MUZAFFARABAD: The Earthquake Reconstruction and Rehabilitation Authority (Erra) made an additional payment of Rs62.8 million to a contractor without the due process of law.

Lately, AJK’s State Earthquake Reconstruction and Rehabilitation Agency (Serra) has asked Erra to recover the “unlawfully released” public money from the contactor.

According to documents and background interviews, a Rs344.225 million contract for the construction of 10 basic health units, including 28 residential units, in district Poonch was awarded to M/S Shoukat Khan & Co under the ‘Earthquake Emergency Assistance Project’ (Eeap) in July 2008.

The execution of the foreign-funded Eeap began in 2008 and was financially closed in June 2011.

On the completion of the contract, Shoukat Khan submitted 18 claims of Rs303.034 million which were rejected by the consultant - M/S EA Consulting.

However, Eeap chief engineer got an adjudicator appointed from the Pakistan Engineering Council (PEC) for the settlement of the dispute. The adjudicator gave his decision in July 2013, accepting one claim worth Rs27 million. Regarding another claim worth Rs43 million, he said it could be paid if the consultant verified it. All other claims, amounting to Rs233 million, were rejected by the adjudicator.

However, Eeap chief engineer again approached the PEC against the adjudicator’s decision for appointment of an arbitrator. In the meanwhile, in September 2013, Erra set up a committee to ‘amicably’ resolve the issue.

However, Eeap was not given representation in the committee notwithstanding the fact that the contract agreement was signed by Eeap chief engineer on behalf of the AJK health department.

A spokesman for Erra said the chief engineer Eeap was included in the committee later. The committee decided that the contractor should be given Rs70.169 million. However, when Eeap chief engineer was asked in January 2014 to make the payment, the then secretary Serra Sardar Rahim Khan refused to implement the “arbitrary direction.”

In October 2014, the PEC appointed an arbitrator who asked both the parties to give their claims so that he could initiate proper hearing from January 15.

Around the same time, Erra established an ‘Eeap Closure Cell’ at its headquarters, deciding that the cell would take up all disputes pending with the courts regarding Eeap with assistance from Erra’s legal wing.

On February 22, the arbitrator announced an award of Rs62.8 million in favour of the contractor in a decision which Serra alleges was a “clear-cut legal misconduct” for having been given on the basis of photocopies (of documents) without giving opportunity to Eeap for arguments and testimonies.

While the contractor approached the additional district and sessions judge Muzaffarabad on March 4, Erra paid him Rs62.8 million on March 13.

“I wonder why Erra has acted in a rushed manner to make payment to the contractor,” said a senior official at the AJK law department.

Erra spokesman Bilal Thaheem said Erra had found the award in the best interest of the department and there was no legal misconduct observed in it from any angle. However, to the question that why payment was made in less than three weeks after the announcement of award and without obtaining the rule of the court, he replied that Erra owed Rs81.22 million to the contractor in connection with two other projects.

“Even if the decision received from the court is contrarily to the award, the payment of 62.8 million can be adjusted with Rs81.22 million due to the contractor,” he said.

Published in Dawn, July 7th, 2015

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