NAB saves Rs168.5b in Peshawar BRT project

Contractors withdraw claims against K-P govt at ICA

ISLAMABAD:

The National Accountability Bureau (NAB) achieved its largest indirect recovery in its 25-year history, saving Rs168.5 billion and securing withdrawal of contractors' claims totalling Rs31.5 billion against the K-P government at the International Court of Arbitration (ICA).

The case pertained to the Bus Rapid Transit (BRT) Project, Peshawar. In 2018, NAB initiated an inquiry into allegations of illegal award of contract, misappropriation of government funds and submission of bogus performance guarantees by the contractors.

NAB investigation revealed that six contracts of civil works of the BRT project – three for roads and three for buildings – were awarded illegally. The contractors included four joint ventures of Pakistani and international firms. However, investigations revealed that those agreements were merely on papers.

The international firms did not do the actual work and awarded the contract to the local firms by charging 2% fee. In that way those international firms received Rs1 billion. NAB investigated more than 400 bank accounts which confirmed these transactions.

Besides, a 20% premium was paid to the contractors to complete the work in six months but they did not meet the deadline. NAB's investigation also revealed that fake guarantee of Rs2 billion was submitted to the Peshawar Development Authority (PDA).

The investigation also revealed that the local contractors submitted bogus audit report to get the contract illegally. The Security and Exchange Commission of Pakistan (SECP) and the chartered accountants of those contractor firms confirmed that the audit reports were bogus.

According to the sources, the contractors raised the project's cost and filed claims of Rs66 billion with the PDA. However, due to the NAB investigation, the project was completed at the original cost and Rs9 billion was saved.

The sources said that NAB not only disclosed the names of all the concerned persons during these investigations, but also placed them on the ECL. Besides, red warrant was issued by Interpol to bring a firm owner back to Pakistan.

NAB K-P not only supported the negotiations between the contractors and the PDA on this matter but also supervised the whole process and provided all possible facilities. Thus, an agreement was reached between the two parties.

As per the agreement signed in the first week of September, the contractors withdrew all their claims, including the ICA case against the provincial government, while the PDA paid only Rs2.6 billion to the contractors.

The representatives of the contractors also recorded their statements in the Peshawar accountability court and sent request to the ICA for withdrawing the claims. The ICA confirmed to the contractor and the PDA through an email on September 16 that they were rejecting the claim of the contractors.