September 5, 2002	Thursday	Jamadi-us-Saani26,1423

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ISLAMABAD, Sept 4: The National Highway Authority (NHA) is facing litigation claims and penalties to the tune of Rs35.5 billion which if not contested properly would have to be paid out of the national exchequer.

When contacted, NHA Chairman Maj-Gen Furrukh Javed confirmed to Dawn that the authority was currently facing liabilities of Rs35.5 billion in the form of litigation claims.

Most of these claims remain about disputes over contractual obligations, non-payment of dues to private construction firms on time and other related issues.

He said the STFA — a Turkish construction firm — had claimed around Rs3.6 billion against the NHA while Bayinder claimed Rs1.7 billion, Sambo Rs1.4 billion and Put Sarajevo Rs500 million, besides a number of other companies.

When asked as to why Put Sarajevo was being given a Rs300 million fresh contract without any tender, he said the NHA was in negotiations with the firm to award the contract for 62km Lahore-Okara section of the National Highway, provided it withdrew Rs500 million damages claim.

The general confirmed that the cost of the four-lane Islamabad- Murree carriageway had increased from Rs2.5 billion to Rs4.8 billion mainly because of escalation cost and slight changes in the design and route of the project.

The Islamabad-Murree Road that is part of a multi-million dollar four-lane carriageway up to Muzaffarabad in Azad Kashmir was based on a study of the NESPAK that 90 per cent of the 7,000 vehicular traffic per day would divert to the proposed road by 2006.

The contract of the project has also been awarded to a local firm Hakas without any tender and approval of its revised PC-I by the Planning Commission or the Executive Committee of the National Economic Council (Ecnec).

The general defended the decision of awarding the contract without open tendering and before approval of the revised PC-1. Under the pact with a former Saudi contractor — Ditco, the project had to be given to Hakas.

He did not agree that the Planning Commission or Ecnec could reject the project cost estimates and design, and hence, he said, there was no chance of litigation with Hakas or contract termination.

The project was shelved by the NHA council in 1994 and its PC-1 was also shelved by the executive board of the authority. The project was revived in August 1999 and till then the PC-1 cost was revised to Rs4.8 billion instead of Rs2.5 billion.

The revised PC-1 has yet to be formally cleared by the commission and Ecnec, he confirmed.

The construction cost of the project increased from Rs2.122 billion to Rs2.338 billion primarily because of change in route, that resulted in increased length of the road by 3.5kms.

The price escalation amounted to Rs933 million while foreign currency exchange rate resulted in Rs704 million.

The land cost and shifting of utilities cost increased from Rs210 million to Rs402 million. An additional cost of Rs115 million was added owing to inclusion of environment issues, including silt trapping structures of two streams.

Another fresh cost of Rs200 million was also added to the project cost for provision of fence alongside the road that was not part of original plan. The supervision cost was also increased by Rs83 million.