AGP raises 45 major audit objections

FAZAL SHER

ISLAMABAD: The Auditor General of Pakistan (AGP) has raised 45 major audit objections with regard to National Highway Authority’s accounts of which 32 audit observations related to internal control weaknesses, 9 regarding irregularities and non-compliance whereas four related to performance.

The audit report 2013-14 contained several observations in three categories including non-obtaining of works insurance policies costing Rs 29,879 million, overpayments of price escalation amounting to Rs 3,719.75 million, unauthorised/irregular payment of claims through variation orders Rs 1,108.91 million, irregular award of works and expenditure beyond PC-1 limits/provisions Rs 14,826.05 million and loss of revenue due to non-establishment of toll plazas Rs 5,783 million.

Audit authorities found that NHA failed to obtain insurance policies for equipment, plants and vehicles amounting to Rs 29,879.74 million from the contractors in four projects. The absence of insurance arrangements put the workmanship and equipment at risk and increased the vulnerability of NHA to incur a huge liability in case of an incident.

The audit observed that NHA in execution of 21 projects calculated and paid price escalation. This resulted in irregular payment of Rs 3,719.75 million.

The report noted that project director, Lowari Tunnel and Access roads projects of NHA paid a sum of Rs 1,108.91 million on account of various claims through variation order No 1 to 5 without fulfilment of codal formalities and reconciliation of Dispute Review Expert (DRE) and financial concurrence of NHA finance wing. Speedy action was taken by the NHA management without getting rate analysis and explanation from the design consultant for frequent changes in design. This resulted in unjustified/in-competitive expenditure of Rs 1,108.91 million.

The report said that NHA awarded the construction work of ‘Flyover at Nag Shah Chowk’ at the agreement cost of Rs 602.94 million against PC-1 cost of Rs 364.64 million in June 2010, involving excess amount of Rs 238.88 million.

The audit observed that NHA included ancillary works and electrical work at interchanges in the tender document despite their deletion from proposed scope/PC-1 by Ecnec and awarded these works to the contractor for Rs 1,477.78 million. The NHA spent Rs 13,109.39 million in 15 projects without approval of the competent forum Ecnec/CDWP and without revision of PC-1.