219 executive borad meeting of nha1

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219th Meeting, July 24, 2012, Islamabad

NHA Executive Board’s Confirmed Minutes

1

NATIONAL HIGHWAY AUTHORITYSecretariat Section

CONFIRMED MINUTES

Subject:- 219th

Meeting of the NHA Executive Board Held onJuly 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 buthenceforth 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, submittedproject 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-9and 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 istrying 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 thefollowing 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 OldGT 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 beenwashed 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’ QualifiedDocumentsPurchased

BidSubmitted

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 wereopened 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

RankingContractor (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 thelowest 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 piecemealimplementation, 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 fullyobeyed. 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 decreasingthe 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 beable 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 forprocessing 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 4Review/Settlement of Frequent Issues Pertaining to“Form” of Bid Security & Performance SecurityDuring Procurement of Works


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 inPakistan.

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 alsoused 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 movedthe 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 andcommented 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 ofgoods, 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 andperformance 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).


7.9. The Member (Planning) presented details.


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 ofadmissible 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 banksof 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 authorizedsignatories 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 persuadingthe 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)


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 & facilitateinternational 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

Im act

Revised

a. Lyari - Ormara 3906.372 981.016 4797.388b. 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 Reviseda. 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-Gwadar17.855

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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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.


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 290.592Total 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-Ihas 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


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 bringingun-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, unendinglitigation 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 localinfluential’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 PriceOfferedPrice

a.AfridiOperators

Pabbi(N-5)

Near AzakhelPark (2011)

161.1 60

b.WasimBukhariBuilders

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 onprescribed 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 negotiatedtendering, 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 thelong 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)

TollPlaza

TentativeReserve Price

OfferedPrice

a. Afridi OperatorsPabbi(N-5)

161.1 100

b.Wasim BukhariBuilders

Jand(N-80)

13.9 26.05

c. Sardar & CoMansehra

(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.



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 israised 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 anumber 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 throughnegotiation. 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 guaranteedrevenue, 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 atthe 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


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, Tractorwithout 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 localand 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, andthis 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.



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 terrainand 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 8Raising of Funds by Floating Rupee DenominatedSukuk in Domestic Capital Market Against Islamabad- Peshawar Motorway (M-1)


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 saletransaction 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.


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 alsoperform 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 9Writing-Off Loss Sustained by NHA : Theft of ToyotaDouble Cabin No KN-2031, Model 2004


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 onlyfor 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 writtenoff by NHA Executive Board, being the competent forum as per Table-

XI to Chapter-10 of NHA Code.


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 approvalif 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 10Extension in Contract Appointment of Lt Col (Retd)Abid Ali Khan, Director (Engr, BS-19)


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.



this agenda item. Tabulated response rendered by the Admin Wing in

respect of each observation is at Annex-G.


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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.


14. Agenda Item 11

Fixation of Pay & Allowances in BS-19 & Payment ofArrears from the Date of Deferment to Mr Abdul

Hameed Qureshi, Retired Director (Accounts, BS-19)


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 ChairmanNHA, 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).



this agenda item. Tabulated response rendered by the Admin Wing in

respect of each observation is at Annex-H.


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.



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15. Agenda Item 12

Annual Maintenance Plan for FY 2012-13


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 formaintenance 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 48billion 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 upmaintenance 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 maintenanceneeds 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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NHA Executive Board