NHA has over Rs31b in financial irregularities: Audit report

Unjust contracting, theft and non-deduction of income tax cited as some of several managerial blunders.

APP July 14, 2013
Heavy machinery busy in construction work on the highway. PHOTO: PPI/FILE

ISLAMABAD: An audit of last year’s accounts for the National Highway Authority (NHA) has exposed a huge case of mismanagement and embezzlement, with financial irregularities and losses of up to Rs31.43 billion.

The audit authorities have raised a total of 61 audit objections on the NHA's accounts, 22 of which are concerned with irregularities and non-compliance alone, 37 relate to the internal control weaknesses with two paragraphs highlighting the non-receipt of deposits by the provincial governments and irregularities inside the organization itself.

The audit report categorized losses in several categories.

These included:

• Irregular awarding of contracts, costing up to Rs11.22 billion.

• Overpayments worth over Rs3.21 billion.

• Losses to the authority worth Rs3.16 billion.

• Unjustified payments to contractors valued at Rs22.4 billion.

• Mismanagement in different works costing Rs8.50 billion.

• Amount of Rs2.68 billion which was non-recoverable.


The Auditor General of Pakistan (AGP) report indicated that:


• Road contracts worth Rs11.2 billion had been awarded to 'blue-eyed contractors' without the adoption of proper tendering procedures and contrary to the rules of NHA.

• The negligence of NHA officials also resulted in an overpayment of Rs3.2 billion. The loss owed itself to higher rates, non-deduction of income tax and price escalation of materials.

• A loss of Rs.3.2 billion was to be attributed to to amicable settlements, the non-collection of revenue, theft of vehicles and the awarding of work without due consideration of risk and cost.

• NHA officials could not recover an amount of Rs2.7 billion. The amount includes payment for the repair of flood damages; rent of NHA land used by contractor; mobilization advance and interest from contractors; cost of maintenance works due to non-finalisation of construction of N-50; non-deduction costs of excavated stone; and the dues of promotional displays on roads falling under the Authority’s jurisdiction.

• NHA officials made unjustified payments worth Rs2.2 billion. These included resettlement allowances and one additional cost compensation; change in source of material through post-bid amendment and the engagement of consultants on maintenance works.

• The report identifies the mismanagement of Rs8.5 billion in NHA accounts due to non provision of performance security from AA rating insurance company, mis-procurement of services, non obtaining of insurance policies of works and irregular purchase of luxury vehicles and unauthorised appointments.

The AGP office made repeated attempts to organise a Departmental Accounts Committee meeting for a discussion on these findings, but the NHA officials showed no interest.


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naeem khan Manhattan,Ks | 10 years ago | Reply

It is time to go after the managers and those who received mega payments. Look into their finances, residences and cars, you will find most of these people has been living beyond their means. They should be jailed for long time and perhaps the future generations could watch out their steps. There is limit to this greed, every institution has been compromised in the last two governments. Some time I wonder if the Chinese system for corruption should be established in Pakistan and those who were and are involved be given the Chinese style punishment, no exceptions or forgiveness for any one .

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