ISLAMABAD: The Islamabad High Court (IHC) has directed the federal government to release all pending payments to a local construction company working on various development projects in Afghanistan -- under the Prime Minister’s $500 million Assistance Package for Reconstruction and Rehabilitation — within 15 days.

Justice Noorul Haq N. Qureshi, in a judgment issued on Saturday, directed that all payments owed by the Planning and Development Division in respect of ongoing projects in Afghanistan be released to M/s Airrs Associates (Pvt) Ltd in a fortnight.

Ministries wrangle over violations of procedure

The firm in question has been working on development projects in Afghanistan under the PM’s Afghanistan Programme since 2008 and has so far completed 97 per cent of the work on the Rehman Baba Hostel for 1,000 students and 83 per cent of construction on the Naeb Aminullah Khan Logari Hospital. However, it was forced to stop work due to the non-release of funds by the government.

Court told delays in project completion solely due to want of unreleased funds

Prime Minister Nawaz Sharif, during a visit to Kabul on Nov 30, 2013, had announced that he wanted to enhance Pakistan’s commitment of assistance for the reconstruction and socio-economic development of Afghanistan from $385 million to $500 million.

Under Pakistan’s new assistance package, 11 projects were undertaken, of which eight have been completed. These include hospitals and universities in different parts of the country, as well as three projects — nearly completed — that have been suspended for want of funds.

In the petition, the firm stated that they were selected as the sub-contractors for projects by the Frontier Works Organisation through a competitive bidding process and work on these projects had stopped due to non-payments by the government.

The petitioners maintained that the contracts, to be executed in Afghanistan, were awarded in Pakistani Rupees and were treated as local contracts. After receiving payment from the government of Pakistan, the contractor was supposed to buy US Dollars from the open market and transfer them to Afghanistan to meet onsite project expenses. However, due to the slide in the value of the Rupee, the prime minister approved a summary on April 9, 2010 for the payment of foreign currency loss to the contractors and transformed the contract agreements from local to foreign currency and the necessary amendments were made.

An external audit in August 2013 made eight observations, for which comprehensive replies were submitted, but still the payments were withheld.

The petitioner also presented a number of letters written by the Afghan authorities to the government of Pakistan in the court. The letters, from Logar Province Governor Alhaj Niaz Mohammad Amiree, Deputy Political Affairs Minister Abdul Malek Sediqi and Minister for Public Health Dr Suraya Dalil, requested the swift completion of pending projects.

Pakistan’s ambassador to Afghanistan, Syed Abrar Hussain, had said in a letter that Afghanistan was passing through a democratic transition and a new government would be installed soon.

“It will be of immense help if we may complete the projects within next few months.” The ambassador pointed out that the projects pending due to a lack of funds included the Torkham-Jalalabad Additional Carriageway, the Rehman Baba School Hostel, Jinnah Hospital, Amanullah Logari Hospital and Nishtar Kidney Centre.

Former Accountant General of Pakistan Revenue (AGPR) Tahir Mehmood last year forwarded three references to the National Accountability Bureau (NAB) against finance secretary Waqar Masood. One of the references was over the award of this contract to M/s Airrs.

AGPR Mehmood had also sent references against finance secretary Waqar Masood for the release of Rs317 billion to the oil marketing companies in a dubious manner. Another reference for releasing billion of rupees to M/s Airrs, against procurement rules, for the construction of a hospital and hostel in Afghanistan has also been forwarded to NAB by the AGPR. The third reference the AGPR sent to NAB dealt with the procurement of polio vaccines.

Published in Dawn, July 20th, 2014