ISLAMABAD: The Public Accounts Committee (PAC) has directed Secretary Water Resources to refer the case of change in scope of work of Dasu Hydropower Project (DHHP) to National Accountability Bureau (NAB) as the project’s cost increased by 800 per cent from Rs 4 billion to 36 billion.
According to Rule-20 of PPRA Rules, 2004, “save as otherwise provided hereinafter, the procuring agencies shall use open competitive bidding as the principal method of procurement for the procurement of goods, services and works”. As per Rule-
4 of the same, “procuring agencies, while engaging in procurements, shall ensure that the procurements are conducted in a fair and transparent manner, the object of procurement brings value for money to the agency and the procurement process is efficient and economical”.
As per Para-6.11 of the Manual for Development Projects, “the physical and financial scope of a project, as determined and defined in the project document (PC-I), is appraised and scrutinized by the agencies concerned before submitting it for approval of the Central Development Working Party or Executive Committee of the National Economic Council (ECNEC). Once approved, the executing agency is required to implement the project in accordance with the PC-I provisions. It has no authority to change and modify any approved parameter of the project on its own”.
During audit of accounts of the Project Director (PD), DHPP for the period from July, 2022 to June, 2023, it was observed that PC-I of the project was approved by the ECNEC on March 28, 2014 at a cost of Rs.486.093 billion. Later on, a contract for relocation of Karakoram Highway (KKH)-01 was awarded to M/s China Civil Engineering Construction Corporation on March 16, 2015 at a contract price of Rs. 14.539 billion against PC-I provision of Rs. 13.497 billion with completion period of 564 days i.e. up to February 20, 2017. However, the construction of KKH-01, which was to be used as a bypass for diverted traffic of original KKH to avoid interference in the construction activities of the main works, couldn’t be completed till date. Meanwhile, the contract for civil works was awarded to M/s China Gezhouba Group Co. Ltd. (CGGC) at a contract price of Rs.115.003 billion on March 08, 2017 with planned completion date of January 22, 2023.
The Audit was of the view that in order to avoid interference of open excavation work of KKH-01 with construction activities of the main work, avoid damages of main contractor’s camp and divert public traffic of the old KKH, a VO was issued for re-alignment of the relocated KKH-01 by including seven tunnels and three bridges costing Rs.29.413 billion (equal to 202% of contract price). It is pertinent to mention that no tunnel was included in the scope of original contract for construction of road, therefore, 77% work (tunnels) of the VO was not based on original BOQ, hence, their rates were non-competitive.
Audit held that as the amount of VO was more than the original contract price and scope of work was also changed from open-cut to tunnels & bridges, therefore, issuance of VO of huge amount without obtaining competitive rates as required under PPRA rules and ignoring provisions of PC-I was not justified.
On March 21, 2025, the DAC directed that the matter may be inquired by the committee comprising of Chief Engineering Advisor with a member each from WAPDA and MoWR with the following ToRs: (i) under what circumstances was the VO initiated? ;(ii) why did the consultants not foresee the design and geological issues before the contractor? ;(iii) whether availability of land had any relation with the VO? ;(iv) what would have been cost of land acquired according to the local demand and its comparison with the increased cost of the contract due to non-availability of land ;(v) when the VO price increased more than the original contract then why new bidding process was not initiated and if separate bidding was initiated what implications it would have had on national exchequer ; and (vi) whether the contractor had any previous experience of construction of road having tunnels and bridges.
The management explained that the variation in contract was allowed because of non-possession of land, geological conditions and interference with the main works.
The Principal Accounting Officer (PAO) termed the non-acquisition of land and its subsequent transfer in the name of WPADA by the concerned Provincial Government resulted in the change in scope and design of the project. He was of the view that re-tendering of the project would result in further increase in its cost. He added that inquiry has been ordered in the last DAC held on March 21, 2025.
The Chairman, WAPDA stated that there was a delay of five years in the commencement of the project due to non-settlement of land by the Provincial Government.
The PAC expressed concern over the increase in cost of the project from Rs. 4 billion to Rs. 36 billion and inquired as to why the project was started without possession of land. The Committee observed that the re-designed work was awarded to the same contractor through variation order without taking into account his expertise in the field. The Committee directed the PAO to refer the case to NAB along with requisite record for investigation, fixing responsibility and report to PAC/ Audit within two months.
Ends
