Audit of Communication Ministry and NHA projects in FY25 reveals misappropriation amounting to over Rs5.29 billion
In a shocking revelation, recent investigations have exposed significant financial irregularities and procedural violations in Pakistan's National Highway Authority (NHA) projects under the Ministry of Communications.
The auditors have highlighted several issues, including improper validation of quantities and payments, lack of engineering estimates, and faulty measurements in Package-1 of the Hakla-DI Khan Motorway. This has led to the payment of Rs511.67 million to contractors due to misapplied rates.
A more glaring discrepancy involves the loss of Rs551.87 million in Package-1, where work was prematurely awarded before acquiring the required land. Another instance of undue benefit, amounting to Rs344.5 million, was given to a contractor by ignoring contract clauses related to progress and milestone penalties.
The project has faced long delays due to land acquisition issues, pushing up costs and causing disruption to the overall CPEC Western Route timeline. Moreover, the NHA initiated construction work on certain packages without necessary planning approval, violating rules under the Planning Commission and the Public Procurement Regulatory Authority (PPRA).
The financial irregularities do not end there. Rs217.2 million was paid for non-scheduled items, which were outside the scope of the original PC-I and were never approved by the competent authority. The tendering process failed to ensure a level playing field and did not reflect prevailing market conditions in another section of the Hakla-DI Khan Motorway project.
Furthermore, the Audit Report 2024-25 discovered over Rs5.29 billion in financial irregularities and procedural violations in the Ministry of Communications and the National Highways Authority (NHA). This includes an unjustified price adjustment of Rs300.8 million, granting contractors price escalations beyond the allowed notification period without verifying if actual cost changes warranted such increases.
The NHA suffered a loss of Rs360.91 million due to irregular bidding practices and flawed escalation calculations in another section of the Hakla-DI Khan Motorway project. Additionally, Rs272.17 million was paid to contractors without the recovery of mobilization funds, reflecting serious lapses in internal controls and contract enforcement.
To address these violations, solutions proposed include strengthening oversight by parliamentary and audit committees, enforcing transparency through public disclosure of contract awards and procurement documentation, ensuring PC-I approval before contract awards, implementing stricter vetting and blacklisting mechanisms for firms with prior disqualifications or irregularities, enhancing capacity-building for procurement officials, and encouraging third-party monitoring and independent audits for all major projects.
These measures aim to improve accountability and procedural compliance in NHA projects and rebuild trust in Pakistan’s infrastructure development sector. The NHA has denied these allegations, particularly regarding the ADB-funded CAREC project, emphasizing that procurement adhered to strict ADB guidelines and prior approvals. However, multiple independent reviews and Senate investigations point to widespread procedural violations.
The financial irregularities in the Hakla-DI Khan Motorway project under the Ministry of Communications extend beyond just misapplied rates and include loss of funds, as Rs551.87 million were lost due to premature awarding of work without acquiring required land in Package-1. Additionally, the industry of finance and business has been impacted by the undue benefit granted amounting to Rs344.5 million to a contractor in Package-1, given without adherence to contract clauses related to progress and milestone penalties.
