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219th Meeting, July 24, 2012, Islamabad

NHA Executive Board’s Confirmed Minutes

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NATIONAL HIGHWAY AUTHORITY Secretariat Section

CONFIRMED MINUTES

Subject:- 219th Meeting of the NHA Executive Board Held on

July 24, 2012 at Islamabad 1. Introduction 1.1. The 219th meeting of the Executive Board of the National Highway Authority was held at 1030 hours on Jul 24, 2012 at the NHA Head Office Auditorium, Islamabad. The Chairman NHA Syed Muhammad Ali Gardezi presided. 1.2. All Members attended. List of participants is at Annex-A. 1.3. The meeting commenced with recitation of verses from the Holy Quran and Urdu translation. 2. Opening Remarks - Chairman NHA 2.1. The Chairman extended warm welcome to the participants and thanked them for sparing time for NHA. The last meeting was held on Jun 11, 2012. 2.2. The Chairman greeted Mr Zafar Abbas Lak, IG (NH&MP) on joining the Executive Board as its Member. The Board would definitely benefit from immense experience and knowledge that he brings with him. 2.3. The Chairman intimated that the Member (Construction), Mr Aurangzeb Khan superannuated wef Jul 6, 2012 and in his place Mr Yousaf Ali Khan has been appointed. Previously, two Members (Construction) were positioned for the projects in North & South but henceforth there would be only one Member (Construction). 2.4. The Chairman also provided an update on the status of BOT concession for upgradation of 4-lane Karachi - Hyderabad Super-highway into 6-lane Motorway (M-9). The Concessionaire viz M/s Bina Puri Pakistan (Pvt) Ltd was to achieve financial close within 6 months ie by Jul 16, 2012 with a grace period of 45 days. The Concessionaire, having failed to achieve this target within the given date, has sought six months extension. The Concessionaire has, however, submitted project design and attended to some other requirements.



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2.5. M/s Bina Puri has been informed that the arguments put forward by them for grant of extension such as global financial situation, law & order status in Pakistan, traffic disruption on M-9 and delay in RoW acquisition are not convincing enough. The global financial situation and law & order in Pakistan remain more or less the same as was the case prior to processing and signing of the BOT concession. Moreover, M-9 has not encountered any traffic disruption. Mutation of land in NHA’s favor is also more than 90% complete and the minor remaining land acquisition pertained to interchanges only and this is also in final stage. None of these issues could have hindered achievement of financial close, as contended. 2.6. The request of M/s Bina Puri for extension of date for financial close has, therefore, been regretted. Alongside, they have been asked to furnish details of the efforts made by them for achieving the financial close, as NHA expected at least approval from the banks for committing finances for construction of M-9, whereas, actual funds could be released at a later stage. 2.7. The JS (MoC) remarked in case M/s Bina Puri ultimately fail to achieve the financial close and NHA is compelled to terminate the concession agreement, it should be ensured that the matter is very wisely handled & that no claims accrue against NHA. The Chairman appreciated the suggestion and stated that NHA is fully alive to the situation. To ensure that NHA’s response is legally defensible, the Authority’s legal counsel and the Head IPDF (Infrastructure Development

Facility) were also consulted before sending the same to M/s Bina Puri. 2.8. The Chairman, dilating upon funding status, remarked that NHA was expecting release of additional funds / supplementary grant for its projects prior to close of FY 2011-12 but neither funds were made available by the GoP nor the loans expected from the Governments of Khyber Pakhtunkhwa and Balochistan materialized. However, NHA’s PSDP allocation of Rs 50.727 billion (Rs 26.124 billion

FCC and Rs 24.602 billion LCC) for 2012-13 is quite sufficient and the first tranche for this year is expected to be released soon.



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2.9. The Chairman, however, observed that project-wise allocation might be problematic. If certain projects were not moving at the desired pace but funds are released, NHA would not be able to divert funds for projects showing fair progress. Therefore, NHA is trying to convince the Planning Commission to review the decision regarding project-wise release of funds; however, NHA would ensure that each province gets funds equal to its allocation for FY 2012-13. 2.10. The Chairman stated that in a recent Board meeting, the worthy Additional Finance Secretary had pointed out that it was of no use if the Annual Maintenance Plan is presented at the end of the financial year. In deference to the Board’s desire, the AMP 2012-13 has been prepared at priority and will be presented in today’s meeting. With implementation of this plan and simultaneous commencement of Flood Emergency Rehabilitation Projects (FERP), the overall situation of NHA network in various regions would be considerably improved. 2.11. The Chairman added that since the condition of NHA roads in Sindh is worst, NHA would be according special attention to that province. The fact that work on JICA assisted Sehwan - Ratodero ACW Project (N-55) and the ADB assisted Sukkur - Jacobabad ACW Project (N-65) is moving at quite a brisk pace will also help improve overall situation of NHA network in Sindh. 2.12. The Chairman also talked about GMs Coord Conference; which was also witnessed by the Minister and Secretary MoC, held on Jul 12, 2012. The aim was to emphasize upon all Regional GMs that the roads need to be maintained at an optimum level to bolster NHA’s image as a developer & custodian of national highway network and that any compromise on quality and output would not be tolerated. 2.13. The Chairman added that Monitoring Teams headed by reputed officers of caliber were constituted for overseeing operation & maintenance activities of each region and based on their feedback various corrective actions have been taken. One key decision taken during GMs Coord Conference was that tenders for all procurements will be issued on the 1st Thursday of each month and opened on the last Thursday of the month. On both occasions, the Head or a Member of the Monitoring Teams would be essentially present.



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FORMAL BOARD PROCEEDINGS 3. Agenda Items 3.1. The Secretary NHA stated that 16 x working papers were distributed in two volumes on Jul 10 & 20, 2012 respectively. Subject-wise distribution is as follows:-

Matter No a. Minutes 2 b. Award of Works 4 c. Policy Issue 1

d. Revised PC-I 2

e. AMP 1

f. Toll Issues 2

g. Financial Issue 1

h. Admin Issues 3

Total 16

3.2. The Secretary NHA added that working papers on the following subjects would be tabled as additional agenda items, if permitted by the Board:-

A1. NHA’s Composite Schedule of Rates (CSR)-2011 (Presentation by GM-Design)

A2. Issuance of Tender Documents to National Logistic Cell (NLC) for NHA Projects

A3. Bahawalpur Toll Plaza : Relief in payment of monthly installments due to financial losses

3.3 The Chief (T&C) remarked that it is desirable if instead of a presentation, a formal working paper is circulated with the agenda for the next Board meeting on Item “A1”. 3.4. At the end of meeting, working paper for only Item “A2” was presented and discussed because of paucity of time.



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4. Agenda Item 1

Confirmation of Minutes - 217th Meeting of the Executive Board Held on Jun 4, 2012

4.1. The Secretary NHA solicited confirmation of minutes of the 217th Executive Board meeting held on Jun 4, 2012 conveying that the same were circulated on Jul 10, 2012 and no written comments / observations have been received from any Member. 4.2. Minutes were confirmed with some amendments suggested by the Chief (T&C). Decision 4.3. The Executive Board confirmed minutes of 217th meeting held on Jun 4, 2012 with following amendments:-

a. In opening remarks, Para-2.6, line 6:-

For: It was jointly decided by the Dy Chairman Planning Commission & the Minister for Finance that only

Read: It was decided by the Annual Planning Coordination Committee that only

b. In opening remarks, Para-2.7, line 5:-

For: NHA will have the authorization to re-appropriate funds from

Read: NHA will now be required to re-appropriate development funds as per laid down procedure from

c. In Agenda Item 2 titled “Amicable Settlement of

Dispute: Termination of Contract of Lowari Tunnel Project (LTP),” Para 5.26 (b):-



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For: Basis and detail of escalation predicted for next 5 years and average past projection of escalation.

Read: Basis and cost of escalation required for balance work over the proposed future time frame and average trend of past escalation paid so far.

Action By : Secretary NHA 5. Agenda Item 2

Confirmation of Minutes - 218th (Special) Meeting of the Executive Board Held on Jun 11, 2012

5.1. The Secretary NHA solicited confirmation of minutes of the 218th (Special) Executive Board meeting held on Jun 11, 2012 conveying that the same were circulated on Jul 10, 2012 and no written comments/observations have been received from any Member. 5.2. Minutes were confirmed with one amendment. Decision 5.3. The Executive Board confirmed minutes of 218th (Special) meeting held on Jun 11, 2012 with following amendment in Agenda Item 2 titled “Amicable Settlement of Dispute: Termination of Contract of Lowari Tunnel Project (LTP),” Para 3.13 (b):-

For: Basis and detail of escalation predicted for next 5 years and average past projection of escalation.

Read: Basis and cost of escalation required for balance work over the proposed future time frame and average trend of past escalation paid so far.

Action By : Secretary NHA



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6. Agenda Item 3 Award of Works: Improvement / Rehabilitation of Old GT Road in Renala Khurd (Km 0+000 to 3+787.95)

Introduction - Working Paper 6.1. Directive / Deposit Work.

a. Subject project is based on Prime Minister’s Directive No 2624-A sent by the PM’s Sectt on Mar 9, 2011.

b. Project entrusted to NHA for implementation as

“deposit work” vide PM’s Sectt (Public) UO No PMDIR /2141/DS(Imp)/PAW/10 dated Nov 2, 2011,

6.2. Scope of Work (3.788 km).

a. Typical x-section (in fill):-

Width Meter i. Carriageway : 7.3 ii. Shoulders (both sides) : 2.5

b. Following layers have been recommended to be laid

over existing pavement layers:-

Pavement Layer cm i. Asphalt Wearing Course : 5 ii. Asphalt Base Course : 8 iii. Water Bound Macadam (WBM) : 25

c. In sections (urban area) where pavement has been washed away or is deteriorated at least 15 cm thick sub-base will be provided prior to lying of WBM.

6.3. Source of Funding/PC-I/Engineer’s Estimate.

a. The Prime Minister has approved provision of Rs

99.982 million as per cost estimates prepared by Pak PWD. As the project is a deposit work, the Cabinet Division will release this amount to NHA from PWP-II of PSDP.



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b. The Executive Engineer, Project Civil Division, Pak PWD, Sahiwal is responsible to provide the approved PC-I, which is awaited.

c. Estimated cost is Rs 98,735,315/- (CSR 2009 + 9.1%)

excluding Bill No 7. 6.4. Pre-qualification/Tendering Process.

a. PQ notice was published in press and uploaded on NHA & PPRA websites on Feb 16, 2012. Twenty two (22) firms applied and twelve (12) fulfilling the given criteria qualified.

b. Invitations for bid were issued to the pre-qualified

firms. Eleven (11) firms purchased the bidding documents but only five (5) submitted technical and financial bids on scheduled date viz Apr 12, 2012.

6.5. Summarized Status.

Messers’ Qualified Documents

Purchased Bid

Submitted a. CALSONS b. Chaudhry -- c. FWO -- d. Luqman e. NKC -- f. RMCC g. SKB h. Sachal -- -- i. SARCO-SIAC (JV) j. SCC -- k. SMC -- l. Usmani --

Messers’ Legend

a. Ch Abdul Latif & Sons CALSONS b. Chaudhry Construction Chaudhry c. Frontier Works Organization FWO d. Luqman Brothers Construction Co Luqman e. Nisar Khan & Co NKC

f. RMC Construction Co RMCC g. Saadullah Khan & Brothers SKB h. Sachal Engineering Works Sachal i. SARCO – SIAC (JV) SARCO-SIAC (JV) j. Standard Construction Co SCC k. Sultan Mahmood & Co SMC

l. Usmani Associates Usmani



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6.6. Bid Opening. Bids were opened on Apr 12, 2012 by the Bid Opening & Evaluation (BO&E) Committee constituted in accordance with NHA Code in the presence of the bidders’ Reps. 6.7. Financial Bids. Financial bids of qualified bidders were opened in the presence of BO&E Committee on the same day. Following comparative position emerged vis-à-vis the Engineer’s Estimate of Rs 98,735,315 (CSR-2009 + 9.1%) on all Bills except Bill No 7:-

Lowest Ranking

Contractor (M/s) Announced

Bid (Rs) Corrected Bid (Rs)

Variation

1st RMCC 123,231,715 123,231,715 +24.81% 2nd CALSON 133,880,764 134,029,264 +35.75% 3rd SARCO-SIAC (JV) 144,522,958* 144,522,958 +46.38% 4th SKB 158,778,523 158,778,523 +60.81% 5th Luqman 169,324,562 169,324,562 +71.49%

* Note. After 2 % rebate. Original bid was Rs 147,431,590. 6.8. Recommendation. The Tender Acceptance Committee has recommended award of works to the lowest bidder M/s RMCC. 6.9. Deliberations Concerning Financial Constraints.

a. Allocation of funds for this deposit work is Rs 99.982 million but the lowest bid is Rs 123.231 million. Therefore, Letter of Acceptance shall be issued to the lowest bidder as per available funds only.

b. A Letter of Intent was issued to M/s RMCC about the

funds constraint and consequent reduction in scope of work up to Rs 90 million. Balance Rs 9.982 million to be kept for establishment and supervision.

c. M/s RMCC submitted an undertaking not to make

any cost claim on NHA against the reduced scope of work and cost.

