Completion of ministry building 6 years overdue

Audit report says foreign ministry accorded undue favours to a construction firm.

ISLAMABAD:

Despite the passage of over six years, the construction of a building in the ministry of foreign affairs remains incomplete owing to mismanagement by the ministry as well as a construction company, sources revealed to The Express Tribune.

Construction work on the high security block started on June 14, 2005, and was supposed to complete by December13, 2006. The contract was awarded to the Recent Construction Co at an agreed cost of Rs234.422 million.

According to clause 47.1 of the agreement, in case the contractors fail to meet the deadline, they are liable to pay liquidated damages at the rate of 1% of the contract value or at the amount the engineering-in-charge may decide (maximum up to 10% of the estimated cost of work).

According to an audit report, however, the foreign affairs ministry accorded undue favours to the Recent Construction Co, which caused a delay of over six years.

The ministry, itself, is faced with financial losses due to the delay as the cost of construction has increased manifolds during the last six years.

The ministry could also neither impose nor recover the liquidated damages, amounting to Rs116.55 million, from the company on account of delay.

The audit report stated, “Contrary to the agreement, the contractor failed to complete the work on the due date. However, in April 2008, the contractor gave an undertaking, duly registered in court, for completion of work by June 30, 2008, stating that if he failed to do so, liquidity damage for delay, forfeiture of Performance Bond cum Retention Money would be effected and the work be executed at his risk and cost with effect from April 1, 2008.”

While the contractor failed to comply with his commitment, the ministry also did not impose any liquidated damages which amounts to undue favours, the audit report pointed out.

While the matter was pointed out to the ministry in November 2009, it asked for the matter to be deferred till the completion of the contract.

In a meeting on December 30, 2009, the Departmental Accounts Committee directed the foreign affairs ministry to investigate the matter and report to the audit within six weeks. However, no progress was made on part of the ministry till the finalisation of the audit report.

Ministry, company taking full responsibility

When contacted, Additional Secretary of the Foreign Affairs Ministry Abdul Hameed told The Express Tribune that he was not responsible for the affairs of the dispute as he was not in-charge at the time.

He refused to comment on the audit report which stated that undue favours were accorded to the contractor by a senior official of the ministry.

However, the additional secretary was confident that the construction of the high security block would be completed within five months.

Despite repeated attempts, Chief Executive of the Recent Construction Co Rafaqat Ali Khan was not available for comment. However, Faisal Iqbal, a manager, admitted that the company had not paid Rs116.55 million to the ministry in liquidated damages so far.

Site in-charge of the construction company Raja Qamar Zaman told The Express Tribune that the construction would be completed by the end of 2012.  He said the funds for the construction were not made available by the ministry in the due course of time, and added that, both, the ministry and the construction company, were equally responsible for the delay.

Zaman also held Airtech Engineering Company responsible for the delay, saying it had been awarded a contract by the ministry for the installation of an air conditioning system in the building but could not meet the deadline, causing further delay.

Akram, an official in Airtech, however, denied that his company was responsible for any delay.

Published in The Express Tribune, September 9^th, 2012.