Multan International Airport: PAC chief protects people behind irregularities in Rs3.2b contract

Was awarded to entity that did not clear technical evaluation.

ISLAMABAD: Despite clear evidence showing that the Rs3.2-billion Multan International Airport upgrading contract was awarded to a company that submitted a higher bid, the Public Accounts Committee (PAC) chairman on Tuesday shielded the people that were behind the irregularity.

Syed Khursheed Shah, the chairman of PAC and a key leader of Pakistan Peoples Party (PPP), diluted all the questions asked either by audit officials or PAC members that could have helped catch those responsible for the wrongdoing.

The PAC meeting was called to discuss financial irregularities in the execution of various projects of the Civil Aviation Authority (CAA). The office of the Auditor General of Pakistan brought a special audit report on the upgrading of Multan International Airport undertaken during the PPP’s tenure.

The report highlighted audit objections involving an amount of Rs3.43 billion including the irregular award of a Rs3.2-billion contract for undertaking work on a passenger terminal building.

The contract was awarded to Habib Rafiq Private Limited though the company got only 59 marks during technical evaluation, which were not sufficient to be eligible for bidding for the contract, said Zahid Bashir, Director General Federal Audit.

Bashir said the CAA gave a grace mark to Habib Rafiq to declare it eligible. Under the head of financial capability, the company got only 11 marks out of 30, he added. It also did not submit all the required documents.

He said the company’s bid was also Rs223 million higher than the offer made by the lowest bidder, Xinjiang Bexin Road and Bridge Construction, a Chinese firm.

In a clear case of favouritism, the CAA declared the Chinese company’s bid non-responsive on the ground that the company submitted photocopy of the slip of the earnest money deposited in the bank, said the DG.

A meeting of the Departmental Accounts Committee found that Xinjiang Bexin had provided original bid security in a sealed envelope at the time of opening of the bids, which could have been accepted. The meeting held in June 2011 established favouritism in the award of the contract.

This is one of many cases that pertain to the PPP’s tenure of 2008-13 and are now being settled by Shah. The project was inaugurated by then prime minister Syed Yousaf Raza Gilani and completed at a cost of Rs9 billion.

The audit official said in order to match the lowest bid, Habib Rafiq gave a 5% discount after the opening of financial bids, but when it came to know that the lowest bidder had been declared ineligible, it raised the bid by Rs200 million on the pretext of typos.

A majority of PAC members observed that it was a clear case of favouritism. They wanted to make it a test case for PAC and were clearly in favour of fixing responsibility. However, despite their opposition, the chairman gave one-week more time for furnishing details of the case.

The audit department recommended to PAC to take action against the officials responsible for the irregular award of the contract and recover Rs223 million from the contractor on account of difference between the successful bidder’s offer and the second lowest bidder.

Shah wanted to set aside the audit objections but deferred a decision for the time being.

PAC settled an audit objection regarding the irregular payment of Rs7.2 million at the time of inauguration of direct Haj flights from the Multan airport. The payment was made to three vendors.

“Such functions are common and the audit should not raise any objection,” said Shah while setting aside the audit objection.

Published in The Express Tribune, April 29^th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.