6.10. Proposal. NHA Executive Board is requested to approve:-

a. Award of work for “Improvement / Rehab of old GT Road in Renala Khurd (Km 0+000 to 3+787.95)” to the lowest bidder M/s RMCC for Rs 123,231,715/-.



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b. The Letter of Acceptance for reduced scope of work limiting the contract price upto Rs 90 million will be issued initially and scope will be enhanced to original level on availability of balance funds.

Board’s Deliberations 6.11. The Member (Planning) presented details. 6.12. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Planning Wing in respect of each observation is at Annex-B. 6.13. The AS (Finance) observed that instead of piecemeal implementation, it is desirable if the total funds are arranged now and the project constructed in toto so that no escalation / litigation issues are encountered. Moreover, it also needs to be explained as to how the scope of work will be reduced. 6.14. The Chief (T&C) made the following observations:-

a. Piecemeal implementation implies that the PM’s

directive has not been properly followed and fully obeyed. The scope be reduced only if the PM’s Secretariat is informed and consent obtained.

b. Why the single stage two envelopes system, which

had proved quite successful in securing competitive bids, was not followed in this case? NHA should not be influenced by the contractors who pursue their own motives / benefits.

c. Since the PC-I is still awaited from Pak PWD, it

should be ensured that the road is constructed according to NHA specifications and not the PWD specifications, which are less.

6.15. The Member (Planning) clarified that an undertaking has been obtained from the contractor regarding reduction in scope of work due to non-availability of full funds and that no complications in this regard are envisaged. The scope has been reduced by decreasing the project length proportionate to the availability of funds.



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6.16. The Chairman stated that project scope will be enhanced as soon as balance funds are received. He clarified that NHA is receiving numerous instructions regarding execution of projects initiated by different MNAs / Senators and in each case the political dignitary is requested to arrange funds otherwise NHA would not be able to implement their scheme. 6.17. The Chairman added that in this case too, the MNA concerned has been taken on board and advised to pursue the case for provision of balance funds with the relevant quarters and he is already working on this issue. He also quoted the example of Okara Bypass Interchange Project where the scope has been reduced from Rs 297 million to Rs 21 million for an already awarded project because of non provision of requisite funds. 6.18. The Chairman also stated that the observation that NHA should not be influenced by the contractors during the procurement process is very valid and all possible measures are being taken to ensure transparency, fair-play and maximizing competition. 6.19. The Chief (NTRC) enquired as to who will approve the PC-I once it is finalized by Pak PWD. The Member (Planning) clarified that the tendered price will be communicated to Pak PWD Sahiwal for processing of the PC-I through their prescribed channels as is done for all deposit works. 6.20. Matter was discussed and cleared. Decision 6.21. The Executive Board approved award of work for “improvement / rehabilitation of old GT Road in Renala Khurd (Km

0+000 to 3+787.95)” to the lowest bidder M/s RMC Construction Company at their quoted price of Rs 123,231,715/- (Rupees one hundred & twenty three million, two hundred & thirty one thousand, seven hundred & fifteen) only; which is +24.81% the estimated cost of Rs 98,735,315/- (CSR-2009 + 9.1%) on all Bills except Bill No 7. 6.22. In the initial phase, the scope of work would be limited to the contract price upto Rs 90 million and will be enhanced to original level at a later stage on availability of balance funds. Action By : Member (Planning)



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7. Agenda Item 4 Review/Settlement of Frequent Issues Pertaining to “Form” of Bid Security & Performance Security During Procurement of Works

Introduction - Working Paper 7.1. Bid Security. It is kept to ensure seriousness of bidders during the bid validity period and for small period ahead (usually 28

days) as a mandatory part of all procurements. It can be furnished by the bidders in following customary formats:-

a. Deposit at call. b. Bank guarantee issued by a scheduled bank in

Pakistan. c. Insurance bond issued by an insurance company at

least having “AA” rating from PACRA/JCRA.

Note. Another form known as “Bid Securing Declaration” is also used as an option in foreign funded projects.

7.2. Performance Security. It is also mandatory part of all procurements kept to ensure performance of contractors during project execution. It can also be provided by the contractors in the customary formats described in “a” to “c” above. 7.3. Executive Board’s Decisions. The issue of “Form” of bid and performance securities had been deliberated by the Board on several occasions since Sep-2009:-

a. The acceptance requirement of bid / performance securities was reduced from “AA” rated insurance companies to “A” including “A+”, “A-”, “A” & “A1” but reinsurance arrangement from “AA” rated companies (Ref: Executive Board’s 178th meeting of Sep 5, 2009).

b. The decision was reviewed and NHA did not allow

securities of even “AA” rated insurance companies and restricted the bidders for securities/ bonds only from scheduled banks of Pakistan on NHA’s panel (Ref: Executive Board’s 201st meeting of Jan 20, 2011).



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c. The CAP (Contractors Association of Pakistan) agitated the

decision at “b” above pleading that it was against PEC (Pakistan Engineering Council) Guidelines; which NHA is bound to follow. APCA (now CAP) also moved the court-of-law against NHA’s decision (Ref: Executive

Board’s 202nd meeting of Mar 17 & Apr 4, 2011). 7.4. Preference of Bidders and NHA.

a. Bidders/contractors prefer to submit insurance bond mostly issued by insurance companies having “AA” rating being less costly.

b. NHA & most other employers prefer bank guarantee

for both bid and performance securities because of better encashment mechanism. However, due to codal / legal requirements and, at times, to ensure competition in bidding process, the employers accept insurance bond as well.

7.5. Points for Consideration.

a. NHA may devise a uniform and consistent policy in procurement process regarding acceptable “Form” of bid and performance securities after getting all stakeholders on board. The policy should not be fragile and discriminatory and proper legal cover be made available once the policy is finalized.

b. The Rules of PPRA, PEC & NHA Code be harmonized

in the light of current bidding trends, bidders’ attitude, prevailing practices / tactics of bidders, procedural shortcomings and the lessons learnt while implementing applicable procurement rules.

c. The principles of procurement process may be

revisited while keeping in consideration the best interest of biggest stakeholder of procurement ie ‘Public.’ PPRA Rules should be deliberated and commented in a legal manner.



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d. If Executive Board agrees to proposed amendments

in clauses of PEC standard bidding documents pertaining to bid & performance securities, matter may be taken up with PEC officially for resolution.

7.6. Rule Position.

a. PPRA Rules, 2004 are applicable on NHA for procurement of goods, works & services and are also part of NHA Code (Ref: Chapter 3, NHA Code 2005, Vol-I).

b. NHA Code also specifies that PEC bidding documents

approved by ECNEC shall be used for procurement of goods, works and services.

c. ECNEC on Nov 12, 2007 decided that PEC standard

bidding documents shall be applicable to procurement of all engineering goods, works and services and that the federal, provincial departments / organization and district governments will be responsible to implement this decision.

d. Implementation of PEC bidding documents has also

been emphasized by P&D Division, PEC and MoC from time-to-time.

7.7. Current Scenario.

a. The CAP in a meeting held with Secretary (MoC) on Feb 13, 2012 raised the conflict in bidding documents recommended by PEC & those prepared by NHA (P&CA Section) with special reference to provision of insurance guarantee.

b. Follow-up meeting was held between NHA and CAP

on Mar 1, 2012 and, subsequently, clarifications were sought from PEC on Mar 27, 2012 regarding “Form” of bid and performance securities for single stage two envelope bidding process.



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c. The PEC on Apr 9, 2012 clarified as under:-

i. Bid security for single stage two envelope bidding can be submitted at the option of the bidder including at least “AA” rated insurance company.

ii. In case of performance security, Clause-10.1 of

the Particular Conditions of the Contract (CoC) allows performance security from insurance companies also. Specific provision in particular conditions supersedes any similar provision either in general conditions or instructions to bidders or bid data sheet.

iii. If the employer finds any contradiction between

instructions to bidders or CoC then priority will be those of harmonized document and such anomalies be brought to the notice of PEC for clarification.

d. It is mandatory for NHA to comply with the PEC

Guidelines which now allows insurance bond from “AA” rated insurance companies both for bid and performance securities. The earlier decision of NHA Executive Board (201st meeting of Jan 20, 2011) needs to be reviewed.

7.8. Proposal. NHA Executive Board is requested to review the matter and revisit its earlier decision (201st meeting of Jan 20, 2011). Board’s Deliberations 7.9. The Member (Planning) presented details. 7.10. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Planning Wing in respect of each observation is at Annex-C. 7.11. The VP-NESPAK observed that although NHA has to follow PEC Guidelines but it should keep on fighting for review of these instructions and seek deletion of insurance bond from the list of admissible securities.



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7.12. The Chief (NTRC) remarked that the PEC is allowing insurance bonds rendered by 4 to 5 “AA” rated insurance companies and NHA may follows these instructions. 7.13. The AS (Finance) opined that NHA has not made any particular recommendation for consideration by the Board in the working paper. As to what specific decision NHA is recommending and for what reason be elaborated. 7.14. The Member (Finance) responded that the Board while deliberating on this subject (201st meeting of Jan 20, 2011) directed NHA not to accept securities of even “AA” rated insurance companies and to restrict the bidders for securities/ bonds only from scheduled banks of Pakistan to cover and safeguard risk of NHA’s construction & maintenance projects. However, the CAP is agitating the decision being against PEC Guidelines. 7.15. The JS (MoC) remarked that the Reps of CAP visited MoC and pleaded that the Board’s decision is in contradiction to the provisions of PEC Guidelines; which should be followed. He observed that if submission of insurance bond is restricted to 4 or 5 “AA” rated insurance companies not much complications are envisaged. 7.16. The AS (Finance) observed that the aim is to minimize financial risk. If NHA feels that sufficient risk is not covered, one odd item out of the available options for submitting security can be considered for exclusion. 7.17. The Chairman explained that restricting the bid security to bank guarantee would amount to restricting healthy competition as the contractors react by creating cartels. However, for mobilization advance, security in the shape of bank guarantee only is accepted. 7.18. The JS (MoC) enquired as to what procedure is followed for verification of bid securities. 7.19. The Member (Finance) responded that guarantees are issued by the branches of the banks. Verification is sought from the bank’s head office; which have designated and empowered authorized signatories to render the required confirmation.



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7.20. The matter was cleared after detailed discussion. Decision 7.21. The Executive Board revisited its decision taken in the 201st meeting of Jan 20, 2011 and authorized NHA to accept insurance bonds issued by an insurance company at least having “AA” rating from PACRA / JCRA for bid & performance securities. 7.22. For provision of mobilization advance, NHA will only accept bank guarantee issued by a scheduled bank of Pakistan. 7.23. The Board, however, advised NHA to keep on persuading the PEC to disallow acceptance of insurance bonds for bid & performance securities for better risk management of NHA’s projects and schemes. Action By : Member (Planning) 8. Agenda Item 5

Revised PC-I of Makran Coastal Highway Project (MCHP, N-10)

Introduction - Working Paper

8.1. Introduction - Makran Coastal Belt.

a. Pakistan has about 1200 km long coastal belt along Arabian Sea. Portion from Hub in Balochistan upto Jiwani is called “Makran Coastal Belt.”

b. The Makran Coastal Highway Project (MCHP) was

conceived as an all-weather link for Makran Coast.

c. MCHP provides an all-weather road to serve the population of Makran Coastal Belt and facilitates communication & trade by linking Karachi with Ormara, Pasni, Gwadar and Jiwani Ports.



