SC asks NHA to explain four companies’ disqualification

National Highway Authority denies allegation of Rs500 million graft

ISLAMABAD: The top court has asked the National Highway Authority (NHA) to explain why four companies had been disqualified from bidding for the contract of the Rs8.7 billion Lahore bypass project’s construction.

Farooq Malik, in a letter to Supreme Court, highlighted the alleged corruption of NHA in award of contract for construction of Lahore Eastern Bypass Project from the Ring Road to Kala Khatai Road, including a bridge over River Ravi and Lakhudher Interchange. On the basis of this letter, the three-judge bench of the apex court, headed by Chief Justice Mian Saqib Nisar, took suo motu notice on Tuesday.

The applicant had alleged that the NHA illegally awarded this contract to its contractor ZKB against higher contract prices taking bribes, and not to the lowest bidder, the EKO Turkish company, whose bid was Rs500 million cheaper.



Malik had requested the top court to issue directions to the National Accountability Bureau (NAB) to look into the matter and submit its report. However, the NHA, while submitting its reply, denied the allegation of Rs500 million corruption in the bidding process. NHA informed the top court that the authority’s executive board in its meeting on December 22 had approved the award of M/S ZKB at evaluated bid price of Rs7,410,793,994 which was 18 per cent below the engineer’s estimate.

Contrary to the allegation, the authority’s reply stated that the Turkish firm, M/S EKO Insaat, actually participated in the bidding process with Pakistani construction firm, M/S Habib Construction Services, in Joint Venture (JV) with the shares of 60 per cent and 40 per cent respectively.

The procurement of the construction of Lahore Eastern Bypass Package1 was initiated in September 2016 using Single Stage Two Envelope bidding procedure. In this procedure, bidders submit their technical and financial bids simultaneously in separate envelops. Technical bids are evaluated first and financial bids of only technically qualified bids are evaluated. The completion period of the said project is 15 months corresponding a high cost of Rs8.7 billion.

The bid evaluation criteria was devised inter-alia with minimum cash flow of requirement of prospective bidder to 2.3 billion (as per JV shares Rs1.38 billion for foreign company and 0.92 billion for local company), it stated further.

NHA said that during the evaluation it transpired that the cash flow of Turkish firm was negative which reflected a very weak financial position of the said firm.



“In accordance with PPRA Rules 36 (b)(v), NHA evaluated technical proposals and as a result JV failed to qualify following mandatory requirements of bidding document. After evaluation, including JV four other bidders were technically disqualified and such bids were not opened publicly,” the reply stated.

It also stated that the disqualified JV through an unconcerned citizen namely Farooq Malik was attempting to misguide the court, adding that the JV had also approached the NHA Redressal Grievance Committee which comprises officers who are not directly involved in the bidding process. The said committee, it stated, also found that the firm was disqualified on technical grounds.

During the hearing on Tuesday, Ayesha Hamid appeared on behalf of concerned company. The bench hinted that it could conduct an audit of whole exercise. The chief justice said the court wants to secure Rs500 million for the national exchequer.

The bench, however, asked NHA to submit technical reasons on the basis of which four companies were disqualified from the bidding process. The hearing of the case is adjourned till April 4.