A multi-billion-rupee contract for projects of reconstruction and rehabilitation of the Multan International Airport (MIA) was unlawfully awarded to a private firm, the Auditor General of Pakistan revealed in a report.
The special audit report 2010-11 also pointed out irregularities of over Rs300 million in various projects of the airport.
According to the report, five other pre-qualified firms were invited for participation in bidding for the contract of projects in MIA. However, the government awarded the multi-billion contract to M/s Habib Rafiq Private Ltd with a 1.5% discount offered after the bid opening.
The unfair evaluation and pre-qualification resulted in an irregular award of contract amounting to Rs3.2 billion to M/s Habib Rafique Private Ltd without following rules, observed the auditors.
The Civil Aviation Authority (CAA) approved the PC-1 for MIA amounting to Rs1.84 billion in 2008. The authority is said to have awarded the contract to M/s Habib Rafique Private Ltd, whose owner belongs to the Multan Division.
Auditors stressed upon probing the irregular awarding of the contract to the firm as it did not fulfill the criteria mandatory for pre-qualification.
As per the criteria for pre-qualification of contractors, a minimum of 60 marks is required, whereas M/s Habib Rafique obtained only 59 marks but was declared successful through a ‘grace’ mark.
M/s Xinjiang Bexin Road and Bridge Construction-Matracon (JV), a company which unconditionally qualified for the contract, obtained 81.5 marks but its bid was not evaluated although its bid cost was almost equal to the one quoted by M/s Habib Rafique.
The departmental account committee said that favouritism had been established as the pre-qualification was not according to the given criteria, adding that the consultant did not have the prerogative to award additional marks, according to auditors.
The authority replied that the overall discounted bid of Habib Rafique was 26.14% above the engineer’s estimate.
The main reason for the rejection of M/s Xinjiang Beixin Road and Bridge Construction Company Ltd bid was non-submission of bid security as per the laid-down condition.
Auditors also found irregularities involving over Rs300 million in various other projects of the MIA. As much as Rs170.6 million was mismanaged in water charges and water bowser, the National Highway Authority and in other small projects.
An amount of Rs22 million was paid to a consultant, M/s Engineering Consultant International (Pvt) Ltd, on account of design consultancy of phase-II of the up-gradation of the MIA.
Auditors observed that the payment of Rs22 million on account of design consultancy was irregular because the payment was made from the funds of phase-I without administrative approval.
The AGP also observed that the project director accepted insurance documents of Rs45 million for the work, equipment and third party other than the National Insurance Company Limited, which was illegal.
Due to this acceptance of insurance from Adamjee, EFU and East West Insurance Company, a loss of Rs45 million to the public exchequer was caused.
The CAA had replied that the PEC’s Standard Bidding Documents are being followed by them for different packages of the Multan Airport Up-gradation Project. An amount of Rs7.2 million was incurred on inauguration of direct Hajj flights from Multan, while an amount of Rs2.8 million was paid due to the deployment of officers in excess of the approved working strength provided in the PC-1.
Published in The Express Tribune, June 27th, 2012.