very poor from the outset. The contractor did not pay heed to repeated verbal and written instructions of the LDA and failed to meet its obligations under various contractual clauses, the sources said.

The following delinquencies, shortcomings and defaults of Maqbool-Calsons were observed by the Punjab government: It failed to procure machinery and equipment in a timely manner; it failed to deploy technical staff with experience of similar works; it failed to provide and keep alive the validity of the performance guarantee; it failed to complete available works by their due date; it failed to maintain a rate of progress to comply with the designated completion date; it executed part of the works contrary to drawings (at two grids, it constructed 22 piled foundations of shorter-than-specified length), thus putting the safety of the works and the public at great risk; it failed to submit a work programme; it failed to maintain safety, security and environmental protection; it demonstrated its incapacity to perform and requested for the assignment of works to a third party.

For these reasons, the Shahbaz Sharif administration terminated the contract of the Maqbool-Calsons JV and forfeited and en-cashed its bank guarantee of Rs903.289 million, the sources said.

The sources said that Punjab administration, after terminating the contract, also charged Maqbool-Calsons of violations, including refusal to hand over material (reinforcement bars, crush gravel, pre-stressing wire) worth Rs400 million, which had been purchased with a money advanced by the LDA. On the LDA's complaint, the Anticorruption Establishment, Punjab lodged a first information report (FIR) with the police for committing the crime of building shorter piles.

The Shahbaz Sharif administration also imposed a five-year ban on the contractors from participating in LDA tenders under Public Procurement Regulatory Authority rules. The Shahbaz administration also sent a reference to the Pakistan Engineering Council seeking the blacklisting of Calsons and Maqbool Associates.

However, in 2017, according to a report, a court of law had given Calsons relief from being black-listed.

In a strange and intriguing twist, however, the the two partners were subsequently awarded the Rs86 billion contract to build the Peshawar metro project. The Peshawar High Court subsequently ordered the NAB to conduct an inquiry into the award of this contract, but the case was later stayed by the Supreme Court.

In 2016, Calsons owner Amir Latif was arrested by the NAB in a separate matter. He sought a plea bargain with the NAB under which he would return nearly Rs250 million. The request was accepted by the NAB executive board meeting, according to press reports.

These reports cited a NAB spokesperson as saying that the bureau was investigating a case against officials of the Pakistan Public Works Department. They included former superintending engineer Mian Masood Akhtar, ex-executive engineers Rana Saleem Akhtar and Ch Hassan Akhtar, former assistant executive engineer Pervaiz Iqbal Mahmood, and former sub-engineer Ejaz Hussain, as well as Amir Latif.

The News made repeated efforts to contact representatives of Calsons to ascertain their side of the story, but to no avail. Its version of events would be welcomed.

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