Kachhi Canal: Rs6.5b cost inflation revealed
An official independent validation has unearthed an inflated cost of nearly Rs6.5 billion, or 158%, for the Kachhi Canal project – in a disclosure that sheds light on systemic deep-rooted nexuses siphoning taxpayer money.
The third-party validation of the reconstruction cost of the flood-dilapidated highly controversial Kachhi Canal project had been ordered by Planning Minister Ahsan Iqbal after he smelled a rat in the project documents presented for the approval of the scheme nearly two months ago.
Highly placed sources said that the National Accountability Bureau (NAB) has also endorsed the quantity calculated by the third party for complete de-silting of the canal by excavating actual silt on the project site.
Based on a summary of the Water Resources Ministry, the Central Development Working Party (CDWP) had last month conditionally cleared the Rs14.7 billion Kachhi Canal Project Restoration of Flood Damages 2022 project.
The project had been sanctioned subject to third-party validation. The ministry had moved the summary based on the input from the Water and Power Development Authority (Wapda).
Out of the Rs14.7 billion, the construction cost was Rs10.6 billion, according to the official documents. However, the third-party validation revealed that the reconstruction cost was not more than Rs4.1 billion, unearthing nearly Rs6.5 billion overestimations.
Like the Neelum Jhelum project, the Kachhi Canal Project has also remained controversial since its conception in 2002. Owing to a multitude of issues of incompetence, poor planning, and change in project goals, Phase I of the project was completed in 2018.
The project had been designed to boost agriculture and enhance the socio-economic profile of the area for the underprivileged population of Balochistan.
The canal was closed after the July 2022 devastating floods and its partial restoration would require Rs10.6 billion spending as per the Wapda and Rs4.1 billion as per the third-party validation.
After finding huge cost discrepancies, the planning minister has decided to take up the matter with Prime Minister Shehbaz Sharif, according to the sources.
The ministry is also now reviewing the possibility of moving another working paper for the approval of the project at the third-party validated cost of only Rs4.1 billion.
The claimed reconstruction cost was 158% more than the third-party validation carried out by the consultants, confirmed senior officials of the Ministry of Planning and Development. The cost was inflated by adding work quantities, showing a comparison between the third-party validation and the PC-I figures of the project.
Interestingly, the third party has not changed the rates quoted by Wapda for the work and the nearly Rs6.5 billion difference is only on account of the quantities. For instance, for furnishing earth fill material and compaction of embankment, Wapda had quoted Rs2.1 billion price, which according to the third party should be only Rs913 million showing a massive gap of Rs1.1 billion against just one major earthwork component.
Likewise, the Wapda estimated the cost of clearance of silt, clay and debris at Rs2.4 billion, which according to the third party should be not more than Rs471 million an overestimation of Rs1.9 billion.
For the canal lining component of providing cement sands, Wapda quoted Rs720 million price, which the third party estimated at only Rs245.6 million and unearthed the cost difference of Rs474 million.
For placing plain cement concrete, Wapda estimated Rs458 million cost as against Rs114 million by the third party, showing a variation of Rs344 million.
The Kachhi Canal rehabilitation is the second project where the Wapda was found at fault after the planning minister caught it submitting the ChatGPT-prepared inception report for the collapse of the Neelum Jhelum hydropower project tunnel.
The CDWP had in the first week of September recommended the Kachhi Canal Infrastructure project to the Executive Committee of the National Economic Council at a total cost of Rs14.7 billion.
Unprecedented torrential rains occurred in the project area during the monsoon in June and August 2022. Resultantly, exceptionally high flash floods emanating from major Hill Torrents of Koh e Suleman range hit the Kachhi Canal and severe damages occurred to the canal due to this natural calamity.
The federal government wanted to partially make the canal functional by ensuring at least 500 cusec water flows for Balochistan before November 15th as against the total canal capacity of 6,000 cusecs water.
The NAB, which is also investigating the wrongdoings in the project, had recommended that the canal should not be fully restored until ancillary works like the development of the command area and the management of the hill torrents by the Punjab government are completed.