- Misappropriation detected in project designed to improve urban infrastructure and municipal services
- Contract of KP Cities Improvement Project awarded to an unregistered Turkish company operating through a JV
- PAC takes notice of the allegations, directing all departments to prepare detailed responses to the accusations on Thursday
PESHAWAR: A new scandal involving alleged irregularities worth Rs32 billion has surfaced in Khyber Pakhtunkhwa (KP), following the earlier Kohistan scam. The latest case concerns a development project funded jointly by the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), and the KP government.
According to official documents, the project was designed to improve urban infrastructure and municipal services in Peshawar, Abbottabad, Kohat, Mardan, and Mingora. Under the KP Cities Improvement Project (KPCIP), the contract was awarded to an unregistered Turkish company operating through a joint venture.
At the time of bidding, the company was not registered with the Federal Board of Revenue, the KP Revenue Authority, or the Pakistan Engineering Council. Despite limited progress on the ground, documents reveal that payments amounting to Rs32 billion were released to the company. The funds were reportedly disbursed based on false progress reports, weak monitoring, and alleged collusion among officials, project staff, and consultants.
The documents further allege that the foreign firm evaded taxes, with no record of income tax, sales tax, or withholding tax available. This resulted in significant financial losses to the national exchequer.
Members of the Provincial Assembly — Sajad Ullah, Muhammad Riaz, independent member Taj Muhammad, Munir Hussain Lughmani, and Pakistan Tehreek-e-Insaf’s Muhammad Arif — have written to the Chairman of the Public Accounts Committee (PAC), raising concerns over violations in contract awards, non-compliance with engineering and tax laws, and alleged corruption.
In a separate letter to the Speaker of the Assembly, the lawmakers alleged that the unregistered company was allowed to participate in bidding and awarded major contracts, resulting in unlawful financial benefits to the firm.
The MPAs have demanded a formal inquiry into the illegal payments and urged the relevant authorities to summon officials from KPCIP, the local government department, and project consultants. The letter also recommends referring the case to the National Accountability Bureau (NAB), Federal Board of Revenue (FBR), and other institutions. It calls for holding all officers who approved payments based on allegedly fake or incomplete documents accountable.
In response, Speaker and PAC Chairman Babar Saleem Swati has taken serious notice of the allegations and summoned a meeting on Thursday. The Deputy Auditor General (North), the provincial secretary for communication and works, and the provincial secretary for local government and rural development have been called to attend.
The PAC has directed all relevant departments to prepare detailed responses to the accusations.
