ISLAMABAD, March 12: The Auditor General of Pakistan report 2002-03 has unearthed serious financial irregularities to the tune of Rs7.7 billion in the accounts of the National Highway Authority (NHA) during the tenure of Maj-Gen Farrukh Javed as chairman of the organization.

The report placed before the National Assembly highlighted 21 audit objections, including violation of tendering procedures, lack of accountability of consultants, violation of agreement clauses, incorrect payment in foreign currency and poor financial discipline.

The report also objected to awarding of some mega project contracts by the authority without calling tenders through wide publicity and, thus, denying itself the opportunity to achieve competitive rates.

Similarly, mega projects were executed through appointment of consultants who failed to ensure proper supervision and quality control. Citing a case, the report said cellulose fibre, a component in asphalt base course mix, was not used, still the consultant authorized payment of Rs644 million to the contractors.

It also pointed out cases where contractors did not fulfil contractual obligations like employing trainee engineers and payment of insurance premium, but the authority neither deduct nor recover payments on these accounts. The NHA also failed to draw its financial statements for the financial year under review since data was in scattered form and accounts were not prepared as advised by the finance division. Similarly, the authority failed to hold its council meeting to approve its budget since March 1999, when convening the meeting once a year was mandatory under the authority’s rules.

The NHA could not recover Rs393 million as cost for its failure to get insured three projects namely additional carriageway Moro-Kotri Kabir Section (N-5), additional carriageway Rahim Yar Khan-Trinda Mohammad Pannah, and Makran coastal highway.

The authority made payment to different persons on account of damage to houses during land acquisition for Islamabad- Muzaffarabad dual carriageway project without adhering to contract, incurring a loss of Rs10.9 million. It also overpaid Rs9.85 million in violation of contract provisions by paying price escalation on high speed diesel on rates higher than those notified by the Pakistan State Oil while undertaking Multan-Mian Channu additional carriageway project.

The audit report also objected to preferential treatment given to the Frontier Works Organization (FWO), and said contract should be awarded on competitive basis under normal rules. In violation of rules, the authority awarded work contract of Rs3.2 billion for additional carriageway Rahim Yar Khan-Tarinda Mohammad Pannah project without calling open and transparent tenders.