PAC sends Rs4.5b airport contract for NAB probe

Khursheed Shah suspects Rs1.5 billion corruption in the deal

ISLAMABAD: Claiming to have found reasonable grounds for corruption, the Public Accounts Committee (PAC) on Wednesday asked the National Accountability Bureau (NAB) to investigate the ‘controversial’ award of a contract concerning the under-construction Islamabad International Airport.

A PAC meeting presided over by Syed Khursheed Shah, the chairman, was informed that the Civil Aviation Authority (CAA) had awarded the Package-iv contract for Rs4.5 billion for which it originally received bids worth Rs3.9 billion.

The committee, suspecting corruption of roughly Rs1.5 billion in the whole deal, directed NAB to register a case against CAA officials, project management and any other official or public office-holder who was directly or indirectly involved in the deal.



“It is a unique case in my career where the bid price was Rs3.9 billion while the CAA gave the work order at Rs4.5 billion,” Shah was quoted as telling PAC members during Tuesday’s meeting when the case was first discussed in the committee.

On Wednesday, Shah asked NAB to complete the investigation within three months. “This will be a test case for the new NAB chairman,” remarked Shah while asking the NAB representative to complete the investigation on time.

It was the second case in as many days where the PAC ordered an inquiry after finding what were called serious illegalities over the New Islamabad International Airport.

On Tuesday, the PAC ordered parliamentary investigation into another contract valuing Rs6 billion. The total cost of the project is Rs81 billion and there are still few more audit objections that the PAC is expected to take up next month.

The federal auditors have unearthed serious illegalities in the award of contract for the installation of a special baggage handling system for passenger terminal building of the New Islamabad International Airport.

The Public Procurement Regulatory Authority (PPRA) rules state that the bidder should be a licence holder of the Pakistan Engineering Council – a requirement that the winning consortium, M/s Thales-Selex and Guarantees Engineering Pakistan, was not fulfilling. Yet it got the contract.

“The Civil Aviation Authority illegally awarded the contract on the negotiation basis to M/s Thales-Selex and Guarantees Engineering Pakistan,” according to the Auditor General of Pakistan.

The federal auditors found out that the financial bid of the winning party was ‘non-responsive’ and should have been rejected by the CAA in the first place. “In violation of the PPRA Act, negotiations were held with the wining party to facilitate it to meet the bidding documents’ requirements.”



The Pakistan Engineering Council (PEC) and the PPRA assisted the PAC on technical and legal aspects of the bidding.

“The joint venture consortium of M/s Thales-Selex and the Guarantees Engineering Pakistan applied for the PEC registration after winning the contract,” confirmed the PEC vice-president in the meeting.

“The tender for the Package-iv work was floated in May 2013, but the consortium applied for the registration in April 2016,” the PEC official added.

According to the vice-president, bylaws of the PEC make it binding that the no department issue tender documents to a bidder unless it is registered with the council.

Aviation Division Secretary Irfan Elahi frequently changed his stance on the issue of the bidder’s registration with the PEC. Eventually, he admitted that the CAA committed the irregularity. After defending the deal initially, the aviation secretary also confessed that the conditional bid of the party should have been rejected.

“The post-tender award registration of the bidder was an attempt to cover up things,” observed Syed Naveed Qamar of the PPP.

The PPRA managing-director also told the meeting that the base of the Package-iv tender was wrong from the beginning, adding the contract documents were issued in 2013 without mentioning the closing time of the bids clearly.

“This is mala fide abuse of position and a fit case to be sent to NAB for registration of an FIR,” said Shah, adding, “At least Rs1.5 billion has been siphoned off in a deal of just Rs4.5 billion.”

The aviation secretary alleged that the then project director, Brig (retd) Pervez Nizai was solely responsible for all the wrongdoings. However, the PAC did not buy his argument.