Peshawar BRT project: Consultancy charges surge from Rs816m to Rs2.362bn

PESHAWAR: Due to delay in the construction of the Peshawar Bus Rapid Transit, the consultancy charges have increased by almost 300% from Rs 816 million to Rs 2,362 million.

The PTI’s flagship project is expected to be completed by the end of this year and final figures will be further increased. The original PC-1 for the BRT project was prepared for around Rs483 million, but, later on, an agreement was signed with the consultant at Rs816 million. The Peshawar Development Authority will pay around Rs1,546 million to the consultant who was paid in dollar and rupee components.

A PDA official told this scribe on condition of anonymity that the consultant’s charges would continue until the project was completed. Due to delay in the construction of the project, the consultant’s charges were continuously increasing. “The consultancy charges can only be raised to 15% under PPRA rules, but the BRT project is being constructed under Asian Development Bank rules.”

The information shared by the PDA under the Right to Information Act 2013 says the consultancy contract with the Mot Macdonald Pakistan is a time-based contract wherein the remuneration is paid on a monthly basis. The consultant has been paid Rs 1,770 million and $3.2 million from November 2017 to January 2022. As such on average, an amount of Rs 41 million has been paid to the consultant on a monthly basis.

“Overall, Rs 2,110 million have already been paid in rupees and dollars till January 2022. The completion date for Hayatabad, Chamkani and Dabgari plazas was June, July and October, respectively,” the PDA said, adding that a loan agreement was signed by the government of Pakistan through the Economic Affairs Division with the government of KP as the prime borrower. The Peshawar Development Authority was the executing agency of civil work only.

According to the data available with this scribe, the original PC-1 for the BRT project was prepared for around Rs 483 million but later on rationalized and an agreement was signed with the consultant on November 3, 2017, of Rs 816 million. The price of the dollar was fixed at Rs 102 for the project.

The Asian Development Bank approved the contract with the MMP Limited (Pakistan) in association with the Macdonald Limited (UKG) of Rs 615 million and $1,977,000 exclusive of all taxes on November 3, 2017. The total amount of both the dollar and rupee components came to Rs 816 million. Subsequently, the contract was extended and revised to Rs 1,789 million and $330,675.11. The total amount of both the dollar and rupee components came to Rs 1,822 million. Similarly, once again the project was extended and the consultant charges were also revised to Rs 1,997 million and $3,582,075.11 in December 2021. The total amount of both the components reached Rs 2,362 million.

Although it was announced that the project would be completed within six months; according to PC-1, the project was to be completed in three years in October 2020. However, the project is still incomplete. The main corridor along with stations was completed, but three parking and shopping plazas are still under construction.

The Local Government Department spokesman told this correspondent that the Peshawar BRT project was awarded in 2017 and deemed to have been completed in nine months. For the same reason, the escalation/rate revision clauses were omitted from the agreement. The contractors couldn’t complete civil works due to multiple reasons. “As the time passed, it became even impossible for the contractors to work on agreed prices due to price escalation. The contractors tried their best to revise prices, but, unfortunately, there was no provision in the contract for price revision. On the other hand, the PDA imposed permanent delay damages which completely eliminated the hope to use the same contractors to finish the work,” he said

The spokesman said a legal and contractual expert was hired to find a way out without legal battles. The expert proposed de-scoping and assignment options and to complete the process, it took almost one year to bring new contractors on board. During the entire process, the technical team to assist the PDA was consultants; they not only amended the design but also backtracked the project when it was toppled entirely in a hopeless situation.

“The initial fee for construction supervision was around Rs 1 billion for a nine-month contract, but since the project prolonged to several months due to the reasons mentioned above, the consultancy fee also increased proportionally on a monthly basis. The project’s unavoidable circumstances were beyond the imagination of the client and provincial government and were never perceived at any stage, hence no one ever got the approval of this cost in PC-1; but, from time to time, revisions and approvals were sought from the competent authority on a need basis,” he said, adding that the consultant cost and project prolongation sufferings were somehow better than litigation and international arbitration, which could have wasted much more money on a nonproductive exercise.