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d. Aim was to provide basic amenities to the people living in far-flung coastal areas; boost up economic activity and connect Karachi with Gwadar Port.

8.2. Introduction - Makran Coastal Highway (N-10).

a. MCHP starts from Shaikh Raj, approx 105 km north of Karachi on RCD Highway (N-25), and ends at Gabd near Pakistan-Iran border.

b. MCHP in the long run will also cater for traffic from

Iran, Gulf and Central Asian Republics & facilitate international trade.

8.3. Project PC-I.

a. NHA carried out design & feasibility studies in 1993-94 at an estimated cost of Rs 11.442 billion.

b. PC-I was updated on CSR-2000, with revised value of Rs 15.01 billion (Rs 11.498 billion LCC & Rs 3.511 billion

FEC). ECNEC approved it on May 3, 2001. 8.4. Construction Packages. For construction & management purposes, MCHP was bifurcated into four sections:-

Sect Route Km Start Completion I. Lyari-Ormara 249.75 Jul-2000 Jun-2003 II.

Ormara-Pasni

Sub-section-I 50.96 Jan-2003 Dec-2004 Sub-section-II 51.12 Jan-2003 Dec-2004 Sub-section-III

50.03 Jan-2003 Dec-2004

III. Pasni-Gwadar 137.20 Feb-2002 Feb-2004 IV.

Gwadar - Jiwani - Gabd

Gwadar - Pleri - Jiwani 67.80 Apr-2006 Sep-2008 Pleri - Gabd 42.39 Jan-2007 Jun-2011



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8.5. Variations. Rs in Million

Section Contract Financial Impact

Revised

a. Lyari - Ormara 3906.372 981.016 4797.388

b. Ormara – Pasni 2146.601 478.774 2625.375

c. Pasni – Gwadar 2888.761 (-) 247.162 2641.599

d. Gwadar - Gabd 3508.804 (-) 353.004 3155.800

Total 12450.538 769.624 13220.162

8.6. Improvement and Rehabilitation Works. Rs in Million

Section Contract Saving Revised a. Lyari - Ormara (Pack-I) 374.258 (-)18.708 355.55 b. Ormara - Pasni (Pack-II) 506.89 (-)305.131 201.759 c. Two Minor Bridges 81.471 (-)1.247 80.224

Extension of Phor Nai Bridge

d. Phase-I 251.001 +9.037 260.038 e. Phase-II 90 -- 90 Total 1303.62 (-)316.049 987.571

8.7. Land Acquisition Provision : Original & Revised PC-I. Rs in Million

Sec Route Original Revised I. Lyari-Ormara 20.710 142.00 II. Ormara-Pasni 15.734 175.00 III. Pasni-Gwadar

17.855 728.80

IV. Gwadar - Jiwani - Gabd Gwadar - Pleri - Jiwani 120.00 Pleri - Gabd 70.00

Total 54.299 1235.80 8.8. Summarized Comparison of Scope/ Cost. Rs in Million

Section Original PC-I Revised PC-I Executed Proposed

a. Lyari-Ormara 5287.926 6247.436 b. Ormara-Pasni 3952.544 3377.569 1697.00 c. Pasni-Gwadar 2791.687 3673.040 1771.468 d. Gwadar-Gabd 2977.210 4065.279

Sub Total 17363.325 3468.468 Gross Total 15009.367 20831.793



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8.9. Financing : Year-wise PSDP Allocation. Rs in Million

F/Year Allocation Utilization a. 2001-01 300 201,221 b. 2001-02 2,000 1,387.421 c. 2002-03 3,000 4,993.650 d. 2003-04 2,350 4,039.199 e. 2004-05 2,500 1,525.882 f. 2005-06 1,500 640.511 g. 2006-07 1,125 1,078.877 h. 2007-08 1,800 1,095.626 i. 2008-09 1,000 1,094.130 j. 2009-10 500 682.332

16,075 14,738.849 8.10. Other Costs / Project Life.

a. Annual recurring operation/ maintenance cost (pkm):-

Section Rs in M i. Lyari – Ormara 0.214 ii. Ormara – Pasni 0.200 iii. Gwadar – Pak Iran Border (Jiwani) 0.276

b. Periodic maintenance cost is same as above.

c. Pavement life is ten years and structures 50 years.

8.11. Proposal. The Executive Board is requested to recommend the revised PC-I of MCHP (N-10) to CDWP/ECNEC for approval by endorsing any one of the following options:-

a. Revised PC-I costing Rs 20.832 billion. It entails +38.79% variation vis-à-vis the approved PC-I cost of Rs 15.009 billion.

OR

b. Revised PC-I costing Rs 17.363 billion by deleting additional works of Rs 3.469 billion to be carried out at a later stage through a separate PC-I considering the paucity of funds and law & order situation along the project area. It entails +15.68% variation vis-à-vis the approved PC-I cost of Rs 15.009 billion.



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Board’s Deliberations 8.12. The Secretary NHA introduced the proposal with remarks that the Executive Board had decided (201st meeting of Jan 20, 2011) to get the revised PC-I of MCHP and related aspects scrutinized through a Sub-committee of the Board comprising Senior JS (MoC), Chief (NTRC) and VP-NESPAK. However, the Sub-committee could not make any headway because two incumbents of the post of Senior JS (MoC) were transferred and 2 x Chief (NTRC) retired within a short span of time. 8.13. Matter is awaiting finalization since Jan-2011. Meanwhile, cost of the PC-I has been rationalized from Rs 20.832 billion to Rs 17.363 billion. Therefore, the JS (MoC) has opined that it is desirable if the issue is reviewed afresh by the Executive Board.

8.14. The JS (MoC) added that due to delay in finalization of the revised PC-I, certain Audit Paras of MCHP, likely to be soon debated by the PAC, are awaiting disposal. 8.15. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Construction Wing in respect of each observation is at Annex-D. 8.16. The GM (MCHP) presented details. In response to various queries, he stated that the expenditure so far incurred on MCHP is less than Rs 15 billion, as explained below:-

Description Rs in M a. Total Work Done 13,424.923 b. Escalation 933.987 c. Consultancy Cost 116.495 d. Land Acquisition 175.025 e. Utilities Re-location 5.463 f. Establishment 290.592 Total 14,946.485

8.17. The GM (MCHP) further conveyed that major contributory factors for revision in cost are:-

a. Increase in land acquisition cost from Rs 67 million to Rs 1,236 million (+8.24% of total original PC-I cost).

b. Increase in other costs / scope is Rs 1117 million

(+7.44% of original PC-I cost).



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c. Total increase from original PC-I is Rs 2,353 million

ie +15.68%. 8.18. The GM (MCHP) added that the cost of the revised PC-I has been rationalized by deleting following additional works, but, he would request that the matter may be reconsidered and these works also recommended because of their importance:-

Sec Routes Rs in M I. Ormara-Pasni

Basol River remedial works 272.800 Shadi Kaur Bridge works & road realignment 1424.200

II. Pasni-Gwadar

36 km re-alignment of MCH required by GDA/ Govt of Balochistan

1771.468

Total 3468.468 8.19. The JS (MoC) remarked that an independent PC-I may be processed for the additional works. 8.20. The Chief (T&C) observed that the additional works of Section-I are of important / sensitive nature & can not be overlooked. He would, therefore, recommend inclusion of additional works in the revised PC-I for the matter to be decided by CDWP / ECNEC. 8.21. The AS (Finance) observed that constructing MCHP very close to coastline in areas prone to flash floods perhaps was not a wise decision. Since it is essential that MCHP always remains operational at all times, it is desirable if additional works required for the purpose are undertaken expeditiously. 8.22. The Chairman provided details of various ongoing projects on Gwadar - Turbat - Hoshab (M-8), Hoshab - Panjgur - Nag - Basima - Sorab (N-85) and Khuzdar - Ratodero (M-8) and stated that all these projects are lingering on for the past quite some time but completion is not in sight. Work on Gwadar - Turbat - Hoshab (M-8) and Hoshab - Sorab (N-85) is suspended for the past around 3 years because of security challenges and paucity of funds. Prudence demands that no additional works be committed on MCHP till completion of ongoing linkages for Gwadar Port.



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8.23. The VP (NESPAK) added that damages on coastal roads do occur and since traffic on MCHP is moving and occasional disruptions because of abnormal rains, flash floods and cyclones are not for lengthy durations, the additional works can be attended to separately. 8.24. After lengthy deliberations, the PC-I was recommended for approval without additional works. Decision 8.25. The Executive Board recommended the revised PC-I of Makran Coastal Highway Project (N-10) costing Rs 17.363 billion to the CDWP/ECNEC for approval. It entails +15.68% variation vis-à-vis the approved PC-I cost of Rs 15.009 billion. 8.26. The Board decided that the additional works of Rs 3.469 billion, as detailed in Para-8.18 above, will be carried out at a later stage through a separate PC-I considering the paucity of funds and law & order situation along the project area or through a second revision of this PC-I at an appropriate time. Action By : Member (Construction) & Member (Planning) 9. Agenda Item 6

Award of Toll Plazas Through Negotiated Tendering Introduction - Working Paper 9.1. Preliminary Facts.

a. Under Section-10 of the NHA Act, 1991 (amended 2001)

NHA is empowered to levy and collect toll tax; which is the main sources of revenue generation for maintenance of the national highway & motorway network. NHA has installed a number of toll plazas on various sectors of its network to collect revenue from the commuters to provide smooth and hazard free traffic flow.



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b. Upkeep and maintenance of NHA network require a source of continuous funding based on international highway safety standards. To coup with continuous expanding requirements, it is imperative to improve upon this source of revenue generation by bringing un-tolled roads to toll network. This on the one hand will meet future funding requirements, and, on other, inculcate a tolling culture.

c. Although, the masses in general have accepted toll as

a necessity for using a well maintained road, still in certain cases severe public resentment was encountered. These included following locations:-

i. Pabbi Toll Plaza (N-5), District Nowshera, KP. ii. Jand Toll Plaza (N-80), District Attock, Punjab. iii. Mansehra Toll Plaza (N-35), KP.

9.2. Pabbi Toll Plaza (N-5), District Nowshera, KP.

a. NHA previously attempted to install a toll plaza at

this point in the year 2000 through NLC, but could not succeed due to severe public resentment.

b. Local surveys & consultations indicate severe

resistance from local commuters and inter-regional transporters, if any such attempt is made again. It is considered advisable to adopt a pragmatic result oriented approach for generating toll revenue.

c. Tentative reserve price based on 1 day traffic count is

Rs 161.1 million per annum. 9.3. Jand Toll Plaza (N-80), District Attock, Punjab.

a. Previous two attempts made in 2004 & 2006 to install a toll plaza at this point attracted severe public agitation.



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b. Matter cannot be left unattended and there is a need to engage local influential’s who could mange public sentiment to avoid / minimize resentment.

9.4. Mansehra Toll Plaza (N-35), KP.

a. This toll plaza established in Mar-2000 was initially run by FWO but, subsequently, handed over to the District Govt, Mansehra (DGM) on 30% sharing basis. In 2004, the DGM, on expiry of term contract, sought enhancement of its share to 50% of the net income and also proposed withdrawal of enhancement in toll rates at this point.

b. Negotiations with DGM were not fruitful and NHA

awarded the toll O&M contract through open bidding. However, the law & order situation worsened resulting in murder of a Police officer, while one other suffered serious injuries.

c. NHA agreed to re-fix the DGM share as 50%, but the

demand to withdraw enhancement in toll rates was not endorsed by the Executive Board on Aug 24, 2008. The Board also directed to relocate the toll plaza at a place where such like situation could be avoided in future.

d. The DGM went into litigation against NHA and toll

operation could not re-commence. The Civil Court Mansehra granted status quo against establishment of toll plaza and the matter remained in lengthy litigation. Nevertheless, NHA has recently succeeded in getting the stay order vacated at the level of Supreme Court of Pakistan.

e. Tentative reserve price calculated for original location

is Rs 75.7 million, while at the newly selected place in District Abbottabad Rs 56.3 million per annum. If the location is further changed, tentative reserve price will further vary.



