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Official Citation: 2014 SCMR 676
Court / Jurisdiction: Supreme Court of Pakistan
Year of Decision: 2013
Decision Date: 2013-09-25
Parties: ASAF FASIHUDDIN KHAN VARDAG vs GOVERNMENT OF PAKISTAN and others
This judicial decision was delivered by the Supreme Court of Pakistan on 2013-09-25. The matter involves proceedings between ASAF FASIHUDDIN KHAN VARDAG and GOVERNMENT OF PAKISTAN and others, officially reported as 2014 SCMR 676. The court reviewed applicable Pakistani statutes, procedural requirements, and governing case-law authorities. The full text below contains the complete facts, arguments, and legal reasoning rendered by the honorable bench.
Case cited as 2014 SCMR 676
Court Name: Supreme Court of Pakistan Judge(s): Jawwad S. Khawaja, Iftikhar Muhammad Chaudhry, Sh. Azmat Saeed Title: ASAF FASIHUDDIN KHAN VARDAG vs GOVERNMENT OF PAKISTAN and others Case No.: Constitutional Petition No,33 of 2013 Date of Judgment:2013-09-25 Reported As: 2014 SCMR 676 Result: Order accordingly
Judgment ORDER ' IFTIKHAR MUHAMMAD CHAUDHRY, C.J.---The Petitioner, Mr. Asif Fasihuddin Khan Vardag, an Advocate of Supreme Court of Pakistan, has invoked the jurisdiction of this Court under Article 184(3) of the Constitution of Islamic Republic of Pakistan by means of the instant petition. 2. The petitioner, inter alia, has alleged corruption in the higher echelons of the government in the construction and completion of New Benazir Bhutto International Airport Project, Islamabad (NBBIAP), which was required to be completed at the cost of Rs,35 billions; and as it has not been completed on the due date i,e, December, 2011, the initial cost of Rs,35 billion now has shot up to Rs,73 billion. He further averred that there is every likelihood that the cost may further be escalated to Rs,90 billion. The petitioner further alleged that Air Marshal (R) Khalid Chaudhry, who is respondent No, 3 herein, was appointed as Director General, Civil Aviation Authority (DG, CAA) through executive arrangements made by the then Minister for Defence without observing legal formalities and therefore, he has pivotal role in this organized loot. In addition to this he has also been given the charge of another mega project, namely, the Multan International Airport. 3. The above facts, particularly allegations of corruption, necessitated this Court exercise its jurisdiction under Article 184(3) to examine, inter alia, whether the appointment of incumbent DG, CAA had been made in accordance with law and in adherence to the principle of transparency; and also to ascertain the status of the construction of both the above said airports. The DG, CAA submitted a concise statement (C.M.A.4379/2013) in which he has annexed an Inquiry Report prepared by Lt. General (R) Shahid Niaz, Chairman of the Inquiry Committee constituted by Ministry of Defence fixing the responsibility upon all concerned for causing delay in construction of the
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airport. He was also directed to place on record, for our perusal, a study report. Relevant facts from the report of General (R) Shahid Niaz are as under:-- "The first development strategy (Feasibility) of the New Benazir Bhutto International Airport Islamabad was prepared by the French firm Messrs Airport De Paris (ADPI) in association with NESPAK in October, 1984. It was concluded in the study that construction of the airport at a new site will be more feasible/economical than the expansion/up gradation of the existing International Airport at Chaklala. The new site selected/studied was located at Pindh Ranjha in Attock and Rawalpindi districts. The CAA started the purchase of land in 1986 through 2008 at Pindh Ranjha. ' After a lapse of 22 years, the need for another feasibility study was felt necessary and therefore in 2006 the preparation of Master Plan was assigned to Messrs Louis Berger Group (LBG) USA and Messrs ECIL as joint venture partners. Later the same group was also selected as the Project Management Consultant (PMC) for NBBIAP by following due process of selection. ' In March 2007, the CAA Board on recommendations of the PMC, approved Messrs CPG Airports, Singapore as design consultant for Passenger Terminal Building (PTB) and the design work of remaining components of the project were assigned to Messrs ADPI France & NESPAK (IV). ' In March 2008, CAA Board approved the PC-I of the project at a cost of Rs, 37 billion, based on the Master Plan prepared by the Messrs LBG. However, the ground breaking ceremony of the project was conducted earlier on 7th April, 2007 jointly by the