Project delays and cost overruns

Published April 13, 2015
Had steps been taken to complete a new Islamabad airport in time, a large expenditure could have been saved. —Dawn/File
Had steps been taken to complete a new Islamabad airport in time, a large expenditure could have been saved. —Dawn/File

The Civil Aviation Authority has just completed the renovation and expansion of the Benazir Bhutto International Airport — expected to be inaugurated this month — at an estimated cost of Rs399m.

Had steps been taken to complete a new Islamabad airport in time, this expenditure could have been saved. Similarly, enormous cost overruns of the new under-construction airport could have been avoided.

The plan to construct a new airport for Islamabad was conceived in the late 1980s, to deal with the problem of increased passenger load at the Benazir Bhutto International Airport (BBIA). The project was, however, announced in January 2005 after a 10-year delay due to political changes.


The construction of the new Islamabad airport began in April 2007 and it was scheduled to be completed by 2010 at an initially estimated cost of Rs37bn. Now, its completion is not expected before December 2016 and its construction cost may escalate to Rs95bn


Its construction began in April 2007 and it was scheduled to be completed by 2010 at an initially estimated cost of Rs37bn. Now, the CAA officials say, the airport’s completion is not expected before December 2016 and its construction cost may escalate to Rs95bn.

Time management is an essential feature of any successful project as the inability to follow set timelines commonly lead to soaring cost overruns. This is what happened with the BBIA.

The inordinate delay and the out-of-proportion escalation in the cost are enough to prove that the project is leaking cash, time and resources at a substantial speed. It is pertinent to mention here that according to a report by the Auditor General for Pakistan, there has been Rs30.37bn worth of irregularities in the new Islamabad airport project.

The minister of state for parliamentary affairs, Sheikh Aftab Ahmed, recently informed the National Assembly that irregularities had been identified in the new airport and a committee constituted in this regard had submitted its report. The case is now with the Federal Investigation Agency (FIA), and it would be referred to the National Accountability Bureau (NAB) after the completion of the inquiry.

The minister also informed the National Assembly that the new airport would be completed by 2016. Replying to a question, he said that according to the original PC-I, the estimated cost of the project was Rs37bn. However, it had been revised to Rs94.893bn as the project was redesigned, given that it initially had a small runway.

The approval for the revised PC-I is under process. Ahmed said there are many reasons for the delay, including the cost for the additional acquisition of land for the second runway, the dollar’s appreciation, cost-escalation owing to execution delays and an increase in the cost of consultancy services.

The delay exposes the inefficiency of the project’s managers, which has resulted in a great drain on taxpayers’ money.

The airport in the capital reflects the face of a country and plays a significant role in promoting its image.

The findings of the inquiry conducted by Lt Gen (retd) Shahid Niaz, submitted before a three-judge bench headed by then-Chief Justice Iftikhar Muhammad Chaudhry, is an eye opener.

The report reads: “Arbitrary decisions taken by the CAA at various stages of the project have led to cost-escalation and indirectly affected the scheduled working of the overall design process. This has further delayed the process of awarding of contracts and the implementation of work. Various committees and oversight bodies constituted at different stages recommended major changes in the scope of the project, which were then approved by the CAA Board”.

The inquiry report, prepared in January 2013, further noted that the CAA’s planning and development department was unable to deliver due to its lack of expertise in handling a project of this magnitude.

According to aviation experts, the project may suffer further delays and cross the deadline given by the CAA. It is time for the authority to take necessary steps to ensure that the airport is completed by December 2016, and that further delays do not burden the project with further cost overruns.

Published in Dawn, Economic & Business, April 13th, 2015

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