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9.5. Exploration of Non-Traditional Approach.

a. It is apprehended that if services of operation & management (O&M) contractors for above toll plazas are procured through competitive bidding, unending litigation might jeopardize the procurement process.

b. Since establishment of toll plazas at the above

locations is essential to generate precious revenue for maintenance, it was felt prudent to explore non traditional ways.

c. It is considered advisable to adopt the course of

negotiations for award of these toll plazas to local influential’s, who, on one hand could put a check on resistance from the general public and, on the other, successfully operate the toll plaza by providing some relief to local commuters under own arrangement.

9.6 Bids Received. Summarized status of bids (net revenue per

annum) for O&M of the three toll plazas in question filed by certain interested parties:-

Rupees in Million

Company (M/s) Toll Plaza Traffic Count Tentative

Reserve Price Offered Price

a. Afridi Operators

Pabbi (N-5)

Near Azakhel Park (2011) 161.1 60

b. Wasim Bukhari Builders

Jand (N-80)

Km 80 (2010) 13.9 24.05

c. Sardar & Co

Mansehra (N-35)

Km 63 & 90 (2008)

75.7 & 56.3 26.4

9.7. Negotiations by the Committee of Officers.

a. A Committee of officers headed by GM (Operation) and comprising Director (OMU), Director (P&CA), Director (RAMS) and DD (P&R) deliberated upon all the aspects of negotiated tendering in relaxation of normal bidding procedure provided in PPRA Rules viz auction through advertisement in the press on prescribed terms & conditions.



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b. The Committee opined that in the peculiar circumstances encountered on the three locations in question, adopting regular procedure will further worsen the situation. This is also supported by the PPRA Rule-42(d), which provides for negotiated tendering, when processing through normal procedure is not feasible.

c. The Committee decided to negotiate to bring the bids

at a reasonable level as it was considered advisable to award the O&M of above toll plazas to local influential’s, capable of handling adverse situations, and thwarting resistance, on interim basis till toll culture is inculcated and masses enlightened of the long term benefits of paying toll.

9.8. Revised Bids. Three meetings were held with interested parties. First meeting took place in Feb-2012 and the second in Mar-2012. However, the bidders could not be convinced to enhance bids. Nevertheless, in the final meeting held on May 16, 2012, the bidders agreed to enhance their bids as under:- Rupees in Million

Company (M/s)

Toll Plaza

Tentative Reserve Price

Offered Price

a. Afridi Operators Pabbi (N-5) 161.1 100

b. Wasim Bukhari Builders

Jand (N-80) 13.9 26.05

c. Sardar & Co Mansehra (N-35) 75.7 & 56.3 35

9.9. Points to Note.

a. Award of toll plazas through negotiated bidding will not meet the financial expectations, as the bidders will have to meet allied expenses apart from operational expenditure viz relief to local commuters and arrangements with the local administration and political elites who will be in a much better position to tackle the issue of resistance by local populace/ commuters.



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b. The above mentioned bidders are already working with NHA for the past quite some time. They are well acquainted with the task and possess the capability to operate toll plazas. They are financially sound and have so far not defaulted in payment of revenue.

c. Presently, NHA is generating zero revenue from the

above three stations. Award of toll plazas through negotiated tendering will start revenue generation though less with immediate effect and this will help promote toll culture among local masses and prove beneficial in the long run. Once toll culture is fully ingrained, NHA will be in a better position to award toll plazas through open bidding.

9.10. Proposal. The NHA Executive Board is requested to approve award of the O&M of the three toll plazas in question on negotiated tendering at the rates and to the bidders mentioned in Para-9.8 for the period ending Jun-2013. Board’s Deliberations 9.11. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Operation Wing in respect of each observation is at Annex-E. 9.12. The Member (Operation) presented details. 9.13. The Chairman added that many key sections of NHA network taking significant traffic are yet not covered through toll. NHA intends to utilize the influence & authority of local prominent figures to inculcate toll culture while also earning some revenue. The individuals with political background can mute the hue & cry which is raised when NHA attempts to award toll O&M contracts through open competition. 9.14. The Member (Operation) remarked that the toll O&M contracts in question are proposed to be assigned till Jun-2013 only and, around Mar-2013, these toll plazas would be advertised for award on open tendering basis. He added that in a similar nature case, the Executive Board had allowed identical dispensation (189th -

Special Board meeting of Apr 24, 2010) for award of O&M contracts for a number of toll plazas in Balochistan through negotiation.



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9.15. The JS (MoC) observed that NHA should not succumb to pressure from the public and road users to circumvent requirements of PPRA. He also felt that the traffic counts mentioned in the proposal were outdated. 9.16. The Chairman responded that NHA needs to follow a pragmatic approach to counter opposition faced at selected locations. NHA is not facing any such problem at locations where toll culture is deep rooted. On the existing toll plazas, normally only locals resist toll and NHA compensates them by issuing frequent user passes. 9.17. The Member (Ops) added that traffic counts do not matter much as the guaranteed revenue figures have been agreed to through negotiation. The prospective toll operators had offered much lower figures but the bids have been got revised after hectic effort. 9.18. The VP (NESPAK) enquired whether FWO and NLC were also consulted. He also apprehended that private toll operators assigned the toll O&M responsibility based on their ability to use influence might exploit the road users through over-charging. 9.19. The Member (Ops) responded that FWO and NLC were not approached before but can be consulted now. However, it needs to be highlighted that FWO were previously operating the Mansehra Toll Plaza but backed out after public outcry. Moreover, track record of FWO is not so promising as they are holding NHA’s toll revenue generated from the Motorways (M-1, M-2 & M-3) sine Jul-2009 and are already defaulter of more than Rs 5.75 billion. 9.20. The Member (Ops) further explained that exploitation of road users will not be allowed because approved toll rates would be prominently displayed and NHA functionaries would ensure regular monitoring of toll operations. 9.21. The Board discussed the matter and decided that in the first instance NHA would invite NLC to check if they would be interested in operating the three toll plazas in question at the guaranteed revenue rates significantly higher than that agreed with private toll operators. In case, NLC refuses to offer higher guaranteed revenue, the bids discussed in Para-9.8 would be accepted.



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Decision 9.22. The Executive Board approved award of toll O&M contracts for three toll plazas in question on negotiated tendering at the rates and to the bidders mentioned in Para-9.8 for the period ending Jun-2013. 9.23. The Board, however, decided that in the first instance NHA would offer these toll plazas to NLC to check if they would be interested in toll O&M of these toll plazas at the guaranteed revenue rates significantly higher than that agreed with private toll operators. 9.24. In no case the toll O&M contracts will be extended beyond Jun-2013 and, towards this end, NHA would ensure timely action for award of these toll plazas through open competitive bidding. Action By : Member (Operation) 10. Agenda Item 7

Rationalization of Toll Rates on Satra Mile - Lower Topa Expressway

Introduction - Working Paper 10.1. Introduction. Current schedule of toll rates on national highways was implemented in pursuance to the decision of NHA Executive Board (206th meeting of Aug 11, 2011) wef Sep 1, 2011:-

Vehicular Category Toll (Rs)

a. Car, Jeep, Land Cruiser, Pajero, Tractor without Trolley & Equivalent

25

b. Wagon upto 24 seats / Coaster / Mini Bus / Mazda / Chassis upto 24 seats and Mini Truck

35

c. Bus / Coach / More than 24 seats

75

d. 2 / 3 Axle Truck

90

e. 4/5/6 Axle Truck (Articulated) 175



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10.2. Satra Mile - Lower Topa Expressway.

a. NHA has constructed the Satra Mile - Lower Topa Expressway at a huge cost. Although this low gradient expressway is preferentially used by local and foreigner visitors and tourists, NHA has kept toll rates at par with national highways.

b. This facility of international standard traverses

difficult terrain and is exposed to vagaries of nature including frequent landslides. Keeping traffic moving on this facility at all times requires additional resources and continuous effort. Due to heavy traffic load, the ratio of general wear & tear increases, and this requires additional funds for maintenance.

c. The aspect of public and highway safety on this road

is also of prime importance as traffic density increases abnormally in peak tourist season and on weekends, as the majority of commuters plying on this road are visitors/ tourists on recreational trips.

d. Improved highway safety for ensuring traffic

discipline requires additional resources to upkeep and maintain this expressway as an all whether road and thus the need for toll rationalization.

10.3. Old Murree Road. The old Islamabad - Murree Road is a 2-lane single carriageway of high gradient and Punjab Govt is charging Rs 45 for each light vehicle for upward journey only. 10.4. Proposal. Toll rates on Satra Mile-Lower Topa Expressway may be rationalized by doubling the existing rates for all categories of vehicles. The Executive Board’s approval is requested. Board’s Deliberations 10.5. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Operation Wing in respect of each observation is at Annex-F.



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10.6. The Member (Operation) presented details. 10.7. The Chairman added that the proposed rationalization of toll rates is the need of the hour. The Minister (C) and the Secretary (C) have also directed necessary action to this effect. 10.8. The VP-NESPAK remarked that the need for toll rationalization is appreciated but the increase should be gradual so that it is absorbed by the road users without much ado. Therefore, the proposed increase may be actualized in two phases of 50% increase in each phase staggered over a considerable length of time (say one year). 10.9. The Chairman, however, stressed that the proposal may be approved as submitted because the road traverses difficult terrain and is very heavy on maintenance and the cost is regularly increasing. Matters concerning this road were deliberated with the local MNA, Mr Shahid Khaqan Abbasi also in the context of RoW management, removal of encroachments and issues concerning villages’ located en-route and he also suggested rationalization of toll rates. 10.10. Matter was discussed and cleared by the Board. Decision 10.11. The Executive Board approved rationalization of toll rates on Satra Mile-Lower Topa Expressway (E-75), as follows:-

Vehicular Category Existing Proposed a. Car, Jeep, Land Cruiser, Pajero,

Tractor without Trolley & Equivalent

25 50

b. Wagon upto 24 seats / Coaster / Mini Bus / Mazda / Chassis upto 24 seats and Mini Truck

35 70

c. Bus / Coach / More than 24 seats

75 150

d. 2 / 3 Axle Truck

90 180

e. 4/5/6 Axle Truck (Articulated) 175 350

Action By : Member (Operation)



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11. Agenda Item 8 Raising of Funds by Floating Rupee Denominated Sukuk in Domestic Capital Market Against Islamabad - Peshawar Motorway (M-1)

Introduction - Working Paper 11.1. M-2 (International). The Executive Board (124th Special

meeting of Jan 6, 2005) had passed a “Resolution” regarding sale transaction of certain portion of land comprised in Lahore - Islamabad Motorway (M-2) with Pakistan International Sukuk Coy Limited, a public limited company incorporated under the laws of Pakistan and wholly owned by GoP to raise funds by floating dollar-denominated Sukuk in international capital market. The GoP raised USD 600 million through this exercise. 11.2. M-3 (Domestic). Another “Resolution” was passed by the Board (179th meeting of Sep 19 & 30, 2009) for sale transaction of certain portion of land comprised in Faisalabad - Pindi Bhattian Motorway (M-3) with Pakistan Domestic Sukuk Coy Ltd to raise funds by floating rupee-denominated Sukuk. The GoP raised Rs 42 billion. 11.3. M-2 (Domestic). A third “Resolution” was passed by the Board (208 meeting of Oct 19, 2011) for sale transaction of any or certain portion of land comprised in Motorway (M-2) with Pakistan Domestic Sukuk Coy Ltd to raise funds by floating rupee-denominated Sukuk. The GoP had set a target of raising Rs 50 billion. 11.4. Proposal. The Finance Division vide letter No F4(21)EF (C.III)/2009 dated Jun 15, 2012 intimated that the government is considering to raise new funds by issuing a Sukuk against the underlying assets of Islamabad - Peshawar Motorway (M-1). It has also been confirmed that this Sukuk transaction would not involve any financial, legal or administrative implication for NHA. 11.5. Acknowledgment. Earlier, the Finance Division vide UO Note No 4(21)EF(C.III)/2009 dated May 28, 2012 had acknowledged the cooperation extended by NHA from time-to-time for raising funds from the international and domestic capital markets by floating Sukuks while also conveying that they are considering adding new assets like Motorway (M-1) & Makran Coastal Highway (N-10) to build additional capacity for raising funds through Sukuk transactions.



