Glaring irregularities in Karachi project detected

Audit report finds excessive expenditure of Rs503m on purchase of land beyond requirement

ISLAMABAD: Serious irregularities have been found in the construction of a Labour Complex in Karachi, comprising around 3,000 flats, according to an audit report by the Auditor General of Pakistan.

“There was a cost overrun of Rs854.534 million due to non-completion of the project within the specified period,” states the report, adding that Rs503.315 million worth of excessive expenditure on purchase of land beyond requirement was also incurred.

The project was executed without first conducting any feasibility study and getting prior approval from the competent forum. It did not even have a full-time project director, according to the report released recently.



In 2006, the Sindh Workers Welfare Board Karachi proposed the construction of a Labour Complex consisting of 3,008 flats near Northern Bypass Karachi to provide housing facilities with allied services to workers.

The PC-1 of the project was prepared and subsequently approved by the Governing Body of Workers Welfare Fund in February 2007 at an estimated cost of Rs3,531 million.

As per the PC-1, the project was planned to be completed in 36 months after the approval and release of funds.

The project was executed in six phases; and till February 2015, 87% physical progress had been achieved and the project is still in progress. The six phases of the project involve 71 packages through various contractors.

“An upward payment of Rs4,385 million has been made on account of purchase of land and bills of contractors/consultants,” says the report.

The estimated cost of the project was Rs3,531 million and an expenditure of Rs4,385 million was incurred on account of purchase of land, civil work, escalation and consultancy service.



The audit report further observes: “During execution of work, quantities of some items, steel reinforcement bars, reinforced cement concrete, solid block masonry, printing and others were increased abnormally than the quantities provided in BOQ of the contract.”

The report holds that the design of the building and specification of the items of work was changed during the execution of works which “resulted in excess overall cost overrun of Rs854 million. The Sindh Workers Welfare Board Karachi purchased 194-24 acres of land for execution of the project whereas the project was executed on a piece of land measuring 66-25 acres.”

According to the report, the remaining land measuring 128-29 acres remained unused which indicated that the land was acquired beyond the requirement, resulting in excessive purchase of land valuing Rs503 million.

When inquired, the board replied that remaining land was acquired for future extension or construction of flats for industrial labour, says the audit report, but maintained, “the reply was not tenable because the land of 120-29 acres was purchased from the funds of the existing project.”

Meanwhile, the National Trade Union Federation (NTUF), a representative body of workers and labourers, also expressed reservation on the slow pace of progress on the project, saying, “It is causing concerns for the allottees of the flats”.

NTUF deputy general secretary Nasir Manoor told The Express Tribune, “The allottee workers have already paid the dues and they want possession of the flats.”

He said in a similar project at Gulshan-e-Maymar, as many as 1,008 flats of labourers and workers were illegally occupied in the name of flood affectees due to which genuine allottees suffered a lot for getting possession.

He said illegal occupants of the flats never paid electricity and gas bills amounting to hundreds of thousands of rupees, adding that when the occupants left the flats on a court order they took with them every valuable thing in the flats. “Now the flats present a pathetic look.”

Mansoor feared the same might happen with the Labour Complex near the Northern Bypass.