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Rise in Orange Line cost: PAC to take up matter

ISLAMABAD: The Public Accounts Committee (PAC) of the National Assembly has decided to take up the matter of cost escalation in the controversial $1.6 billion Lahore Orange Line Metro Train Project (LOMTP) due to alleged irregularities in cancellation and re-award of its package-II.

The Punjab government cancelled under progress package-II of the project and rewarded to another joint venture of two firms on Oct 16 with additional cost of Rs2.65bn.

“We have decided to take up the case in the PAC as we do not want the rulers to waste public money like monarchs,” Pakistan Tehreek-i-Insaf (PTI) leader and senior member of the PAC Arif Alvi told Dawn on Sunday.

He said not only LOMTP, but both federal and Punjab governments have made almost all development projects controversial apparently to take kickbacks and commission. “Panamagate is a similar case of kickback and commission of Sharifs which we have taken to the Supreme Court,” he added.

Mr Alvi said rulers came into powers through corruption money and after forming their governments they made or mend laws which suited them so that their corrupt practices continued unchecked.

It has been learnt that the initial cost of LOMTP was Rs165 billion with Rs150 billion Chinese loan and Rs15 billion local component. However, the local component is kept escalating earlier due to unplanned land acquisition and now re-award of package-II of the contract. Now it has gone up to Rs28 billion.

The 27-km LOMTP was bifurcated into two packages one is being executed by a firm Habib Construction (HC) while the other was carried out by a Joint Venture of Maqbool and Colson (JVMC). According to LDA Habib has completed 56 per cent of the work while JVMC had done 54 per cent and even it was thrown out.

The MCJV was carrying out Rs26 billion Package-II to lay railway line from Chauburji to Ali Town. Of Rs26 billion contract, it had done Rs18 billion work and Rs8 billion work was left.

However, the Lahore Develop­ment Authority (LDA) has awarded the same remaining work at cost Rs11.39 billion to another joint venture of firm Zahid Khan & Brothers and Reliable, with an additional cost of Rs2.6 billion.

According to Arif Alvi, the PAC has been informed that project was illegally cancelled and awarded to another joint venture on increased rates.

The fresh joint venture has been given a time of four months to complete the remaining work of Package-II. However, the previous contractor had also sought four months time to finish the job.

The PAC has also been apprised that Punjab government itself made the project controversial first by faulty alignment of the railway line that can harm historical sites in Lahore (for which a case is already being tried in the Supreme Court) and second due to cancellation and re-ward of Package-II in a mysterious manner.

The committee has also got information that from the day first Punjab government has failed to clear all sites of package-II as a result the projects is delaying further.

Similarly, the design of the project is said to be faulty as even after award of package-II, Punjab government made some changes in it which was severe violation of Public Procurement Regulatory Authority (PPRA) rules.

The committee also received information that LDA had no sufficient funds available for the project from China Exim Bank thus forced JVMC to have a bridge financial arrangement with Bank of Punjab.

When contacted, LDA spokesman claimed that the original cost of LOMTP will not increase even after increased bid of fresh joint venture ZKB-Reliable.

“As we already have a margin in the total cost of the project because of low bids filed previously, therefore any minimal increase will not affect the actual cost of the project,” he said.

However, the spokesman agreed that the project will be delayed further due to litigation by the JVMC and the authority will not be able to meet its Dec 2017 deadline.

He said the JVMC was removed as it was quite slow and it had no intention to compete the remaining 48 per cent work within stipulated time.

The LDA official expressed dissatisfaction over the role of courts especially in giving stay orders in development works.

Asked about the PAC notice on reward of the contract, the officials said he was not aware of any such move or notice of the PAC.

courtesy : dawn news

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