then President and Prime Minister of Pakistan and it was directed by the Prime Minster of Pakistan to get the project completed in 30 months period. Although the detailed engineering designs of the project were not ready by that time except for design of the Airside Infrastructure, CAA has reported that in compliance to the directives of the Prime Minister, site preparatory works of the runway was immediately started through package 00 in February, 2007. ' Against the approved PC-I cost of the project Rs, 37,000 Million, 10 contracts out of 17 packages (excluding cost of land, management and design) have been awarded at a total cost of Rs, 46,669.19 Million till September 2012. The contracted cost of these 10 packages is 26% higher than the overall approved cost of the PC-I. The expenditure incurred till September 2012 is Rs, 16,501 Million being 44.6% of the approved PC-I cost. ' CAA prepared a revised PC-I at a cost of Rs, 66 billion in March, 2012 while keeping in view the cost incurred and expected increase in the overall cost of the project. The revised PC-I was considered in 140th meeting of CAA Board held on 16th April, 2012 where in the Secretary Defence/Chairman CAA Board observed incoherence between the overall expenditure incurred and the physical progress of the project. The Secretary Defence constituted a Committee under the chairmanship of Lt. Gen. (Retd) Shahid Niaz, Member (I&M) Planning Commission with Additional Secretary (Military Finance), Finance Division, Director General, CAA and Director, Planning and Development, CAA as members to conduct an inquiry under the following parameters:-- (a) To conduct a comprehensive study/audit of the project. (b) To inquire into the reasons for increase in the cost of project (c) To identify the persons responsible for this state of affairs and to fix the responsibility. (d) To suggest ways and means to bring this project on track for its expeditious completion. Since detailed audit of the project upto February, 2011 has been conducted by the Auditor General's Office and report to that effect has already been published/submitted, so to avoid duplication of effort it was decided by the Committee to conduct performance audit of the project. Accordingly Ministry of Defence was informed vide letter No, 4(16-133)/PC/T&C/ 2012/Vol-IX dated 9th August, 2012 placed at Annex-II. ' In order to expedite and facilitate the Inquiry Committee, the Chairman of the Committee Lt. Gen. (Retd.) Shahid Niaz constituted a sub-committee comprising Engr. M. Mustansar Khan, D.G. Projects Wing, Mr. Munir Ahmed Anjum Chief (T&C), Planning Commission, Mr. Muhammad Musharraf Khan,
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PD (NBBIAP), Mr. Rouhullah, Acting Director, P&D, CAA, Mr. Amir H. Sikandar, Deputy PD Finance (NBBIAP) and Mr. Noor Alam, Deputy Secretary, Ministry of Defence. ' Following course of action has been adopted to complete the assignment:-- (i) Obtaining relevant record and data from CAA, for which a set comprehensive formatted document was provided by the committee. (ii) Meetings/Discussions with the concerned officials and other stakeholders. (iii) Frequent site visits to the projects site/project office by members of the sub-committee. (iv) Scrutiny of the records and reconfirmation through acquisition of related documents. 4. Khawaja Haris Ahmed, learned Senior Advocate Supreme Court appearing on behalf of Messrs Lagan - Technical - Habib Joint Venture (LTH-JV), on our query, pointed out that the CAA Board, in its 140th Meeting held on 16-4-2012, expressed its extreme displeasure on the progress of NBBIAP. Thus the Inquiry Committee was constituted by the CAA Board to fix the responsibility by identifying the persons responsible for the state of affairs of the project and provide suggestions to put the project on the right track for its earliest possible completion. 5. The Committee was required to conduct performance audit in such a manner that it shall not hamper the overall progress of developmental works at the site and was required to submit its report to the Secretary Defence/Chairperson CAA Board within a period of 30 days from receipt thereof. The Committee, however, submitted its report on 23-1-2013. 