Zero Point Interchange project: Cash-strapped CDA wasted Rs2b in taxpayers money
Project cost escalated 138% because of delays, changes in design.
ISLAMABAD:
Irregularities, bureaucratic red-tape, ill-planning and delayed payments in the only mega project of the city cost the civic agency around an extra Rs2 billion, says an audit report.
The cost of the Zero Point Interchange escalated by 40 per cent to Rs3.27 billion, far above the original estimated cost of about Rs1.3 billion due to repeated changes in the scope of work and designs, says the Auditor General of Pakistan (AGP) in its report for 2011-12.
It also pointed out that the project was launched without a feasibility report. The civic agency failed to produce feasibility report for audit despite repeated demands, it says.
The audit report says that the bid was accepted at 72 per cent above the original estimated cost of Rs1.372 billion, which was beyond the permissible limit of 15 per cent over the administrative approval, whereas a revised administrative approval was also required as per the instructions of the Planning Commission.
Besides, the audit report also pointed out that detailed measurements of work done were not recorded. At the same time, the report also revealed that the execution of items not provided in the bill of quantity (BOQ) resulting in a cost escalation of Rs55.026 million. The report also found Rs117.881 million in extra expenditure incurred due to changes in the designs without technical justification.
Substitution of BOQ items and application of higher rates caused overpayment of Rs56.184 million and escalation was allowed on unutilised material totalling Rs1.212 million. The auditors also raised objection that cross-sections of earth work was not taken prior to commencement, leading to an extra payment of Rs91.454 million.
It was also observed in the report that application of incorrect item rate caused overpayment of Rs12.80 million. The report also reveals overpayment of Rs22.693 million due to non-deduction of volume of earth structure.
Background of the project CDA floated tender for the project on June 28, 2008 with four firms submitting bids, the lowest of which was Maqbool Associates with Rs2.359 billion against the estimated cost of Rs1.372 billion, or 72 per cent above the official estimate. After negotiations, the lowest bidder offered a five per cent rebate on schedule and non-scheduled items, which was accepted by the then CDA chairman at a bid price of Rs2.346 billion. Work commenced on September 9, 2008 with a stipulated completion period of 24 months. However, the project was delayed and took 39 months to complete.
Published In The Express Tribune, June 13th, 2012.
Irregularities, bureaucratic red-tape, ill-planning and delayed payments in the only mega project of the city cost the civic agency around an extra Rs2 billion, says an audit report.
The cost of the Zero Point Interchange escalated by 40 per cent to Rs3.27 billion, far above the original estimated cost of about Rs1.3 billion due to repeated changes in the scope of work and designs, says the Auditor General of Pakistan (AGP) in its report for 2011-12.
It also pointed out that the project was launched without a feasibility report. The civic agency failed to produce feasibility report for audit despite repeated demands, it says.
The audit report says that the bid was accepted at 72 per cent above the original estimated cost of Rs1.372 billion, which was beyond the permissible limit of 15 per cent over the administrative approval, whereas a revised administrative approval was also required as per the instructions of the Planning Commission.
Besides, the audit report also pointed out that detailed measurements of work done were not recorded. At the same time, the report also revealed that the execution of items not provided in the bill of quantity (BOQ) resulting in a cost escalation of Rs55.026 million. The report also found Rs117.881 million in extra expenditure incurred due to changes in the designs without technical justification.
Substitution of BOQ items and application of higher rates caused overpayment of Rs56.184 million and escalation was allowed on unutilised material totalling Rs1.212 million. The auditors also raised objection that cross-sections of earth work was not taken prior to commencement, leading to an extra payment of Rs91.454 million.
It was also observed in the report that application of incorrect item rate caused overpayment of Rs12.80 million. The report also reveals overpayment of Rs22.693 million due to non-deduction of volume of earth structure.
Background of the project CDA floated tender for the project on June 28, 2008 with four firms submitting bids, the lowest of which was Maqbool Associates with Rs2.359 billion against the estimated cost of Rs1.372 billion, or 72 per cent above the official estimate. After negotiations, the lowest bidder offered a five per cent rebate on schedule and non-scheduled items, which was accepted by the then CDA chairman at a bid price of Rs2.346 billion. Work commenced on September 9, 2008 with a stipulated completion period of 24 months. However, the project was delayed and took 39 months to complete.
Published In The Express Tribune, June 13th, 2012.