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11.6. Views NHA. NHA has no objection to the proposal. 11.7. Proposal. Following Members Executive Board may be authorized to enter on behalf of NHA into the process of sale transaction of certain portion of land comprised in M-1 with Pakistan Domestic Sukuk Coy Ltd for consideration & approval by the Board:-

a. Mr Abdul Khaliq, Add’l Secretary (Finance Division). b. Mr Shoaib Ahmad Khan, Member (Finance) NHA. c. Mr Sabir Hasan, Member (Planning) NHA.

Board’s Deliberations 11.8. The Secretary NHA remarked that this proposal was initiated at the behest of the Finance Division and since that Division wanted expeditious action in the matter; approval of the Executive Board was solicited on circulation basis. Whereas, all the Members accorded consent, the AS (Finance) and JS (MoC) desired that the issue may be debated formally in the Board meeting. 11.9. The Member (Finance) presented the details. 11.10. The AS (Finance) remarked that he has no specific comment to offer and the reason he did not endorse his signatures earlier was that he had not been able to consult the relevant case file in the Finance Division. He would appreciate if the Member (Finance) NHA could separately provide him relevant details. Note. Subsequent to the Board meeting, the Member (Finance) provided relevant

details to the AS (Finance) and he has accorded his clearance. 11.11. The Chief (T&C) suggested that nomination of Executive Board Members to Pakistan Domestic Sukuk Coy Ltd instead of by name may be made by designation so that the Board’s clearance may not be required in case of posting transfer of any officer. Moreover, the said officers may also perform this function for any future proposals of similar nature, if & when initiated by the Finance Division regarding sale transaction of NHA land with Sukuk Bonds. 11.12. Matter was discussed and cleared.



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Decision 11.13. The Executive Board approved sale transaction of rupee denominated Sukuk in Domestic Capital Market against Islamabad - Peshawar Motorway (M-1) with Pakistan International Sukuk Coy Ltd and authorized the following Board Members to enter into the process of sale transaction of certain portion of land comprised in M-1:-

a. Additional Secretary (Budget, Finance Division). b. Member (Finance) NHA. c. Member (Planning) NHA.

11.14. The Board also decided that the above officers will also perform this function for any future proposals of similar nature, if & when initiated by the Finance Division regarding sale transaction of NHA land with Sukuk Bonds. Action By : Member (Finance) 12. Agenda Item 9

Writing-Off Loss Sustained by NHA : Theft of Toyota Double Cabin No KN-2031, Model 2004

Introduction - Working Paper 12.1. Vehicle No KN-2031, Toyota Double Cabin, Model 2004 was detailed with Mr Abdul Qadoos Shaikh, Ex-Project Director (S-R) Larkana for performing official duties. It was snatched on Jul 24, 2009 at about 0830 hours by unknown armed persons from the driver while he was waiting in the parking area of the officer’s residence near Regional Office, Sukkur. The dacoits kidnapped the driver also and took him along with vehicle. 12.2. The officer rushed to the office of DPO Sukkur who passed orders of “Naka Bandi” at outlets of Sindh Province border with Balochistan. FIR was also lodged by the officer in the concerned Police Station Sukkur. However, the police have so far not succeeded in recovering the vehicle. 12.3. The vehicle was not comprehensively insured being 2004 model as only new vehicles are comprehensively insured that too only for 3 years as per NHA Motor Vehicle Use Policy.



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12.4. An Inquiry Committee headed by Mr Basharat Hussain, PD NHA, Larkana was constituted. The inquiry report furnished by him was found to be full of flaws and lacuna. 12.5. A fresh inquiry was assigned to Mr Abdul Rauf Sheikh, Director (Monitoring) NHA, Karachi. He concluded that the officer was not at fault and declared him innocent as the loss was accidental in nature and nothing adverse against the officer was observed. The incident occurred due to overall law & order situation in the country. 12.6. Since no action is required to be taken against any NHA official, it is proposed that entire loss ie reserve price of the vehicle of Rs 1,674,036/-, as calculated/vetted by Finance Wing, may be written off by NHA Executive Board, being the competent forum as per Table-XI to Chapter-10 of NHA Code. Board’s Deliberations 12.7. The Member (Admin) presented details. 12.8. The JS (MoC) remarked that NHA is seeking approval for writing-off loss of vehicles in certain cases and in few other cases recoveries are being affected from the officers / officials who lost the vehicle. The criteria / SOPs on the subject need to be explained. 12.9. The Member (Admin) clarified that write-off or recovery action depends on the outcome of the formal inquiry. Matter is processed in accordance with the conclusion drawn and recommendation made by the Inquiry Officer/Committee. If the conclusion is that the loss of vehicle is also attributable to negligence by the officer or the driver concerned, the Inquiry Officer/Committee recommends full or partial recovery and the action is taken accordingly. If the loss is not attributable to the officer or the driver concerned, write-off of the loss is recommended. 12.10. The Member (Admin) added that no case of theft of vehicles is submitted to MoC. However, if recovery action is ordered, the officer or the official concerned do submit appeals to the MoC for review of NHA decision.



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12.11. Matter was discussed and it was opined that the element of bias on the part of the Inquiry Officer/Committee cannot be ruled out. To ensure that no injustice is done, NHA should bring all cases of theft of vehicles to the Executive Board for info in case the loss is being recovered from the officer or the driver concerned or for approval if the loss is proposed to be written-off. Decision 12.12. The Executive Board approved writing of the loss of Rs 1,674,036/- due to theft of Theft of Toyota Double Cabin No KN-2031, Model 2004. 12.13. Henceforth, NHA will bring all cases of theft of vehicles to the Executive Board for info in case the loss is being recovered from the officer or the driver concerned or for approval if the loss is proposed to be written-off. Action By : Member (Admin) 13. Agenda Item 10

Extension in Contract Appointment of Lt Col (Retd) Abid Ali Khan, Director (Engr, BS-19)

Introduction - Working Paper 13.1. Lt Col (Retd) Abid Ali Khan was appointed on contract as Director (Engr, BS-19) after fulfilling all codal formalities wef May 3, 2010 against a PC-I post of Lowari Tunnel Project completion date of which is Mar-2014. His contract tenure expired on May 2, 2012. 13.2. The services of Lt Col (Retd) Abid Ali Khan are required on continued basis, keeping in view project needs. Therefore, NHA recommends extension in his contract wef May 3, 2012 to Mar 31, 2014. His performance in 2011 & 2012 has been rated as “good.” 13.3. Approval of the Executive Board is solicited. Board’s Deliberations 13.4. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Admin Wing in respect of each observation is at Annex-G.



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13.5. The Member (Admin) presented details. 13.6. Matter was discussed & cleared by the Board. Decision 13.7. The Executive Board approved extension in the contract appointment of Lt Col (Retd) Abid Ali Khan, Director (Engr, BS-19) wef May 3, 2012 to Mar 31, 2014. Action By : Member (Admin) 14. Agenda Item 11

Fixation of Pay & Allowances in BS-19 & Payment of Arrears from the Date of Deferment to Mr Abdul Hameed Qureshi, Retired Director (Accounts, BS-19)

Introduction - Working Paper 14.1. The case of Mr Abdul Hameed Qureshi, the then DD (Accounts, BS-18) was placed before the DPC for consideration of his promotion on Jan 19, 2004 against two promotion quota vacancies of Director (Accounts, BS-19). The DPC recommended his super-cession due to weak service record/discipline. 14.2. The NHA Executive Board is the authority competent for appointments to posts in BS-18 to 19. Recommendations of the DPC were placed before the Board (117th meeting of Mar 13, 2004). The Board converted the recommendation for super-cession into deferment. Necessary office order was issued on Mar 24, 2004 and its copy was endorsed to the officer. 14.3. Mr Qureshi submitted a departmental representation / appeal to MoC against his deferment. The MoC regretted the appeal being time barred vide letter No 4(2)97/ Roads dated Aug 17, 2006. 14.4. After rejection of his departmental appeal, the officer should have filed an appeal before the Federal Services Tribunal (FST), within the statutory period of 30 days but he did not and thus decision about his deferment for promotion to BS-19 attained finality.



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14.5. Mr Qureshi, however, again submitted a departmental appeal on Dec 17, 2006 to the Chairman NHA against his deferment. His case was processed and he was provided with a copy of MoC’s letter dated Aug 17, 2006 on rejection of his departmental appeal. 14.6. Mr Qureshi was finally promoted as Director (Accounts, BS-19) on the recommendation of the DPC dated Apr 30, 2009 and notified vide Office Order dated Aug 5, 2009. On promotion, he submitted an application dated Sep 1, 2009 for fixation of his pay & allowances in BS-19 with payment of arrears wef the date of deferment viz Mar 13, 2004. 14.7. Case was processed and submitted to the then Chairman NHA, for rejection being not covered under the rules. Matter remained inconclusive as the file remained pending with the then Chairman NHA for a considerable length of time. After relinquishment of the charge by the then Chairman NHA in Jan-2011, the Secretary NHA returned the case on Jan 8, 2011 to the Admn Wing with directions of Acting Chairman that the case be resubmitted afresh, if required. 14.8. Mr Qureshi is now pleading for pay fixation in BS-19 and payment of arrears from the date of deferment on the analogy of the following cases:-

a. Mr Arif Saeed Rana, DD (Accounts). He was also deferred for promotion as Director (BS-19) on Jan 19, 2004 and after this promotion materialized wef Mar 13, 2006 was allowed pay fixation in BS-19 and arrears of pay & allowances with retrospective effect ie date of deferment by NHA Executive Board.

b. Mr Haroon Rao, AD (Adm). The recommendation of

DPC for his super-cession on disciplinary grounds was endorsed by the Executive Board. However, the FST declared this as unjust & unfair and directed reconsideration of his promotion. The officer was ultimately promoted as DD (Admn, BS-18) wef Aug 21, 2006 with retrospective benefits.



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14.9. The case of Mr Qureshi is not identical to that being quoted by him as precedent; therefore, his plea is not justifiable. On rejection of his departmental appeal / representation by the appellant authority in MoC, he should have filed appeal against the said decision before FST within stipulated time, but he opted not to. 14.10. Since Mr Qureshi has already superannuated wef Dec 8, 2009, the Executive Board is requested to consider his case on humanitarian grounds for fixation of his pay in BS-19 and payment of arrears with retrospective effect viz Mar 13, 2004 (date of deferment). Board’s Deliberations 14.11. The MoC had conveyed certain written observations on this agenda item. Tabulated response rendered by the Admin Wing in respect of each observation is at Annex-H. 14.12. The Member (Admin) presented details. 14.13. The AS (Finance) observed that the proposal can not be supported being not covered under the rules. 14.14. The Secretary NHA invited attention to the fact that the super-cession of the officer was converted by the Executive Board to deferment. Since no disciplinary shortcoming on his part ultimately materialized, he was eventually promoted. Whereas, Mr Arif Saeed Rana, whose case was identical in nature and was deferred in the same Board meeting, was granted all back benefits, Mr Qureshi was denied the equal opportunity and hence his case deserve similar treatment on the basis of equality under FR-17(1) (Annex-J). 14.15. Proposal was discussed and regretted on plea that it is not covered under the rules. Decision 14.16. The Executive Board considered the proposal regarding fixation of pay & allowances in BS-19 & payment of arrears from the date of deferment to Mr Abdul Hameed Qureshi, retired Director (Accounts, BS-19) but regretted on plea that it is not covered under the rules. Action By : Member (Admin)



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15. Agenda Item 12

Annual Maintenance Plan for FY 2012-13 Introduction - Working Paper 15.1. Introduction.

a. NHA, under its Act, is tasked to plan, promote, organize, and implement programs for construction, development, operation, repair and maintenance of national highways. It is currently responsible for maintenance and upkeep of 12,131 km of federalized national highways.

b. Challenges such as decrease in estimated revenue,

escalation in prices of construction materials, increase in fuel & manpower cost, increase in maintenance requirement, new federalization of roads in poor condition, financial mismanagement of RMA, blockade of collected revenues by O&M operators of toll plazas and financing of PSDP projects through RMA (road maintenance account), etc, are placing extra burden on NHA in achieving RAMS (Road Assets Management System) objectives/ targets.

c. Despite the paucity of resources, NHA has achieved

significant success by gradually increasing the quality of maintenance through periodic overlays, provision of rigid pavements at places of rutting, replacement/rehab of dilapidated bridges, geometric improvements, urban area development including provision of facilities like service lanes, lighting, bus bays, parking lots, underpasses, overhead bridges, flyovers, fencing, etc, through toll revenue and commercialization of its RoW.



