TI moves against Rs1.2 bn funding to Nespak for Metro Bus Project

ISLAMABAD: Unjustified payment of Rs1.2 billion to the consultant has been alleged in the mega Rawaalpindi-Islamabad Metro Bus Project. The Commissioner Rawalpindi and Hanif Abbasi, chairman metro bus project monitoring and implementation committee, have been asked by Transparency International to look into the allegation of extraordinary fee (about 2.7 % of project cost) paid to Nespak, the consultant.
The spokesman of Rawalpindi Development Authority Hafiz Muhammad Irfan when contacted said that the Metro Bus project is a transparent project and all the details of the award of tenders have been placed on the official website of the project. He contested the Transparency International’s claim that the cost of the project has increased. He said that the complaint of the corruption watchdog would be taken up seriously and if any discrepancy is found it will be sorted out.
Transparency International in its letter has mentioned that it has received a complaint that extraordinary fee (about 2.7 % of project cost) amounting to over Rs1.20 Billion was paid to Nespak and that due to the wrong feasibility report prepared by Nespak, the estimated cost (Rs44.5 billion) of the project has increased within months by more than 10%, to over Rs50 billion. This figure does not include the cost of Buses’ supply/operation.
The letter says that according to the Rule No 45 (5) Punjab Procurement Rules 2014, Punjab Government, through direct contracting, is allowed to engage any consultant, an organisation owned or controlled by the government, the Federal Government or any other Provincial Government. However, prior approval of the government is necessary for awarding the unsolicited contract, and also that Hanif Abbasi or Commissioner Rawalpindi as head of the Project Team, prior to award of the contract to Nespak should have obtained the approval of the authority to the extent of declaring the project as a complex project, and issued a certificate certifying the reasonability of the negotiated price of consultancy based on the principles of procurement contained in Rule No. 4 Punjab Procurement Rules 2014.
“In projects similar to Islamabad-Rawalpindi Metro Bus Project such as Multan Metro Bus Project, Green Line Metro Bus Project Karachi, the fee quoted by the lowest evaluated responsive Consultant is between 1% to 2% of the estimated cost of the project. In the 18 km Green Line Metro Bus Project Karachi the estimated cost is Rs17 Billion, plus Buses, and the lowest evaluated responsive consultants has quoted about Rs180 million, which is about 1%. Nespak has quoted Rs220 million for the Green Line Metro Bus Project, which is 1.3% of the project cost. TI requests the chairman to look into the complaint and the fee of Nespak shall be rationalised to match the competitive rates prevailing in market, so as to comply with the requirements of Rule 45 of Punjab Procurement Rules 2014, and the overpayment as fee of approximately Rs700 million may also be recovered from Nespak”, the letter concludes.