Financial irregularities: Rs4.47b leak detected in Punjab water project
Huge difference found in contract and market prices of filtration plants.
LAHORE:
Financial leaks worth Rs4.47 billion are appearing in the clean drinking water project (CDWP) as a result of political and bureaucratic negligence at both the federal and Punjab government levels, The Express Tribune has learnt.
The Punjab Public Health Engineering Department worked out a difference of Rs4.47 billion between the contract and market prices of project products, a senior official said on condition of anonymity. Some quarters are trying to suppress the issue.
Another official said that Punjab Chief Minister Shahbaz Sharif was being hoodwinked by senior bureaucrats trying to protect the officials concerned.
The federal government had launched the ‘clean drinking water for all’ project with the aim of installing 6,615 water filtration plants in all union councils across the country.
There were two types of plants: ultra-filtration plants and reverse osmosis plants.
The Centre approved the project at a cost of Rs15.843 billion.
As many as 3,494 water purification plants were to be installed in Punjab and the Centre was to provide Rs12.2 billion for installing them.
The Centre constituted four committees for executing the project. Eight officials from Punjab were tasked with evaluating bids and submitting recommendations to a pre-qualification committee.
The contract auctioning committee was headed by the federal minister for special initiatives. One of its members was the chairman of the Planning and Development Board, Punjab.
On June 30 last year, on the direction of the Punjab chief minister, contract agreements were signed with five private sector firms.
According to the documents available with The Express Tribune, AA Flowmatic Engineering was awarded the contract to install 540 water filtration plants, Syed Bhais 768, KSB Pumps Company 793, Amin Brothers Engineers 782 and Tauseef Enterprises 611.
The provincial government received Rs3.77 billion from the Centre during 2009-10 for commencing work — the Punjab government handed out Rs1.81 billion as mobilisation advances to the five firms.
According to data available with The Express Tribune, 147 water purification plants were commissioned till August this year, while 265 plants were partially installed. Contracts for 264 plants were issued to firms.
After installing about 212 plants, it was discovered that prices negotiated with pre-qualified firms were tremendously higher than market prices.
Ultra-filtration plants, it is learnt, were acquired against payment of unit prices ranging between Rs1.7 million and Rs2.8 million against a market price of Rs1.2 million.
Kickbacks, it is learnt, had been paid for fixing a per unit price of reverse osmosis plants at Rs7.8 million against a market price of Rs2.6 million.
After complaints surfaced, the Punjab government ordered a survey, which unearthed a huge difference of Rs4.47 billion in the prices.
On October 30, Chairman of the Planning and Development Board Javed Aslam, convened a meeting on the matter.
The committee was informed that the huge difference in prices was because of the negligence of officials concerned, but instead of recommending filing a corruption reference, it suggested a “third party validation”, suggesting a freeze on the project. The committee recommended stopping payments.
This was clearly an attempt to “save the hide of the then chairman of the provincial Planning and Development Board, who was a member of the committee which finalised the prices and the director-general of the local government department who signed the agreements”, an official said.
During the meeting, it was pointed out that the commissioner Lahore insisted upon the director-general of the local government to pay Rs850 million to Amin Brothers and KSB.
Hassan Nasir Jami, the then director-general of the LG&CD, said that if such a huge difference had been detected, a comprehensive inquiry should have been instituted.
The chairman P&D said that the prices had been negotiated by the federal government because project was funded by it. However, the federal government has now completely cut off funds, forcing the Punjab government to shelve the project.
Published in The Express Tribune, December 17th, 2010.
Financial leaks worth Rs4.47 billion are appearing in the clean drinking water project (CDWP) as a result of political and bureaucratic negligence at both the federal and Punjab government levels, The Express Tribune has learnt.
The Punjab Public Health Engineering Department worked out a difference of Rs4.47 billion between the contract and market prices of project products, a senior official said on condition of anonymity. Some quarters are trying to suppress the issue.
Another official said that Punjab Chief Minister Shahbaz Sharif was being hoodwinked by senior bureaucrats trying to protect the officials concerned.
The federal government had launched the ‘clean drinking water for all’ project with the aim of installing 6,615 water filtration plants in all union councils across the country.
There were two types of plants: ultra-filtration plants and reverse osmosis plants.
The Centre approved the project at a cost of Rs15.843 billion.
As many as 3,494 water purification plants were to be installed in Punjab and the Centre was to provide Rs12.2 billion for installing them.
The Centre constituted four committees for executing the project. Eight officials from Punjab were tasked with evaluating bids and submitting recommendations to a pre-qualification committee.
The contract auctioning committee was headed by the federal minister for special initiatives. One of its members was the chairman of the Planning and Development Board, Punjab.
On June 30 last year, on the direction of the Punjab chief minister, contract agreements were signed with five private sector firms.
According to the documents available with The Express Tribune, AA Flowmatic Engineering was awarded the contract to install 540 water filtration plants, Syed Bhais 768, KSB Pumps Company 793, Amin Brothers Engineers 782 and Tauseef Enterprises 611.
The provincial government received Rs3.77 billion from the Centre during 2009-10 for commencing work — the Punjab government handed out Rs1.81 billion as mobilisation advances to the five firms.
According to data available with The Express Tribune, 147 water purification plants were commissioned till August this year, while 265 plants were partially installed. Contracts for 264 plants were issued to firms.
After installing about 212 plants, it was discovered that prices negotiated with pre-qualified firms were tremendously higher than market prices.
Ultra-filtration plants, it is learnt, were acquired against payment of unit prices ranging between Rs1.7 million and Rs2.8 million against a market price of Rs1.2 million.
Kickbacks, it is learnt, had been paid for fixing a per unit price of reverse osmosis plants at Rs7.8 million against a market price of Rs2.6 million.
After complaints surfaced, the Punjab government ordered a survey, which unearthed a huge difference of Rs4.47 billion in the prices.
On October 30, Chairman of the Planning and Development Board Javed Aslam, convened a meeting on the matter.
The committee was informed that the huge difference in prices was because of the negligence of officials concerned, but instead of recommending filing a corruption reference, it suggested a “third party validation”, suggesting a freeze on the project. The committee recommended stopping payments.
This was clearly an attempt to “save the hide of the then chairman of the provincial Planning and Development Board, who was a member of the committee which finalised the prices and the director-general of the local government department who signed the agreements”, an official said.
During the meeting, it was pointed out that the commissioner Lahore insisted upon the director-general of the local government to pay Rs850 million to Amin Brothers and KSB.
Hassan Nasir Jami, the then director-general of the LG&CD, said that if such a huge difference had been detected, a comprehensive inquiry should have been instituted.
The chairman P&D said that the prices had been negotiated by the federal government because project was funded by it. However, the federal government has now completely cut off funds, forcing the Punjab government to shelve the project.
Published in The Express Tribune, December 17th, 2010.