6. It is to be noted that the Inquiry Committee could not complete its task within the stipulated period of 30 days as was required in the notification of appointment of Inquiry Committee, but it was noted'in the report itself that flow of information and provision of relevant documents/record from the concerned authorities of CAA had been a sore issue and it was a major reason for the slow progress of the Committee proceedings. It was only through intervention of Ministry of Defence at the request of the Sub-committee through various letters/communications that the requisite information was provided. However, till the writing of that report, CAA was unable to provide the complete set of information required by the Inquiry Committee. In this very context, it is interesting to note that attitude of CAA was non cooperative towards the Inquiry Committee. Although Air Marshal (R) Khalid Chaudhry, incumbent DG, CAA was one of the members of the Inquiry Committee he provided no information about cost of the project or the feasibility study to the Inquiry Committee. It is true that at the time when feasibility study was carried out, someone else was DG, CAA. However, at the time that the Inquiry Committee was conducting its investigations, Air Marshal (R) Khalid Chaudhry was the head of CAA and overall in charge of the executive functionaries. Therefore, he was in a position ensure their cooperation and to place all the important documents before the Inquiry Committee, but for the reasons best known to him the needful was not done. The Inquiry Committee, on the basis of whatever material brought before it, prepared a report which suggests that final Master Plan/report was prepared by the Joint Venture of Messrs Louis Berger Group, USA (LBG) and Engineering Consultants International (Pvt.) Ltd. (ECIL), in the month of September, 2006 and an amount of Rs,27.767 million was paid to the Consultants for the preparation of the feasibility study/Master Plan. According to the Master Plan prepared by the Consultants, an amount of Rs,27,102.1 million (which included the total overall cost of engineering, supervision, PM and Admin and Fees for the project) was required in the year 2006 for the completion of Runway, Taxiway, Apron, Passenger Terminal, Cargo Terminal, Car/Taxi Parking, Roads/Bridges/Culverts, Rescue and Fire Station, etc. However, the financial impact of the land was not included in the Master Plan. The reservations/findings of the Inquiry Committee, recorded on the preparation of the Master Plan, read as under:-- (i) "The Master Plan (2006) was prepared after lapse of 22 years which resulted in cost appreciation from tentative cost of Rs,1.267 billion (1984) to Rs, 37 billion. Main justification for delay
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as reported by CAA was the change in priority of constructing Allama Iqbal Airport Lahore over NBBIAP at Islamabad. (ii) The Master Plan developed by Messrs LBG and Messrs ECIL (JV) in 2026 lacked some essential components i,e, link taxiway, state lounge, mosque, medical centre, bachelor accommodation, APM residence, M.T. Section, boundary wall and land for future requirement. The cost of these components at present is estimated at Rs, 1.3 billion. This lapse on part of the Consultant indicates negligence." 7. Similarly, in respect of the Land Procurement, after having gone through the facts of the matter, following findings were recorded by the Inquiry Committee:-- (i) "Acquisition of land was started in 1986 under Land Acquisition Act, much before the approval of the PC-I which was accorded in 2008. Initially, the land was purchased at the average price of Rs, 44,896 per acre whereas the rate calculated in the original feasibility of 1984 was Rs, 12,140 per acre. (ii) After the purchase of land in 1986, the purchasing activity continued till 2008. The land purchased during the period 1986-2008 was 3287 acres. The average cost comes to Rs,277,037 per acre which is 22 times higher than the cost estimated in the feasibility of 1984. The responsibility for substantial increase in cost of land can be attributed to inaction on part of the CAA, for failing to procure the required land in the minimum possible time. The process for purchase of land was continued for 22 years and even then the total procured land may not be sufficient for the future operational requirement of the Air Port as reported by Project Authorities. (iii) In the feasibility study/master plan of 2006, the requirement of 3155 acres of land was worked out on the basis of catering the needs upto 2035. These projections were made by using historical, demographic and socio economic data for the region and the country, presented in terms of annual number of passengers, aircraft operations and cargo for each year upto 2035. The breakup of the land use is attached at Annex-IV. In the given circumstances purchase of additional 137 acres of land is not justified. (iv) An amount of Rs, 910.622 million has been paid on account of purchase of 3,287 acres of land. The said amount