ISLAMABAD: Denying Rs 500 million corruption allegations in construction of Lahore Bypass, the National Highway Authority (NHA) on Thursday informed the Supreme Court that the authority awarded contract to a company at a price which was 18 percent below from the engineer’s estimate.
It also stated that the authority’s executive board in its meeting on 22 December, 2016 had approved the award of M/S ZKB at evaluated bid price of Rs 7,410,793,994 which was 18 percent lower than the estimate. In pursuance with the orders of the chief justice, who took cognizance of alleged corruption, the NHA submitted a 4-page report before the court.
Chief Justice Saqib Nisar had taken notice on a letter sent by Farooq Malik on February 11. Malik highlighted the alleged corruption in award of contract for construction of Lahore Eastern Bypass Project from Lahore Ring Road to Kala Khatai Road including bridge over River Ravi and Lakhudher Interchange.
The applicant had alleged that the NHA illegally awarded this contract to its blue eyed contractor ZKB against higher contract prices by taking kickbacks and not to the lowest bidder, the EKO Turkish Company, whose bid was Rupees 500 million cheaper.
Malik had requested to issue directions to the National Accountability Bureau (NAB) to probe into matter. The procurement of the construction of Lahore Eastern Bypass Package1: From Lahore Ring Road to Kala Khatai Road, including bridge over River Ravi and Lakhundar Interchange was initiated in September of 2016 using single stage two envelope bidding procedure.
In this procedure bidders submit their technical and financial bids simultaneously in separate envelops. Technical bids are evaluated first and financial bids of only technically qualified bids are opened. The completion period of the said project is 15 months with corresponding a very high estimated cost of Rs 8.7 billion.
However contrary to the allegation, the Authority’s reply stated that the name of Turkish Firm M/S EKO Insaat used in the application actually participated in the bidding process with Pakistani Construction Firm namely M/S Habib Construction Services in Joint Venture (JV), with the shares of 60 percent and 40 percent respectively. The bid evaluation criteria was devised inter-alia with minimum cash flow of requirement of prospective bidder to Rs 2.3 billion (as per JV shares Rs 1.38 billion for foreign company and 0.92 billion for local company), it stated.
NHA said that during the evaluation it was transpired that the cash flow of Turkish firm was negative which reflected very weak financial position of the said firm, lead partner. “In accordance with PPRA Rules 36 (b)(v), NHA evaluated technical proposals and as a result JV failed to qualify following mandatory requirements of bidding document. After evaluation including JV four other bidders were technically disqualified and such bids were not opened publicly,” the reply stated. It further stated that the disqualified JV through an unconcerned citizen namely Farooq Malik was attempting to misguide the court adding that the JV had also approached to the NHA Redressal Grievance Committee which comprised of the officers who are not directly involved in bidding process. The said committee, it stated, also found that the firm was disqualified on technical grounds. A three-member bench headed by Chief Justice Saqib Nisar directed NHA to submit the entire record of bidding process. The bench also issued notices to seven companies, the participants of bidding process, and adjourned the hearing until March 21.
