A recent audit of the project to improve the project to improve the Kyber Pakhtunkhwa (KPCIP) project, which is 97 billion rupees (KPCIP) for financial variations of up to 8.48 billion rupees, including mixing imbalances, illegal payments, and wasted expenditures, News I mentioned.
The results raised concerns about governance, supervision and accountability in the province. The Asian Bank, which was launched in late 2022, aims to enhance urban infrastructure in Abbottabad, Kohat, Mardan, Mingora and Peshawar, with the expectation of completion by the end of 2026.
However, the scrutiny highlights cases of financial mismanagement, including unauthorized work, cost escalation, and payments for unreasonable projects.
The money, which mixed the imbalance of 8.8 million paid rupees for a work that was never implemented, and 11.2 million rupees were required to install the glass fiber in the parking area. Fake measurements led to losses of 34.89 million rupees, while 5.48 million rupees were paid for drilling work in the chlorine building, although there is no financial progress. In total, 60.39 million rupees were different through fraudulent claims.
The report also referred to the payments made at inflated rates, including 1.05 billion rupees to grant the same work at higher costs and 38.91 million rupees spending on vehicle purchases that exceed the project’s approved capacity.
Unauthorized amendments on the project scale led to additional expenses worth 463.3 million rupees, 28.39 million rupees were spent on the defective green spaces initiative, and 812.24 million rupees were allocated to public tanks based on inaccurate cost estimates. The escalation of the irregular cost added 441.4 million rupees, which led to the total financial impact of unauthorized expenditures to 1.74 billion rupees.
The review also set questionable payments for contractors, including 2.53 billion rupees for construction supervision under unclear conditions. Additional financial losses included 11.08 million rupees in an unjustified escalation, 16.13 million rupees in excess payments due to enlarged quantities, and 157.4 million rupees in an irregular escalation of consultants. Unauthorized rewards and excessive payments contributed to a total loss of 3.73 billion rupees.
The delay in the project and the escalation of costs paid the expenses by 41.77 percent, which led to an additional burden of 441.4 million rupees. The government also failed to recover 105.6 million rupees of delay penalties, which increased the inefficiency that costs a total of 547 million rupees. The review found that the contracts were granted at higher rates, causing losses of 1.7 billion rupees, while 76.06 million rupees were paid in excessive monthly salaries for consultants. Excessive pricing resulted in additional variations of 263.4 million rupees, and 49.47 million rupees were paid beyond the actual progress of the project.
The report also referred to the violations of employment, with the appointment of the project employees without a suitable test. Insurance contracts were granted to a private company instead of the National Insurance Company (NICL), and 47 million rupees were paid in US dollars instead of a Pakistani rupe, which violated the approved financial instructions.
The KPCIP administration stated that the review covered the fiscal year 2023-24 and focused mainly on civil business payments under local purchasing laws, while ignoring the purchase policy in ADB.
The administration confirmed that the contracts were granted under FIDIC Agreements and expressed confidence in resolving audit objections through the Administration Accounts Committee.
He also indicated that the initial audit report in December 2024 contains 72 objections, which was later reduced to 34 after clarifications. In addition, the ADB exchange team conducted its own review, confirming that KPCIP expenditures are in line with the ADB loan and financial procedures.