is not the part of the approved PC-I. (v) It has been observed that further Rs, 2000 million has been kept in the approved PC-I for purchase of additional land. The said amount has been decreased to Rs, 900 million in the revised PC-I. In the given scenario, once 137 acres of excess land is already acquired, the original PC-I had Rs, 2000 million whereas the revised PC-I has Rs, 900 million for additional land, the consultant and CAA both are not sure about the actual requirement of land even at such an advanced stage of the project. (vi) CAA has purchased 132 acres of land more than the estimates of Feasibility Report/Master Plan estimate 2006. (vii) According to sponsors there are many left over areas embedded in the acquired piece of land. Reportedly, the sponsors have a plan to acquire these areas to address the flight safety and security issues. Purchasing/clearing the land at this stage of development of the Airport will have a huge financial impact. It is reported that some embedded areas still exist in the acquired land and where over 80 persons are still residing within the project area. This is a serious issue and needs immediate addressal. Detail of the embedded land is at Annex-V. (viii) It appears that the PMC while submitting the final Master Plan of the airport had not comprehensively worked out the proper use of land hence the total requirement of land is not yet finalized. (ix) The Planning and Development Directorate, Civil Aviation Authority also bears the responsibility for not correctly working out the detailed requirement of land in consultation with the Consultants." ' It is equally important to note that Mr. Afnan Karim Kundi, learned counsel for CAA has provided following project-wise details of each project:--
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(E) CONSULTANT FOR THE PROJECT (F) PROJECT MANAGEMENT UNIT (PMU) (G) PLANNING (H) EXECUTION (I) PERIPHERAL FACILITIES (J) CONCLUSION ' The Inquiry Committee under the heading "CONSULTANT FOR THE PROJECT", thoroughly examined the status of the Project under following sub-headings : (1) Project Management Consultant (PMC) (2) Messrs CPG Airport (Design Consultant for Passenger Terminal Building) (3) Messrs ADPI-NESPAK JV (Design Consultant for the project except PTB) ' The Inquiry Committee also recorded its findings including' one wherein division of the project of construction of Airport into 17 different packages was termed as indicative of poor planning. The same finding is reproduced herein below:-- "(vii) As per standard engineering practice adopted for development of major airports, the whole construction activity is normally divided into two major parts, one Airfield infrastructure and second Landside Infrastructure, the work is then awarded for execution to one or two internationally renowned and experienced firms. The division of this project into 17 different packages is indicative of power planning. It may be highlighted that the PMC in the Minutes of Contract Negotiations at Annex-XII has clearly and in unambiguous terms recommended to adopt an approach with two main contracts, one for the airfield, taxiways, utilities, water, drainage, fuel farm and lighting etc and a second contract for the terminal and all ancillary facilities. The view point given by CAA, that subsequently in May, 2008 the PMC advised to split the work in various packages is not cogent as ultimate decision rested with the client. The only plausible reason for splitting the work into so many packages is due to non-availability of timely designs. If at all the work was to be split, it could have been managed by having more compact packages, which could have helped in cutting down the costs and time over runs, besides eliminating the inter face problems." 8. With regard to Project Management Unit (PMU) following findings were recorded:-- (i) PMU for the project was never notified by the authorities hence the distribution of work and specific duties to be performed by the members could not be determined in the absence of an approved TOR, which is a serious lapse on part of CAA. (ii) There have been frequent changes of the Project Director i,e, five Project Directors have worked during the period 2006-till date 2012, which has adversely affected the progress and management of the project as a whole. It may be mentioned that for any public funded project the project director of the project has to be appointed and should remain with the project till its completion. (iii) Some of the officers indicated in the PMU incumbency position were employed part time performing duties other than the project. (iv) The PMU has not been able to perform its basic and effective role of the clients (CAA) check through the PMC on various activities of the project." 