Margalla Avenue project: Delay in work may cause cancellation of contract

Civic agency officials say contractor has not provided bank guarantees, work is behind schedule

ISLAMABAD:

The city’s first ring road may witness further delays as the Capital Development Authority is considering terminating the construction contract for the Margalla Avenue project.

The project involves construction of nine-kilometre road from GT Road near Sangjani to sector D-12 of the capital.

In 2012, a Rs588 million contract was signed by the authority with a construction firm owned by a sitting Pakistan Peoples’ Party senator.

The reasons stated behind the development are low performance in terms of construction at the site and non-submission of bank guarantees against the project by the contractor, which is mandatory under CDA contract agreement rules.

“The CDA’s goal is to complete the project at the earliest. We are contemplating several options to achieve this,” CDA Engineering Member Shahid Sohail said.

Sohail said the CDA would ask the contractor to execute the project and if the contractor cannot meet the CDA’s deadlines, the agreement will be cancelled.

He said that in a recent meeting held at the CDA headquarters, the CDA Works DG had been tasked with finding other ways forward.

When asked about issues regarding the possession of land along the route, Sohail said, there is a two-and-a-half-kilometre patch of disputed land falling within the Margalla Avenue route. “Works DG will also consider the option to reroute the avenue around the disputed area,” he added.

On the other hand, the contractor has shown also reluctance to submit bank guarantees with the authority. Sohail said the firm is adamant about submitting insurance guarantees instead of the mandatory bank guarantee.

He said the authority had already withheld an amount equivalent to the bank guarantee from the amount payable to the contractor for work already done.

A recently released Auditor General of Pakistan report on the CDA’s accounts says, “The contract clauses regarding insurances were not invoked by the CDA which not only amounts to provide undue benefit to the contractor which would put the work, equipment, property and labour at risk.”

It further says that failing to obtain a guarantee was an act of willful negligence and undue financial aid to the contractor which compromised the authority’s interest and resulted in financial impropriety.

It’s worth remembering that at signing of this contract several officers at the CDA had raised objections over filling lower rates by the contractor to win this contract.

The said firm had won the contract by offering to undertake and complete the project at Rs588 million instead of Rs1.042 billion, which was estimated in the PC-I of the project --- around 21 per cent below National Highway Authority scheduled rates in 2009.

The groundbreaking ceremony of the project took place in May 2012 and the completion date was June 30, 2013. But only 53 per cent work has been done so far.

The incumbent regime had extended the project from GT Road to Murree Expressway in a bid to allow Murree-bound vehicles coming from the motorway and GT Road to bypass Islamabad. The first portion includes the construction of a road from GT Road to Sector D-12, the second starts from D-12 and culminates at Constitution Avenue after passing through the E and F series of sectors, while the third portion involves the construction of a road from Constitution Avenue to Murree Expressway.

Work on second and third portions of the project has yet to be initiated.

Published in The Express Tribune, November 7^th, 2014.