Islamabad airport audit exposes anomalies

Ineligible contractors awarded work in breach of rules

Riazul Haq August 28, 2017

ISLAMABAD : The auditor general’s report for 2016-17 detected massive irregularities in the construction of New Islamabad Airport, including irregularly awarding work to ineligible contractors in violation of rules causing losses running into billions of rupees to the national exchequer.

The construction of the new Islamabad airport has already been delayed.

The Auditor General of Pakistan also identified violation of the Planning Commission’s project management guidelines, including rules of Public Procurement Regulations Authority in several projects. The report was recently tabled in parliament.

Tendering for ‘aircraft stand equipment’ was unjustifiably delayed, resulting in payment of higher rates because of limited competition and fluctuations in foreign currency rate. Work on this project was awarded at Rs5.99 billion or 25.3 per cent higher than the engineer’s provisional estimate of Rs4.7 billion.

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“Audit maintains that unjustified delay in tendering process caused award of work at higher rates without revision of the initial Project Cycle (PC) I which was due to weak internal controls.”

The audit also observed that details of original and final estimates of engineer were also not produced in support of the Civil Aviation Authority’s (CAA) reply.

For the project titled ‘special baggage handling system for passenger terminal building’, the audit noted that tenders were advertised in May of 2013 but contractors were not even registered with the Pakistan Engineering Council (PEC) in individual and joint venture capacity. Similarly, additional work of Rs587 million was awarded during negotiation process against PPRA rules.

Similarly, work on Airport Information Management System (AIMS), set to start in December 2015, was awarded at 281.39% higher cost than the approved cost.

Tender documents were issued without Pakistan Engineering Council (PEC) registration and the scope of work was reduced for Rs402 million without intimation to other bidder as per rules.

In another project for fixing furniture, counters, signage and seating for passenger terminal building at the new airport, the auditor objects that the technical evaluation was not carried out in accordance with criteria set in bidding documents, resulting in “irregular award of contract of Rs1.5 billion”.

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“The bid evaluation process was not in line with evaluation criteria provided in bidding documents,” findings in the audit reports stated, adding that the compliance of the departmental Accounts Committee (DAC) directive was not reported till the finalisation of that report.

In another project, the contractor failed to complete the work on the airport baggage handling within the specified time. The project’s cost was Rs4.5 billion and should have been completed by January last year.

According to audit observations, the contractor was unable to complete the work even after the expiry of the stipulated completion period, but CAA neither imposed liquidated damages nor recovered them. This resulted in non-recovery of damages amounting to Rs900 million or 20 per cent of the total amount that should have been recovered as per rules.

Interestingly, the auditor general had been told that the contractor was allowed to finish work on the project by January this year, but the project was still unfinished when the due date arrived. He advised the authorities concerned to file damages at the time of final bill. The DAC also directed the authorities concerned to recover the damages.

The auditor general also pointed out internal control weaknesses to Pakistan International Airline Corporation.


ishrat salim | 4 years ago | Reply Wherever one puts his hand on any project, it smells of financial mis-management, corruption & embezzlement. This is because, when the head is rotten the whole body rots.
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