Rs. 470 Billion of Irregularities Found in NHA Road Projects

According to the Auditor General of Pakistan (AGP), several projects under the China-Pakistan Economic Corridor (CPEC) have also been found to contain discrepancies. There have been several irregularities amounting to billions of rupees in several road projects awarded by the National Highway Authority (NHA).

Report on NHA’s Accounts

52 cases were found on the report of NHA’s accounts for 2016-17. These cases involved inconsistencies worth Rs 470 billion, involving:

  • Violations of Public Procurement Regulatory Authority (PPRA) rules
  • Irregular award of contracts
  • Unauthorized expenditures

Causes of Discrepancies

The auditors found irregularities in 102 cases finding weaknesses in internal controls leading to losses amounting to Rs 120 billion.

On the other hand, discrepancies in seven cases rooted from mismanagement and inefficient utilization of funds that led to a loss of Rs 7billion to the national exchequer.

According to the report, the downward price trend in bitumen prices and high-speed diesel after 2014 has not been factored in. The proof of this can be found “from the unsolicited bid of Frontier Works Organisation (FWO) dated Sept 30, 2016, of Rs 132.6 billion for the project which was not accepted by NHA being against PPRA rules.”

The Sukkur-Multan motorway contract under the China State Construction Engineering Corporation (CSCEC) was also found to contain irregularities by the auditors.

CSCEC’s quoted rate of Rs 240.158 billion was much higher than the PC-1 rates offered by the same contractor.

Irregularities in the approval of construction for Thalian on M2 Motorway to New Islamabad International Airport were also discovered.

The Executive Committee of National Economic Council (ECNEC) approved the Rs 1.918 billion contract which was marked as under process since December 2011. Habib Construction Service won this contract in November 2015 and continued work on the project. When the audit put the contract under scrutiny, they found out that the lowest bid was accepted.

The report formed by AGP also said that the contract of main link road construction for New Islamabad International Airport was also won by National Logistic Cell, although the project came under the reduced price agreement of the M2 Motorway which FWO had already won.

The Karachi-Lahore Motorway Project

One major project mentioned in the NHA report was the Rs 148 billion project for the construction of the 230km Karachi-Lahore Motorway.

Its construction was done under the joint collaboration of Zahid Khan & Brothers (ZKB) and China Railway 20 Bureau Corporation (CR20G) on Dec 8, 2015.

The AGP observed that the project would have rendered successful had it been “divided into multi[ple] packages” and that the “Very tight condition of experience for pre-qualification reduced the quantum of response.”

The report stated that despite the disqualification of ZKB and the China Gezhouba Group Company in accordance with the pre-qualification process, ZKB was allowed to form a JV with CR20G against the regulations of PPRA.

During its bidding stage, the bid was supposed to be declared “non-responsive” as the lowest bidder did not provide a bid security of Rs 500 million. The AGP, however, noted this was not NHA’s fault.

Another violation of the PPRA rules was observed as negotiations between the NHA and the contractor led to the JV bid being reduced from Rs 159.784 billion to Rs 148.654 billion. The report further stated that

 It is evident that the work was awarded irregularly. The issue has also been highlighted by Transparency International – had the work been re-tendered, and in packages, it would have been awarded on much lesser rates.

Via Dawn


  • Why am I not surprised? oh yes, because Pakistan aik bheti ganga hay wahan her koi us main hath dhota hay lolzz

  • This article and audit report is an example of how even the most transparent people are labelled as corrupt. I am dead sure no one knows environment in NHA, how they resist political as well as military pressure. Media and we as public do level best to label them as corrupt.

    Have you ever heard about threats they receive, how serving military officers treat them if a project isn’t awarded to them?

    A few points:

    1- Formation of JV isn’t irregularity under PPRA rules.

    2- If a bidder isn’t providing a bid security how come AGP is mentioning it in a report as irregularity ? Report is audit of NHA then how come this is even mentioned? Effort to have something in the report ? This should have been appreciated instead. Ahsan kya ha mentioning that it wasn’t NHA fault..Sirf safay kalay karnay hain? This is how Auditors first try to “gain” knowledge of area and then put it on paper as per their “understanding”.

    3- Negotiation by NHA and bidder to further reduce the cost is irregularity ? This is so funny seriously. What made you think that if work was done in small packages was going to reduce the cost ? Who is more experienced, NHA, AGP or Transparency in cost reduction exercises? Instead of appreciating them we are labeling them as corrupt.

    4- If a project’s cost is Rs. 200 billion and there is any irregularity (I know there AGP has aggsegrated to every possible limit) then should we say that Rs. 200 billion were lost or damage to exchequer was Rs. 200 billion , certainly NO.

    This is one clear example how auditors do “safay kalay karna” to show off what they have found, they couldn’t use this word, they knew it and therefore used “irregularities” instead.

    Clear example of copy-paste, mirchi masala, without even realizing once how demotivating this will be for those who earn their halal roti working for this country doing their every best to save funds.


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