ISLAMABAD: The Senate Standing Committee on Economic Affairs has called on Minister for Economic Affairs, Ahad Khan Cheema, to take decisive action against alleged corruption worth billions of rupees in foreign-funded projects.
Chaired by Senator Saif Ullah Abro, the Committee also directed the Economic Affairs Division (EAD) to formally write to the Asian Development Bank (ADB) regarding a serious violation by the National Highway Authority (NHA) in awarding the contract for CAREC Tranche-III to a disqualified company.
According to official documents, the company in question had previously defaulted on the Rs 6.86 billion Lodhran-Multan project, delivering only 8% of the work while receiving nearly Rs 2 billion in payments. It was disqualified from both the CAREC Tranche-II ADB project and the Yarik-Sagu-Zhob project in October 2022 on charges of fraudulent practices. In its own petition submitted to the Islamabad High Court (IHC), the firm even referred to itself as a “ghost company.” Despite this, the NHA awarded it the Rs 172 billion CAREC Tranche-III project.
The Committee directed EAD and NHA to submit all bidding documents, including experience certificates, completion certificates, work orders, and bank statements of all bidders for the CAREC Tranche-III project.
The Committee also questioned how the legal advisor of the terminated company was appointed as arbitrator in the Lodhran-Multan project and subsequently issued a ruling against the NHA. It sought a full judicial report on this matter and demanded that action be taken against the disqualified firm to prevent it from participating in current and future projects.
Additionally, the Committee asked NHA to submit the tender advertisement issued for CAREC Tranche-III and called for cancellation of the ongoing bidding process and initiation of a fresh one.
Senator Abro reiterated that CAREC Corridor Development Investment Program Tranches II and III had previously been discussed in detail, during which a major breach of rules had been identified. He pointed out that, under ADB’s evaluation criteria, companies with histories of non-performance or pending litigation are ineligible. Nonetheless, NHA favored M/s Ningxia Communications Construction Co., Ltd. (NXCC), which had been previously terminated from the Lodhran-Multan project and disqualified from two CAREC Tranche-II lots worth approximately Rs 18 billion.
It was also disclosed that NXCC had taken the matter to the Islamabad High Court, where it is currently under arbitration. The Committee expressed concern that arbitration should have followed the application of Clauses 63.1, 63.2, and 63.3 of the FIDIC Conditions of Contract before any court decision or NHA board action.
The Committee further criticized the appointment of an arbitrator with apparent conflicts of interest and stated that the NHA should have taken the matter to the Supreme Court instead of settling through arbitration. In its IHC petition, the disqualified company claimed that its role in the project was minimal, with the local partner being primarily responsible for implementation and that it charged only 3% of the project cost.
Senator Abro reminded the Committee that the PPRA General Manager had earlier confirmed that the entire project process must be suspended if a complaint is filed with the Grievance Redressal Committee (GRC). However, NHA continued with the process while revised estimates were still pending CDWP/ECNEC approval.
The Committee unanimously recommended that the Public Procurement Regulatory Authority (PPRA) suspend the project process and asked the NHA to resubmit all required bidding documentation within two days. The information, however, remains outstanding.
Senator Abro noted that the Committee had identified extensive corruption and irregularities in foreign-funded projects across multiple departments in the past 17 meetings. He questioned what steps, if any, the Federal Minister for Economic Affairs had taken in response.