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15.2. Road Condition Surveys & Strategic Analysis.

a. In order to prepare Annual Maintenance Plan (AMP, 2012-13) on scientific lines, pavement condition and road roughness surveys, traffic counts, computation of residual pavement strength by Falling Weight Deflectometer (FWD) non-destructive testing, etc, was undertaken. Thereafter, future road maintenance funding needs were determined by using the Strategy Analysis Module of the Highway Development and Management Tools, HDM-4 Version 2.0.

b. The HDM-4 simulates total life cycle conditions and

costs for different rehab and maintenance activities, and provides economic criteria for decision making. The model computes total costs composed of road agency and road user costs of the alternatives being evaluated by estimating road deterioration and road user costs over a period of 20 years.

c. The model also compares the possible project

alternatives by computing the present value of the net benefits (NPV) of the project alternatives compared to the without project alternative, and selects the ones with highest NPV in “free budget” situation. Optimization of multiyear programs of expenditure under budgetary constraints is done using incremental benefit / cost analysis techniques, as provided by the HDM-4 analysis.

15.3. Future Equipment & Technology Needs.

a. Traffic data is used for different types of studies carried out both at organizational level as well as for formulation of national level strategies. It is being collected manually only at selected points across Pakistan by RAMS and only for one day duration.



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b. Important factors like growth can be achieved by using an automatic counting system which is robust and easily manageable. RAMS carried out extensive study and has recommended automatic infra-red portable traffic counters in this budget.

c. In-situ pavement strength is important for deciding

pavement maintenance strategy at any point in time. This can be done by state-of-the-art FWD Machine. The existing machine with NHA is more than 16 years of age and has passed its useful life. Now, NHA has to procure a latest vehicle mounted High Weight Deflectometer (HWD) for improved decision making for pavement maintenance alternatives.

15.4. International Roughness Index. The present average network roughness is 5 IRI (9147 km) compared to 10 in 1998-99 for a network of 8039 km. This is because NHA shifted its focus from rehab to periodic (functional & structural) overlays. Current overall network status is as follows:-

a. 10.42% is in good condition (2 to 3 IRI). b. 32.98% is in fair condition (3 to 4 IRI). c. 30.55% is in poor condition (4 to 6 IRI). d. 26.05% is in very poor condition (more than 6 IRI).

15.5. Budget Scenario.

a. Detailed analysis with different budget scenarios revealed that the level of expenditures required for maintaining NHA network comes to the tune of Rs 26.6 billion. [About Rs 19 billion in first year and Rs 48 billion in second year for rehab and periodic maintenance (structural & functional overlays) alone and Rs 2.315 billion for routine maintenance, Rs 4.75 billion for other maintenances and 0.570 billion for admin, sports, other activities and functioning of HRTC at unconstrained level in each year].

b. NHA, however, has a resource envelope of only Rs

17.314 billion for FY 2012-13. Hence a maintenance backlog will be created in 1-2 years time, in case additional funding is not injected to boost up maintenance funding.



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15.6. Twenty Year Rollover Maintenance Plan (FY 2010-11 – FY 2030-31).

a. The AMP 2012-13 includes a Rollover Program for future maintenance needs of Rs 264.11 billion. Analysis reveals that in next 20 years, despite numerous rehab projects, including donor assisted, NHA would be required to undertake overlays of different forms on its network. If this is done, the IRI would be brought down to level 3 - 4 indicating substantial improvements.

b. The afore-stated maintenance spending is only for

rehab and pavement overlays. Routine maintenance needs and other spending which arise on need basis on some emergency / unforeseen situations are not included in the figure of Rs 264.11 billion.

15.7. Financial Resources (2012-13).

Description Rs in M a. GoP maintenance grant 2,000.000

b. GoP grant for maintenance of KKH - Skardu (S-1)

70.000

c. GoP grant for maintenance of Thakot -Khunjerab (KKH)

240.000

d. Net revenue available (estimated) 15,003.583 e. Total Budget 17,313.583

15.8. Conclusion. To maintain and upkeep its network, NHA required Rs 26.6 billion in AMP 2012-13 as per the HDM-4 program analysis (unconstrained), however, due to financial constraint, AMP of Rs 17,313.583 million has been prepared. 15.9. Technical Clearance. The “RMA Technical Scrutiny Party” and “RMA Steering Committee” have scrutinized and recommended the AMP 2012-13 for approval. 15.10. Proposal. NHA Executive Board is requested to approve the AMP 2012-13 of Rs 17,313.583 million.



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Board’s Deliberations 15.11. The Member (Operation) presented details. 15.12. The VP-NESPAK observed that NHA should make good use of available resources and incur maintenance funds on roads that are in fair shape and need to be kept in decent shape for few more years. Incurring huge maintenance expenditure on roads which have deteriorated badly and are in need of reconstruction or rehabilitation would be wastage of resources. 15.13. The Chief (T&C) observed that there should not be a different head for payment of liabilities. As allocations were already approved in respective year’s AMPs for different maintenance works hence, no amount may be allocated again for those works. 15.14. The JS (MoC) observed as follows:-

a. Maintenance works be prioritized on urgency and available resources basis.

b. All procurements will be under PPRA Rules. c. Regularization of maintenance works carried out in

previous years ie 2010-11 and 2011-12 by the Board, as proposed in the working paper, is not possible being beyond the powers of the Board. Matter should be handled by respective competent authorities / officers at their own responsibility.

15.15. The Member (Operation) agreed with the observations and informed that the amount kept in liabilities head shall be utilized for different maintenance heads. He also clarified that no funds have been spent over & above the allocated amounts in previous years. Based on block allocations approved by the Executive Board for different heads, a number of projects (like emergency works heads, etc), are formulated. Thereafter, projects / schemes are carried out and then actual expenditures (within the approved allocations) are formally approved. 15.16. The Member (Finance) remarked that provision for Admin expenses will be Rs 775 million.



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15.17. After detailed discussion, the AMP 2012-13 was approved with stipulation that the amount of Rs 1,537.60 million earmarked for previous two years liabilities would be allocated for various essential maintenance needs under different heads. Purchase of new equipment discussed in Para-15.3 was also cleared, in principle. 15.18. The Board Members appreciated timely processing of AMP 2012-13 by NHA and also the quality of presentation and expressed the hope that this practice would be religiously followed in future. Decision 15.19. The Executive Board approved Annual Maintenance Plan for FY 2012-13 of Rs 17,313.58 million. Program outline is given below and detailed region-wise summary is at Annex-K:-

Maintenance Activity Rs in M

1. Rehabilitation 846.07

2. Periodic maintenance (structural overlay) 2,110.34

3. Periodic maintenance (functional overlay) 5,243.73

4. Routine maintenance 2,315.85

5. Highway safety 500.00

A. Sub Total (1 to 5) 11,015.99

6.

i. Corridor management (Trauma Centers) 200.00

ii. Toll plazas & weigh stations 450.00

iii. Administrative expenses (services) 775.00

iv. Logistic expenses / survey equipment 60.00

v. Afforestation along national highways 80.00

vi. Emergency maintenance 3,500.00

vii. Hill slope stability & road protection works 50.00

viii. Design review & supervision consultancy 200.00

ix. Geometric improvements 400.00

x. Bridge/culvert structural maintenance 512.59

xi. Promotion of sports & cultural activities 10.00

xii. Functioning of HRTC 60.00

B. Sub Total (i to xii) 6,297.59

C. Total (AMP 2012-13) (A + B) 17,313.58



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15.20. The Board directed processing of a separate working paper with detailed justification for seeking approval of Rs 1,537.60 million for attendance of liabilities of years 2010-11 and 2011-12, if deemed necessary. Action By : Member (Operation) 16. Agenda Item 13

Award of Works : Construction of 34.83 Km Shatial - Thor Nullah Bypass on KKH Including 2.94 Km Link Road to Existing KKH

Introduction - Working Paper 16.1. Introduction.

a. Project “Construction of 34.83 km long Shatial - Thor Nullah Bypass on the KKH including 2.94 km link road from Thor Nullah to existing KKH” is located in District Kohistan of Khyber Pakhtunkhwa and District Diamir of Gilgit-Baltistan.

b. Project is necessary as construction of Diamir

Bhasha Dam will entail a large increase in transportation of heavy construction material & equipment and will result in hindrance to traffic flow on KKH besides likely accidents.

c. Provision of bypass prior to setting up of contractor’s

camps, dumping of equipment & machinery, construction yard, etc, for construction of the Dam is imperative so that KKH remains open for trade / transportation.

d. Proposed bypass is a part of relocation of KKH which

would be inundated by the Dam’s lake. NHA has planned to relocate 141.67 km length of KKH in four packages, R-1 (42.7 km), R-2 (38.8 km), R-3 (38.5 km) & R-4 (21.65 km). Subject prioritized project constitutes part of R-1 at a higher elevation.



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16.2. Project Cost/Funding.

a. Project is sponsored by WAPDA to be executed by NHA as deposit work. NHA will also be responsible for operation & maintenance.

b. PC-I cost is Rs 3844.432 million (approved by ECNEC on

Aug 20, 2009) including construction cost of Rs 3378.580 million, as prepared by WAPDA in Aug-2009.

c. Funds to be deposited by WAPDA with NHA.

16.3. Engineer’s Estimate. Rs 3,088,924,502/- (CSR-2009 + 9.1%). 16.4. ECNEC Decision. Tenders were called on single stage two envelopes basis vide notice published in the press on Sep 1, 2009. However, WAPDA approached the Planning Commission for changing the executing agency from NHA to WAPDA. The ECNEC on May 26, 2011 did not agree & following decision was conveyed by the Planning Commission on Jun 6, 2011:-

a. NHA will execute the project on the same approved cost and design/specification by completing requisite re-tendering process within weeks to re-tender the project.

b. WAPDA will transfer requisite funds to NHA. Minister

for Water & Power will discuss with WAPDA and NHA to chalk out schedule to ensure completion of project on fast track.

16.5. Re-invitation of Bids.

a. In accordance with ECNEC decision, fresh tender notice was published in print media and displayed on PPRA & NHA websites on May 28, 2011 on single stage two envelopes basis. A corrigendum was published on Jun 18, 2011.



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b. Total twenty seven (27) firms/JVs purchased bidding documents out of which ten (10) submitted technical & financial bids on given date viz Jul 1, 2011:-

Messers’ Legend i. SPARCO (JV) HUK & Co SPARCO+ HUK (JV)

ii. Shoukat Khan & Co SKC

iii. Techno Emirates Int (JV) 14th Metallurgical Const Co of China

Techno+ Metallurgical (JV)

iv. Frontier Works Organization FWO

v. SARCO (JV) AM & Co SARCO+AMC (JV)

vi. Matracon Pakistan Matracon

vii. HAKAS (Pvt) Ltd HAKAS

viii. Sardar M Ashraf D Baloch SMADB

ix. KNK (JV) NEIE KNK+NEIE (JV)

x. Sultan Mehmood & Co SMC

c. Only technical bids were opened on Jul 1, 2011. The

financial bids were kept unopened.

16.6. Technical Evaluation. Technical bids were evaluated in accordance with the given eligibility criteria. Only following two bidders were qualified for opening of financial bids:-

a. M/s HAKAS (Private) Limited. b. M/s Frontier Works Organization.

