ISLAMABAD, May 12: President Gen Pervez Musharraf has directed the National Highway Authority to award the contract of Peshawar-Islamabad Motorway project (M-I) afresh through open tender, Dawn learnt on authority.

Sources in the Ministry of Communications said that the NHA had also been asked to submit within two months the estimates of expenditure on the work already completed by the Turkish firm Bayindar. The project that was originally scheduled to be completed in 1997-98, now seemed going beyond 2006.

The directive also entailed that the amount of Rs13 billion agreed between a consortium of local contractors and the NHA under a memorandum of understanding should be treated as a base engineering estimate and open tender for the contract to be floated.

The president, said the sources, wanted the process to be open and transparent so that nobody could create doubts about the credibility of the government through allegations of kickbacks.

About two months ago, the government had signed a memorandum of understanding (MoU) with private local contractors led by SKB to complete the remaining work on the M-1 project worth Rs13 billion through negotiations and without following any tender process. The SKB and Husnain Corporation are now in possession of the site.

This was seen by the contractors community as a shift from the policy of open bidding and award of mega contracts through negotiations. The NHA was separately seeking quotations from the Frontier Works Organization whether it could compete the rates agreed to with the SKB and Husnain Corporation.

Under the MoU signed, the contractors were required to complete the project within three or four years, depending on the cash flow from the government. Interestingly, the Turkish contractor was “expelled” from the site on May 7 last year on the ground that it had failed to complete two sections of M-1 by March 23, 2001.

The contractor had promised that it would complete the two sections — Islamabad to Burhan and Peshawar to Rushaki — by August 14, 2001, while the entire project would be completed by December 2002.

Those who had watched the contract very closely since 1993, when the Turkish company first arrived in Pakistan, apprehended that the project might become a pitfall for the higher government functionaries, as the National Accountability Bureau of the present government had also evaluated the possibility of indicting former prime minister Nawaz Sharif for “reviving” the contract of Turkish contractor as it had been terminated by the PPP government.

The Turkish contractor was originally awarded the contract on March 18, 1993, which was cancelled by the PPP government in January 1994.

The reference, however, was not filed due to diplomatic reasons, fearing that Pakistan’s traditional ties with Turkey might go sour, as the then Turkish president was taking personal interest in the project.

The signing of MoU, sources said, also strengthened the case of the Turkish contractor who was of the view that since he had been “expelled” he was not in a position to pay.

Inept handling of the project has risen the cost of the project manifold. Originally, it was to be completed at a cost of Rs16 billion.

When the contract was revived it was announced that 156km long road would be completed at a cost of Rs22 billion.

According to Maj-Gen Farrukh Javed, the NHA Chairman, the total cost would have gone to Rs45 billion had the Turkish contractor been allowed to complete the project.

He believed that the MoU signed with local contractors had brought down the cost from Rs45 billion to Rs28.5 billion and could be reduced further to Rs22 billion provided the disputed amount of Rs6 billion was recovered from Turkish firm Bayindar.