Higher than anticipated: Cost over-runs leave NHA poorer by Rs35b

Expenditures increase by 22%.

ISLAMABAD:

The National Highway Authority (NHA) informed the Senate’s standing committee on communication and motorways that it has spent an extra Rs35 billion because of the escalation in cost of different projects, increasing expenditures by 22%.

According to the detailed presentation given to the committee meeting, presided by Senator Mohammad Daud Khan Achakzai, the cost escalated in over 92 projects due to the delay in the release of funds, as well as the delayed execution of these projects.

The committee members expressed reservation over the escalated cost of the development projects. However, some members also alleged that few influential contractors managed to mint extra money by using their influence in NHA — and in many cases the contractors managed in connivance with the NHA officers.

The highest amount worth Rs16.139 billion was paid as an escalated cost to the contractors in the National Highway Improvement Program (NHIP).

The Gwadar-Ratodero (M-8) project cost has escalated by Rs2.540 billion and the Lowari Tunnel project cost escalated by Rs1.233 billion.

Additionally, Rs4.063 billion escalated in the cost of the National Highway Development Sector programme. Under the escalated cost of the project Rs1.914 billion were paid to China Water and Electricity in the Faisalabad-Khanewal(M-4) project, Rs1.277 billion were given additionally to FWO for Sehwan-Ratordero road, while Rs1.896 billion were paid to Limak-ZKB for Qilla Saifullah-Zhob road.

Published in The Express Tribune, March 15^th, 2014.