ISLAMABAD/LAHORE: The Capital Development Authority (CDA) violated the Public Procurement Regulatory Authority (PPRA) rules by awarding the contract for the low-cost housing project to the Frontier Works Organization (FWO) at exorbitant rates, revealed the Auditor General of Pakistan (AGP) in the audit report.
The Auditor General of Pakistan (AGP) in the audit report of CDA 2021-22 raised strong objections to the contract award to FWO and revealed that FWO was inexperienced in housing projects. A CDA official on the condition of anonymity informed this scribe that for the development of low cost housing apartments at Farash Town for displaced persons of katchi abadis, beneficiaries of Naya Pakistan Housing and Development Authority (NAPHDA) and for public auction, a summary was prepared and put up in March 2021 during the CDA board meeting by its Member (Estate).
The official further informed that it was discussed during the meeting that in order to accommodate a larger number of families as well as settlement of katachi abadi residents, a new low cost housing scheme namely Model Urban Shelter Project (MUSP) was planned.
The board members were briefed that Frontier Works Organization (FWO) will carry out the construction work and CDA would be the executing agency whereas the formal concept plan has been prepared by the FWO for vertical construction wherein 4,400 apartments were planned on the designated land, allocated for this purpose.
According to the official, the board approved summary of the project and further recommended that the matter may be referred to the Federal Cabinet for seeking approval of the Federal Government through MOI.
The official further informed that later in March 2022, for the construction of Nilore Heights Farash Islamabad, another project of low cost housing at Alipur Farash Islamabad, another summary was presented by CDA member Engineering during a board meeting.
It was told during the meeting that the project was being executed by FWO subsequent to Cabinet decision therein. However, after due deliberation and on the basis of information of the summary, the board endorsed the rates i.e. RS 6950 per SFT as recommendation by the committee against rates claimed by FWO RS 7938.12 per SFT subject to law.
A contradiction also came to the fore when CDA claimed that the said project would be executed by FWO, while on the other hand, NAPHDA claimed in November 2021 that NAPHDA was executing the said project in collaboration with FWO and CDA.
NAPHDA also made the claim that the project will be completed over a period of two years and out of the 4,400 apartments, 2,000 will be allotted to members registered with NAPHDA and out of the remaining apartments, 2000 will be sold out in the open market, while 400 will be allocated for the residents of ‘kachi abadis’. However, NAPHDA made this claim during a briefing given to the former Prime Minister Imran Khan in November 2021.
However, later the Auditor General of Pakistan audited the CDA and objected to awarding the low cost housing project to FWO.
The audit report said that the CDA was granted a one-time exemption by the Cabinet Division to bypass the PPRA rules on the recommendation of the regulatory authority’s board.
It stated that a Memorandum of Understanding (MoU) between CDA, the Naya Pakistan Housing and Development Authority (NPHDA), and the FWO for the execution of the housing project on an Escalation Payment Certificate (EPC) basis was signed on August 4, 2021.
The report stated that CDA’s Special Projects Directorate awarded the project to FWO on EPC basis with an agreed amount of RS 13.4 billion and the completion period of the said project was two years. Interestingly, CDA issued a revised letter of acceptance and increased the EPC from RS 13.4bn to RS 14.7bn.
The audit also revealed that the PC-1 of the project was approved for an amount of Rs15.3bn by the CDA and the Development Working Party (DWP) wherein it was provided that the project would be executed through the FWO.
The CDA and DWP had no mandate to decide whether or not the project would be executed through the FWO, the report said, adding that the FWO did not possess any expertise in housing projects either.
It further observed that the PC-1 was not based on detailed quantities and rates; instead lump sum per square feet cost was provided. The auditor noted that the MoU between CDA and FWO was signed on April 8, 2021, while the exemption from the PPRA rules was granted on April 16. “It showed that CDA took [the] decision in anticipation of the approval.”
As per the audit report, CDA could have gotten better rates had it floated the tender and opted for a competitive process. It recommended a thorough probe into this matter and holding the CDA officials accountable.