ISLAMABAD, May 28: The National Highway Authority (NHA) has requested Prime Minister Shaukat Aziz to arrange amicable settlement with Turkish firm Bayinder, former contractors of Islamabad-Peshawar Motorway project, during his forthcoming visit to Turkey. This was stated by chairman NHA Maj Gen Farrukh Javed before the Public Accounts Committee (PAC) at the parliament house here on Saturday.

Replying to audit objections before the PAC, he said NHA and Bayinder were contesting cases before different arbitration and settlement tribunals in the USA, France and Turkey. He said the claims involved pertained to Islamabad-Peshawar Motorway project and totalled up about Rs20 billion.

The NHA chairman said the authority had prepared a brief for the PM and expected that the PM would ask the Turkish government to intervene and help resolve these outstanding issues. He said it was a fact that certain benefits and facilities were given to the Turkish contractor.

The PAC settled an issue relating to excess payment of Rs1.53 billion to the Daewoo for the Lahore-Islamabad Motorway project after accepting the plea of NHA and rejecting the arguments of the Auditor General’s office.

Auditor General of Pakistan Younas Khan informed the PAC that the Daewoo was given mark-up for additional financing. He said the NHA and its engineers did not ask the Korean company not to charge escalation cost and thereby gave an indirect benefit to the Daewoo.

The escalation cost is paid on work done and not for bringing extra money to complete a project, said the Auditor General.

However, Maj Gen Farrukh said that the Authority’s decision to pay Rs1.53 billion to Daewoo was based on fears that NHA would lose the case if it was sent for arbitration. Secretary Communication Tariq Mehmood told the PAC that problems in the Lahore-Islamabad Motorway project crept in because of transitions in political leadership during the 1990s.

In a case relating to payment of another excess amount of Rs120 million, Maj Gen Farrukh said since the project was funded by the World Bank, the government’s financial rules were not applicable on it.

However, his contention was rejected by the PAC when Auditor General Younas Khan pointed out that even the World Bank rules did not allow double benefit to the contractors.

After Maj Gen Farrukh conceded that inquiry would be conducted in the matter, the PAC chairman, Malik Allahyar, directed the Authority to reconcile the case with the audit within one month.