16.7. Financial Evaluation.

a. Financial bids of qualified bidders were opened on Aug 1, 2011 in the presence of the Bid Opening and Evaluation (BO&E) Committee.

b. Financial bids were evaluated and checked for

arithmetic errors as per instructions to bidders. Comparison of bids, after correction, vis-à-vis the Engineer’s Estimate of Rs 3,088,924,502/- (CSR 2009

+ 9.1%) emerged as follows:-

Lowest Ranking

Firms (M/s)

Announced Bid (Rs)

Corrected Bid (Rs) Variation

1st HAKAS 3,507,232,052 3,518,133,201 +13.9% 2nd FWO 4,924,183,000 4,924,183,216 +59.44%



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16.8. Transfer of Funds.

a. WAPDA was requested on Dec 29, 2011 to transfer the initial tranche of Rs 500 million to NHA prior to issuance of Letter of Acceptance to the lowest bidder.

b. Matter remained under discussion with WAPDA and

finally a Memorandum of Understanding (MoU) was signed between NHA & WAPDA on May 30, 2012. It contains procedure and terms of execution of the project by NHA as WAPDA’s deposit work.

c. WAPDA transferred Rs 300 M to NHA on Jun 12, 2012. d. Bid security of M/s Hakas is valid upto Sep 30, 2012.

16.9. Recommendation. The Tender Acceptance Committee has recommended award of the contract to M/s HAKAS (Pvt) Ltd at their corrected bid price of Rs 3,518,133,201/=. 16.10. Proposal. The Executive Board is requested to approve the above recommendation. Board’s Deliberations 16.11. The Member (Planning) presented details. 16.12. On an observation by Chief (T&C), the Member (Planning) clarified that the issue raised by WAPDA for change of executing agency from NHA to WAPDA stand settled with signing of MoU between WAPDA & NHA and release of first tranche of Rs 300 million by WAPDA on Jun 12, 2012. 16.13. Matter was discussed & cleared by the Board. Decision 16.14. The Executive Board approved award of contract for “construction of Shatial - Thor Nullah Bypass (relocation of KKH) including link road to existing KKH” to M/s HAKAS (Pvt) Ltd at their corrected bid price of Rs 3,518,133,201/=; (Rupees three thousand five hundred & eighteen million, one hundred & thirty three thousand, two hundred & one) only, which is +13.9% the updated estimate of Rs 3,088,924,502/- (CSR-2009 + 9.1%). Action By : Member (Planning)



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17. Agenda Item 14 Award of Works: Construction of Flyover at Takhtbhai (N-45)

Introduction - Working Paper 17.1. Introduction (N-45).

a. N-45 originates from Nowshera and culminates at Chitral traversing Mardan, Malakand, Chakdara, Dir & Lowari Pass (309 km). Initial segment of N-45 is 4-lane and the balance length (2-lane).

b. N-45 (4-lane) traverses Takhtbhai urban area having

shops, houses and multi-storeyed plazas on both sides in about 3 km length. Road width is restricted to 2-lane for 130 m length (65 m both sides from the

existing railway level-crossing). Level crossing is 1.5~2 m down from the existing road and produces immense traffic congestion.

c. To address the problem of traffic blockade and long

queues because of frequent closure of Railway Phattak of Mardan - Dargai Railway line, it was decided to construct a 2-lane Flyover, which entailed land acquisition.

17.2. Scope of Work.

Construction of Km a. 2-lane Flyover : 1.140 b. Approach Ramp (Mardan Side) : 0.365 c. Approach Ramp (Malakand Side) : 0.395 Total Length 1.900

17.3. Funding / PC-I Status.

a. Project will be financed by Government of Pakistan. b. Construction of Takhtbhai Flyover is included in

PC-I “Improvement of N-45 (141 km)” approved for Rs 2399.27 million in 2007.



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c. Amount for the project in the PC-I, presently under

review, is Rs 100 million. PSDP allocation 2012-13 is Rs 50 million.

17.4. Engineer’s Estimate. Consultants submitted an estimate of Rs 648.713 million; which, after review by incorporating various design changes, was reduced to Rs 475.196 million (CSR-2009 + 9.1%). 17.5. Railways NOC.

a. Notice for pre-qualification of contractors was published in the press and uploaded on NHA and PPRA websites, on Aug 1, 2010. However, for initiating construction activities, the mandatory approval of Railways is awaited.

b. The Design Section is in contact with the Railways

who have asked for Rs 49 million for relocation of the Railway Station and other necessary works. After NHA transfers the said amount, Pakistan Railways will issue NOC.

17.6. Tendering Process.

a. After completion of all codal formalities and adopting “single stage - two envelope” procedure, “notice inviting bids” was published in the press and uploaded on NHA & PPRA websites on Feb 23, 2012.

b. Sixteen (16) firms applied for bidding documents. c. On Mar 1, 2012, a corrigendum regarding estimated

cost, PEC category, date of pre-bid meeting / bid opening and amount of bid security was issued.

17.7. Technical Evaluation.

a. On scheduled date viz Mar 26, 2012, following six (6) firms submitted their Technical (Envelope-A) and Financial (Envelope-B) bids:-



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Messers’ Legend i. National Logistic Cell NLC ii. Frontier Works Organization FWO iii. RMC Construction Company RMCC iv. Kingcrete Builders Kingcrete v. Ghulam Muhammad Khan & Co GMK vi. CONPRO Services (Pvt) Ltd CONPRO

b. The six (6) technical proposals were opened and

evaluated by a Committee constituted in accordance with NHA Code. M/s NLC, GMK & CONPRO did not fulfill eligibility criteria & were declared substantially “non-responsive.” Other three bidders were recommended for opening of financial bids.

17.8. Financial Evaluation. The financial proposals were opened on May 14, 2012. Following results based on final bid price were announced:-

Firm (M/s) Bid (Rs) Final Bid (Rs)

a. Kingcrete 561,664,515 561,664,515 b. RMCC 582,124,070 582,124,070 c. FWO 691,535,836 653,885,808 *

* After 6% rebate (less Bill No 7 & 8).

17.9. Arithmetic Check During Detailed Evaluation.

a. It was observed that the bid submitted by M/s

Kingcrete comes to Rs 585,686,395/- and not Rs 561,664,515/- as mentioned by the bidder. Correction of this error resulted in change of position of the “lowest announced bidder” from 1st to 2nd. The “submitted” and “corrected” details of summary page of BoQs of M/s Kingcrete are given below:-



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Bill No Submitted (Rs) Corrected (Rs) 1. 4,711,790 4,711,790 2. 40,307,600 40,307,600 3. 17,599,700 17,599,700 4a. 13,941,600 13,941,600 4b. 378,919,745 378,919,745 4c. 610,100 610,100 5. 63,360,000 63,360,000 6. 15,642,560 15,642,560 7. 24,025,000 24,025,000 8. 26,571,420 26,568,300

Total 561,664,515 585,686,395

Difference : Rs 24,021,880

b. In accordance with Clause IB.25, M/s Kingcrete were asked if they have any reservation regarding the evaluation. Vide letter No KB/NHA/TB/001 of May 25, 2012, they agreed with corrected bid amount.

17.10. Comparison. The summary of evaluation vis-à-vis the Engineer’s Estimate of Rs 475.197 million (CSR-2009 + 9.1%) excluding Bill No 7 is given below:-

Lowest Ranking

Contractor (M/s)

Announced Bid (Rs)

Corrected Bid (Rs)

Variation

1st RMCC 582,124,070 582,124,070 +22.50% 2nd Kingcrete 561,664,515 585,686,395 +23.25% 3rd FWO 653,885,808 653,885,800 +37.60%

17.11. Recommendation. The Tender Acceptance Committee has recommended award of work to the first lowest evaluated bidder M/s RMCC at their evaluated bid price of Rs 582,124,070/-. 17.12. Proposal. NHA Executive Board is requested to approve the above recommendation. Board’s Deliberations 17.13. The Member (Planning) presented details. 17.14. Matter was discussed & cleared by the Board.



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Decision 17.15. The Executive Board approved award of works for “construction of Flyover at Takhtbhai on N-45” to the first lowest evaluated bidder M/s RMC Construction Coy at their evaluated bid price of Rs 582,124,070/- (Rupees five hundred & eighty two million, one

hundred & twenty four thousand and seventy) only; which is +22.50% the updated estimated cost of Rs 475.197 million (CSR-2009 + 9.1%). 17.16. The Board advised NHA to expedite processing of the revised global PC-I for improvement of N-45 at priority. Action By : Member (Planning) 18. Agenda Item 15

Award of Works: Construction of Deharr Road from Khad Factory to Pul Khadal, Multan (Km 0+000 to 5+600, Pack-I)

Introduction - Working Paper 18.1. Background/Introduction.

a. Road proposed for construction, rehab, upgradation and widening is a part of Punjab South Development Package being taken up under instructions of the PM’s Secretariat vide No 3(1)/PSO/PM/ 2009-903 dated Jun 2, 2009.

b. Subject project is a part of “Construction of Metalled

Road (Missing Link) from Pul Khadal (Bosan Road) to NFC Khad Factory (LMQ Road) via Abundant Canal (23 km)” as Pack-I (5.6 km). This construction will provide direct access from Multan General Bus Stand to Kabirwala and onward direct approach upto Baghrianwala on Kabirwala – Shorkot Road.

c. This linkage would be approx 11 km shorter than the

existing route via National Highway (N-5) and through Bosan Road and will also avoid heavily trafficked city area.



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18.2. Scope of Work.

a. Construction of a 2-lane 7m wide asphaltic single carriageway and 1.5 m DST shoulders on both sides.

b. Pavement structure includes granular sub base and

water bound macadam road base. c. Construction of RCC pipe culverts, drainage &

erosion / ancillary works. d. Design speed will be 90 kmph.

18.3. Source of Funding/PC-I.

a. Project is being financed by the GoP. b. PC-I for whole project costing Rs 809.43 million was

approved by CDWP on Mar 14, 2012. c. PSDP allocation 2012-13 is Rs 300 million.

18.4. Engineer’s Estimate. BoQs, drawings & estimates of Rs 184,616,643/- (CSR-2009 + 9.1%) were prepared by Design Section. 18.5. Procurement Process.

a. Process was initiated by advertising “Invitation for Bids” in the press on Feb 29, 2012 and display on NHA & PPRA websites. Advertisement appeared with following features:-

i. Bidding procedure : Single Stage – Two Envelope ii. PEC Category : C-2 (Specialization CE-01) iii. Pre-bid meeting : Mar 12, 2012 iv. Bid opening : Mar 20, 2012

b. BoQs/ Engineer’s Estimate were revised by Design

Section due to revision in design, hence bidding documents could not be issued to prospective bidders and Corrigendum 1 was published on May 22, 2012 intimating:-



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i. Bid Security : Rs 4 million ii. PEC Category : C-3 (Specialization of CE-01 for 2012) iii. Pre-bid meeting : May 29, 2012 iv. Bid opening : Jun 7, 2012

c. Seventeen (17) firms purchased bidding documents

but only eleven (11) submitted technical (Envelope-A) and financial (Envelope-B) bids on scheduled date:-

Messers’ Legend 1. Sachal Engineering Works Sachal 2. Chaudhry Construction Co Chaudhry 3. Al-Mehran Builders Pak (Pvt) Ltd Al-Mehran 4. Usmani Associates Usmani 5. Abdullah Khan & Co AKC 6. Mishal Sania (Pvt) Ltd Mishal 7. Ch Abdul Latif & Sons (Pvt) Ltd CALSON 8. RMC Construction RMCC 9. Wajid Iqbal & Co Wajid 10. Wattan Builders Wattan 11. Nazir & Company Nazir

18.6. Technical Evaluation. Technical proposals were opened and evaluated by the Committee constituted in accordance with NHA Code. Six bidders who met the requirement of Clause IB-3, 11.1 (A), 26.1, 26.2 and IB-35 were recommended for opening of financial bids. 18.7. Financial Evaluation. During opening of bids on Jun 21, 2012, the following results, based on summary sheet of the bids quoted by the firms, were announced:-

Firm (M/s) Bid (Rs) Final Bid (Rs)

a. AKC 211,419,012 211,419,012 b. RMCC 241,179,539 230,548,562 (1) c. Sachal 240,767,055 240, 677,055 d. Mishal 252,175,690 250,193,589 (2) e. Chaudhry 256,940,312 256,940,312 f. CALSON 244,805,440 244,805,440

(1) 5% rebate on Bills No 1 to 6. (2) 0.786% rebate on all items excluding PS.



