ISLAMABAD, July 28: Massive corruption and mismanagement has been detected in the National Highways Authority (NHA), especially in awarding contracts in mega projects, says a report.

A vigilance cell set up to detect corruption in the ministry of communications and its attached departments has come out with a detailed report on mismanagement, embezzlements and misappropriation of funds in the National Highway Authority, an announcement by the ministry said on Sunday.

The report has been presented to the Federal Minister for Communications, Ahmad Ali, by the director-general vigilance Brig Zafar Alam Malik and director vigilance (NHA) Col Misbahur Rehman Khan.

“The minister is faced with a major dilemma as how to control the unbridled NHA. At present, he is considering ways to initiate necessary action for an operation cleanup in the department,” the announcement added.

The vigilance cell has reported massive malpractice, embezzlements in the NHA, especially in the award of contract of mega highway projects, like the Islamabad-Peshawar Motorway Project (M-1), Pindi Bhattian-Faisalabad Motorway Project (M-3), Karachi Northern Bypass and the Lyari Expressway Project.

The NHA gave the contractor of M-3 Rs2 billion worth of machinery in the absence of any NHA responsible officer at the site which was later showed as equivalent to Rs1 billion.

Still later, the same contractor sought a concession of Rs300 million, claiming that the machinery required expensive repairs while in the meantime the machinery was rented out to other private contractors for construction purposes.

The Rs7.5 billion M-3 project, including machinery of worth Rs2 billion, was supposed to be completed in one-and-a-half years.

The project, which was awarded to the contractor to be completed on a build operate and transfer (BOT) basis, was converted to a government-funded public development programme due to certain doubtful negotiations when the contractor defaulted.

The contractor even did not share the revenue generated from the service road of M-3 while under the agreement with the NHA he was bound to do so. Later, the present NHA management on a single bid basis awarded the contract to the same contractor. The project was being executed by the contractor without any proper qualified manpower — civil engineers — in violation of standing operating procedures. When the project director, Salim Mubashir, on deputation from Nespak, objected and took a stand on the wrongdoings, he was sent back.

The contract of M-1 was given to a favourite contractor on a single bid basis at a Rs12.5 billion bid. Interestingly, the NHA management signed a memorandum of understanding with the contractor. When President Pervez Musharraf objected to the matter, the cost of the project was reduced to Rs11.5 billion, but even then the NHA management retained the same contractor.

After termination of the Turkish firm, Bayinder Construction’s contract, the NHA management projected a cost of Rs8 billion for the completion of the remaining M-1 project. Despite the huge cost of Rs11.5 billion, the NHA was likely to sign another contract for the construction of a bridge over the Indus on M-1 in Attock since the present contractor lacked the technical know-how to construct the bridge.

In disregard to the finance ministry directives, the NHA accepted insurance guarantees of the contractor for the mega projects, while the government rules stated that no mega project could be awarded to a contractor without bank guarantees. The directive was issued after Bayinder, a contractor of M-1, abandoned the project and the government incurred a loss of Rs12 billion.

It is important to mention that the NHA management spent around Rs20 billion on M-1, yet there is no proper system of checks and balances in the organization.

Earlier, the Rs375 million Lahore-Okara bypass project, carrying a number of frauds, embezzlements, money-oriented games, was awarded to PUT Saragevo Company by the NHA without any tendering procedures.

The total cost of the Lyari Expressway project is Rs5081 million, including a provision of Rs2273 million for the reinforced earth which constitutes 44.74 per cent of the total project. The unit cost of the project worked out to be Rs308 million per km, which is even on the higher side, considering that even the cost of the entire length of 350km was less than Rs110 million per km.

The purpose of the reinforced earth-filling, which is 5 meters to 11 meters, is stated to be aimed at providing protection to the road against possible floods. The basis for adoption of 5 to 11 meters high embankment gave a rise to question the credibility of the NHA management, because keeping the elevation of the highest flood level and that of the road surface was unrealistic/unreasonable for making such a high embankment.