‘Incomplete Lyari Expressway caused Rs7.5 billion loss’

ISLAMABAD: A sub-committee of the Public Accounts Committee was informed Tuesday that the national exchequer suffered a loss of Rs7.5 billion due to awarding the contract of Lyari Expressway to the Frontier Works Organisation without bidding and due to increase in the cost of the project which remains incomplete even after 11 years.
The audit officials told the sub-committee that Rs4.08 billion contract for Lyari Expressway was awarded to FWO without tendering and because of delays and rise in the cost of the project the exchequer suffered a loss of Rs7.5 billion.
Syed Naveed Qamar chaired the meeting of the sub-committee in which the audit paras related to communication ministry for the financial year 2003-04 were examined.The audit officials told the panel that the contract for Lyari Expressway, Karachi was awarded for Rs4.892 billion to M/s FWO without tendering, on negotiation basis, at 9.98 percent above the engineers’ estimated cost in the May 2002, whereas the Karachi Northern bypass project (package-11) was awarded for Rs645.17 million through open bidding to M/s ECI in the same month at 15.78 percent below the engineers’ estimated cost. Deviation from codal provisions regarding tendering procedure and acceptance of higher rates during negotiations caused unjustified expenditure of Rs1.142 billion.
Replying to the audit objections, acting secretary ministry of communication Shahid Tarar said PPRA rules did not exist in 2002 and that was the reason that the contract was given to FWO and it was piece of 5 km road and its completion is the responsibility of the provincial government, which has not done its job.
Syed Naveed Qamar observed that it was a project of the NHA and it was their responsibility to complete it.
Shahid Tarar said it was also the responsibility of the provincial government, which could not clear the area from encroachers under the bridge.Defending the contract Shahid Tarar said FWO is a national institution, which always comes forward in difficult times.
Syed Naveed Qamar regretted that the project is still incomplete and its cost of production is increasing.The sub-committee sought detailed briefing from the communication ministry on the project on May 18.
Examining another audit para, the audit officials told the sub-committee that NHA paid Rs14.52 million as compensation to the contractor on behalf of PEC. NHA awarded a project to M/s Taisei, which did not produce registration certificate from Pakistan Engineering Council nor did it get itself registered after the award of work. Consequently PEC filed a writ petition against the company and the work remained suspended on court order.The court ordered payment of Rs14.52 million to the company but instead of PEC, NHA made the payment. The committee directed the NHA to recover Rs14.52 million from the PEC.