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18.8. Summarized Status. Summary of evaluation tabulated below indicates the comparative position vis-à-vis the Engineer’s Estimate of Rs 184.617 million (CSR-2009 + 9.1%): -

Lowest Ranking

Contractor (M/s)

Announced Bid (Rs)

Corrected Bid (Rs)

Variation

1st AKC 211,419,012 211,419,012 +14.52% 2nd RMCC 230,548,562 230,548,562 +24.88% 3rd Sachal 240,767,055 240,677,055 +30.37% 4th Mishal 250,193,589 250,382,229 +35.62% 5th Chaudhry 256,940,312 256,939,586 +39.17% 6th CALSON 244,805,440 258,836,490 +40.20%

18.9. Recommendation. The Tender Acceptance Committee has recommended award of work to the lowest evaluated bidder M/s Abdullah Khan & Co at their evaluated bid price of Rs 211,419,012/-. 18.10. Proposal. NHA Executive Board is requested to approve the above recommendation. Board’s Deliberations 18.11. The Member (Planning) presented details. 18.12. Matter was discussed & cleared by the Board. Decision 18.13. The Executive Board approved award of works for “construction of Deharr Road from Khad Factory to Pul Khadal, Multan (km 0+000 to 5+600) – Pack-I” to the lowest evaluated bidder M/s Abdullah Khan & Co at their evaluated bid price of Rs 211,419,012/= (Rupees two hundred & eleven million, four hundred & nineteen thousand and twelve) only; which is +14.52% the estimated cost of Rs 184,616,643/-

(CSR-2009+ 9.1%). Action By : Member (Planning)



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19. Agenda Item 16 Revised PC-I for Amri - Qazi Ahmed Bridge Across River Indus (Between Hyderabad Bypass and Dadu - Moro Bridge) Connecting N-5 with N-55

Introduction - Working Paper 19.1. Introduction.

a. PC-I for construction of Amri - Qazi Ahmed Bridge across River Indus (between Hyderabad Bypass and Dadu -

Moro Bridge) connecting N-5 with N-55 was approved by ECNEC at a rationalized cost of Rs 3,683 million on Jan 21, 2010.

b. Scope of work envisaged construction of a 2-lane,

1,241 m main Bridge with 15.431 km approach roads, construction of 2-flyovers (each at interchanges at

N-5 & N-55), guide banks & other allied structures. c. PC-I has been revised by modifying the Bridge from

2-lane to 4-lane in view of verbal instructions of the President of Pakistan to the Chairman NHA. Revised PC-I cost comes to Rs 5,290.418 million at pre-award status. Length of the Bridge and approach roads remains unchanged.

19.2. Salient Features.

a. Main Bridge

: 1241 m

b. Bridge Width : 19.825 m c. Lanes : 4 d. Approach Roads : 15.431 km e. Guide Banks (Approx) : 2 km

f. Allied Structures : Bridge across RBOD

Flyover/Bridge on N-5 Flyover/Bridge on N-5

Approach ramp & loops at N-5/ N-55



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19.3. Reasons for Increase in Cost.

a. 2-lane Bridge converted into 4-lane. b. Tendered rates used for awarded works (Bridge &

approach road from left abutment of Bridge to Qazi Ahmed). c. Increase in overheads.

19.4. Project Cost. Original and revised costs of the project compare as below. Detailed comparison is at Annex-L:-

Cost Rs in Million Variation

a. Original 3683.000 --- b. Revised 5290.418 +43.64%

Note. Nil FEC component.

19.5. PSDP. Rs 500 million allocated in PSDP 2012-13. 19.6. Implementation. Project is scheduled for implementation in 36 months after commencement in FY 2011-12 depending upon availability of funds. 19.7. Economic Analysis.

a. Benefit Cost Ratio : 4.904 b. Internal Rate of Return : 36 % c. Net Present Value : Rs 15245.44 M

19.8. Proposal. The Executive Board is requested to recommend the revised PC-I costing Rs 5,290.418 million to the CDWP/ ECNEC for approval. Board’s Deliberations 19.9. The Member (Planning) presented details. 19.10. The Chairman remarked that the President of Pakistan has desired completion of this project by Dec 31, 2012. The work is progressing at a fair pace as the contractor has imported a “Rig” for expediting pile work.



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19.11. The VP-NESPAK observed that the traffic level (count) mentioned in the PC-I do not justify construction of a 4-lane bridge. 19.12. The Member (Planning) responded that bridge has been converted to 4-lanes as directed by the President. However, the approaches will be constructed as 2-lane to be upgraded in future as per traffic needs. He added that a monitoring team of the Planning Commission, which recently visited the project, also recommended for preparation of revised PC-I for a 4-lane bridge. 19.13. Matter was discussed & cleared by the Board. 19.14. The Chief (T&C), however, desired that while submitting revised PC-I to the Planning Commission a copy of the instructions regarding modification of the subject bridge from 2-lane to 4-lane may also be provided. Decision 19.15. The Executive Board recommended the revised PC- I for Amri - Qazi Ahmed Bridge across River Indus (between Hyderabad Bypass

and Dadu - Moro Bridge) connecting N-5 and N-55 at a cost of Rs 5,290.418 million to the CDWP/ECNEC for approval. Action By : Member (Planning) 20. Additional Agenda Item

Issuance of Tender Documents to National Logistic Cell (NLC) for NHA’s Projects

Introduction - Working Paper 20.1. A part of “Shershah Bridge” on Karachi Northern Bypass Project constructed by National Logistic Cell (NLC) collapsed in 2007. Subsequently, Ministry of Communications instructed that “no work should be awarded to NLC on any NHA projects till the inquiry regarding collapse of Shershah Bridge is finalized.” 20.2. NLC communicated that they were exonerated from blame of collapse by the PMIC Inquiry Team vide Prime Minister’s Inspection Commission UO No F/2(100)SM-2008-PMIC dated Apr 11, 2008 conveying that the Prime Minister has approved implementation of “Findings and Recommendations” contained in the Inquiry Report.



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20.3. The recommendations for NLC in the PMIC Inquiry Report were as under:-

a. NLC should invest heavily in acquiring machinery and equipment and must equally try to acquire latest construction techniques and training of personnel.

b. NLC, where distinct weaknesses have been identified

in its human resource and competence must acquire services of competent officers and other professionals through a competitive process, if NLC at all is keen in carrying on as a contractor.

20.4. Matter was placed before the NHA Executive Board seeking guidance / policy decision for pre-qualification of NLC and issuance of bidding document. The Board directed NHA to seek instructions from MoC (209th meeting of Nov 3, 2011). 20.5. The case was accordingly referred to MoC which, on Mar 12, 2012 advised, as under:-

“whether the Executive Board of NHA has deliberated the issue keeping in view the findings of Inquiry Report and if not, then the same may please be first discussed and recommendations may be sent to this Ministry for further processing of the case.”

20.6. NLC, on consultation, has intimated, as follows:-

a. NLC being a fast growing organization is always endeavoring to build its capacity by induction of new plant & equipment besides hiring trained manpower. NLC has already inducted 53 x pieces of plant from Japan during 2007 and 42 x pieces from Germany, total holding is 539.

b. NLC’s manpower strength is 2564 & the organization

has been restructured by creating 3 x Project Director Offices at Rawalpindi, Lahore and Karachi, thereby making it possible to look after projects allover the country.



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c. NLC has a state-of-the-art training school at Mandra where education regarding different civil engineering technologies is imparted.

d. NLC is executing projects valuing more than Rs 83

billion which speaks of its capacity building. In view of the above, NLC may be considered as pre-qualified for any future project.

20.7. Proposal. The Executive Board is requested to deliberate the issue in view of the findings of the Inquiry Report and details provided by NLC & make recommendations for consideration by MoC. Board’s Deliberations 20.8. The Member (Planning) presented details. 20.9. Matter was discussed & cleared by the Board. Decision 20.10. The Executive Board accorded its no objection for pre-qualification of National Logistic Cell (NLC) for award of construction projects by NHA and advised that this may be conveyed to the Ministry of Communications for further instructions. Action By : Member (Planning)

21. Monitoring of Maintenance Schemes / Works 21.1. During the course of deliberation on the working paper concerning AMP 2012-13, the AS (Finance) enquired if any regular / permanent monitoring system exists in NHA for maintenance schemes / expenditure and asked for the details? 21.2. The Chairman responded that different tiers of monitoring system presently exist:-

a. A GM (Inspection) with necessary support staff is functioning directly under the Chairman NHA.

b. An internal Audit Wing headed by a GM with

necessary support staff is also functioning directly under the Chairman NHA.



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c. Monitoring teams headed by capable GMs enjoying good reputation assisted by two officers each of the level of Director / DD have been constituted for each region. These teams carryout random check of selected schemes and confront the Regional GMs and their staff for detailed scrutiny.

d. The DDs (Monitoring) are also posted in all the

regions for review of maintenance works including measurements, quality and final bill.

21.3. The Chairman remarked that NHA would welcome any suggestions from the Executive Board for improvement of the monitoring system. 21.4. The AS (Finance) appreciated the update and suggested that a formal briefing on different layers of monitoring of maintenance schemes/ expenditure in NHA may be presented in the next Executive Board meeting. Action By: Member (Operation) 22. Submission of Progress Report on NHA’s Maintenance

Activities to the Executive Board 22.1. During the course of deliberation on AMP 2012-13, the VP-NESPAK observed that as reiterated by him in the past in numerous meetings, the Executive Board has no oversight of NHA’s maintenance activities and plans. Region-wise progress report of schemes awarded, executed and that ongoing is also not provided. 22.2 Matter was discussed and it was decided that a bi-annual progress report would henceforth be presented to the Executive Board in Dec & Jun each year. Accordingly, the progress of implementation of AMP 2012-13 would be reviewed in Dec-2012. 22.3. The Chief (T&C) desired that summary of implementation plan, estimates & progress of AMP 2011-12 be also presented. Action By: Member (Operation)



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23. National Trade Corridor Improvement Program 23.1. The AS (Finance) remarked that he is required to handle issues concerning the National Trade Corridor (NTC) in the Finance Division particularly in the context of Energy Corridor. He would appreciate if the Executive Board is briefed on NHA’s road network and development plan in the context of NTC. He would also like to know whether the objectives of NTC are being followed or not. 23.2. The Chairman remarked that the presentation would be arranged as desired. However, he would like to state that projects which are component of NTC could be termed as NHA’s core projects. The projects which do not fall in NTC are normally resisted by NHA and are undertaken only when directives are issued. Certain projects are entrusted to NHA as deposit works also through directives and it is endeavored that such projects do not become a permanent liability for maintenance but are returned to the provincial authorities concerned after completion. 23.3. The AS (Finance) observed that NHA’s approach should be futuristic. If in the long run, the volatile situation in Afghanistan comes to rest and transit trade for Iran, Afghanistan, Central Asian Republics and even India increases substantially, it should be ensured that our key arteries are fully in place and there are no gaps to reap real benefits from inter-regional trade and transit trade.

23.4. Note. The map of NTC and list of projects falling in NTC and its linkages are at Annex-M. 23.5. The Chairman added that NHA has also planned to handover all road sections of various national highways passing through urban areas for which NHA has constructed and maintaining bypasses to the respective local, district or provincial authorities and a working paper to this effect will soon be submitted to the Executive Board for approval. Action By: Member (Planning) & Chief Coordinator (AP) 24. Conclusion 24.1. The Chairman wrapped up the meeting by thanking the Board Members for their active participation and useful input. He also expressed gratitude for the fact that the Board Members spared extended time, which helped dispose off voluminous agenda on a day of fasting.

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EXTRACTS

CONFIRMED MINUTES OF THE

219TH EXECUTIVE BOARD MEETING JULY 24, 2012 AT ISLAMABAD