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Peshawar BRT construction firm wins three mega projects of federal capital

By Tariq Butt
July 13, 2020

ISLAMABAD: A construction firm, which is building the Peshawar Bus Rapid Transit (BRT) that is facing many delays, has won the contracts of three mega projects of the federal capital by submitting the lowest bids, much below the estimated cost.

The Maqbool Associates-Calsons joint venture has been awarded by the Capital Development Authority (CDA) the construction of the Rawal Dam interchange (Rs1.2b, 11pc less than the estimated cost); expansion of Korang Bridge (Rs628.5m, 17pc less than the estimated cost) and the PWD Underpass (Rs420m, 19pc less than the estimated cost). These constructions will cost Rs2.248b.

The official record shows that in its case against Shahbaz Sharif in the Ashiana Housing Scheme, the National Accountability Bureau (NAB) has been betting on Calsons. The NAB has portrayed Calsons as a well-meaning firm that had won a contract on merit to develop the Ashiana Iqbal Housing Scheme, but was wronged by the Shahbaz Sharif administration. The then chief minister was alleged to have secured Calsons’ Ashiana contract cancelled in order to give it to a choice party.

Officials said 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 tenure of the last Pakistan People’s Party (PPP) government in 2008-2013 and the capital's residents faced untold hardships. The project was finally completed by the subsequent government.

According to officials, 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 later became 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 Punjab Anti-Corruption Establishment (ACE). Consequently, the Ashiana contract awarded to Calsons was also cancelled.

The cancellation was done by the PLDC Board in September 2013. Calsons approached the Lahore High Court (LHC) 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 was accused of wrongdoings in the Orange Line train project. Officials said that Calsons was accused of violations of contract, leading to the termination of its joint venture with Maqbool Associates. The company was blacklisted and a penalty of Rs902 million was imposed on it by the Shahbaz Sharif administration.

According to officials, the Maqbool-Calsons joint venture 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-Calsons joint venture remained poor from the outset, and added that 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. Resultantly, the provincial government terminated the contract and forfeited and en-cashed its bank guarantee of Rs903.289 million, the record showed.

Officials said that Punjab administration, after terminating the contract, charged Maqbool-Calsons with violations, including refusal to hand over material (reinforcement bars, crush gravel, pre-stressing wire) worth Rs400 million, which had been purchased with the money advanced by the LDA. On the LDA's complaint, the ACE lodged a first information report (FIR) with the police for building shorter piles. The Punjab government imposed a five-year ban on the contractors from participating in LDA tenders under Public Procurement Regulatory Authority rules. It also sent a reference to the Pakistan Engineering Council seeking the blacklisting of the firm.

When contacted, Calson owner Chaudhry Amir Latif told The News that they would complete all the three projects of the federal capital within the stipulated time. He said the company won the contracts for being the lowest bidders.

To a question, he said that the matters relating to the Ashiana scheme have been settled and closed. Amir Latif said the issues pertaining to the Orange Line train project including the forfeiture of their bank guarantee were being looked into by arbitrators as provided in the contract. The arbitration, which is in final stages, will sort out the contention between the company and the LDA, he said.

To another question, the Calson owner said that they have concluded the work of the Peshawar BRT assigned to them and have been issued the completion certificate.

He said the delay in the completion of the given work was not caused by them but it occurred due to frequent changes in the design by the consultant, which consumed almost a year. In addition, he said, the land acquisition was also a major issue. He pointed out that the caretaker government had also been in place after the award of contract to them, suggesting that this interregnum also affected the pace of work.

Amir Latif said that the government authorities have taken over the completed work of the BRT and were doing the trial run of buses. He said the COVID-19 pandemic has also been a major reason behind the non-start of the full-fledged start of the bus service.