8. Under the title "PLANNING" the Committee has, discussed original PC-1, considered in the Development Working Period (DWP) meeting of Ministry of Defence held on 19-3-2008 and revised PC-1, prepared jointly by Messrs LBG & NESPAK in March, 2012 at the cost of Rs,66 billion including Foreign Exchange Commission (FEC) of Rs,16 billion (equivalent to US $ 180 million valued at Rs,80.62 for expenditure already incurred and Rs,90/US$ for expenditure on balance work), which was considered in the 140th meeting of CAA Board held on .16-4-2012 and was deferred subject to submission of Inquiry Committee Report. In the Revised PC-1 an amount of Rs,46.2 billion has been reflected to be financed from CAA's own resources and remaining Rs,19.80 billion through borrowing. The following reasons/justifications were given for revision of the PC-I on account of
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non-inclusion of certain essential facilities overlooked by consultants while preparing the original PC-I:-- {{TABLE}} 1. Site preparatory works Rs, Million 2. Airside Infrastructure: 179 Airfield lighting System 1,004 Hydrant Refueling System 1,236 ATC equipment & NAVAIDS 1,530 ATC, FCR, RADAR and Radio Building 1,470 Additional Aprons, Taxiways and Remote Parking 1,000 for State Lounge Other Miscellaneous additions 1,553 Total: 7,793 3. Passenger Terminal Building: (Addition of passenger boarding bridges, PCA, 400 Hz power supply) Increase of rate per sq. m. Of terminal building Original PC-I: Rs, 82,000 per sq. m. Revised PC-I: Rs, 126,900 per sq. m 11,966 Landside Infrastructure: Sewerage' treatment plant: 150 Landscaping: 400 Landscaping Building: 600 Cargo complex: 500 Additional area and facilities in landside infrastructure: Additional pedestrian link bridges and increase in 2,000 width and height of departure level bridge (2 to 4 lanes): Other miscellaneous additions (power distribution and telecommunication network): Total: 5,378 5. Other components of project cost Increase in Project Management cost 278 Increase in Airside Design Cost 104 Increase in Terminal Building Design Cost 133 Increase in contingencies 538 Vehicles (Details not given) 15 Increase in Custom duties and Taxes 1,000 Decrease in land Acquisition cost (1,000) Inflation/Escalation 3,200 Total: 4,168 Grand Total: 29,000 {{TABLE}} ' The Inquiry report finds mentioned that once the work started as per the scope of original PC-I, the project authorities divided the work of each component into different packages. During the course of implementation it was realized that there was likely to be a substantial increase in the overall cost of all the components from their indicated/estimated cost as reflected in the original PC-I. The component-wise increase in the cost of various packages has also been indicated in the report as follows:-- {{TABLE}} PC-I Sub-Heads Original Cost Rs, Million Revised Cost Rs, Million Increase
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in cost A Site Preparatory Works (Phase-1) 1,080.531 902 (178.531) Package 01: Airside Infrastructure (Civil Works) 12,928 Package 7A: Airfield Lighting System 1,004 {{TABLE}} B Package 06: Hydrant Refueling System 10,375 1,236 Package 7B: NAVAIDS/MET/ATC Equipment 1,530 Package 8C-1: ATC Complex and FCR Building 1,470 Airside Infrastructure 10,375 18,168 7,793 C Package 2: Piling Foundation Works for Passenger Terminal building 14,760 370 Package 3A: Constructing of Pile Caps for Passenger Terminal Building 471 Package 03.: Passenger Terminal building 20,640 Package 04: Special Items of Equipment 3,599 Package 05: Furniture and Signage 617 Package 09: Aircraft Stand Equipment (PB Bridges, Power Supply) 1,029 Terminal Building 14,760 26,726 11,966 D Package 8A: Landside Roads, Bridges, Drainage and Utilities 5,000 6,853 Package 8B: Electrical Power and Telecommunication Network 2,025 Package 8C2: Landside Buildings and Landscaping 1,000 Package 10: Cargo Complex and Allied Works 500 Landside Infrastructure 5,000 10,378 5,378 E Project Management Consultancy 374 652 278 F Design Consultancy (Airside Infrastructure) 410 514 104 G Design Consultancy (Terminal Building) 390 523 133 H Contingencies @3% (including CAA Establishment Charges and Overheads) 971.686 1,510 538 #TBS {{TABLE}} #TBE I Vehicles --- 15 15 J Custom Duties/Taxes 500 1,500 1,000 K Environmental Study 2.7 3 L Additional Land Acquisition Cost 2,000 900 1,100 M Escalation (Lump Sum)** 1,000 4,200 3,200 Grand Total 36,864 65,991 29,000 {{TABLE}} 10. The Inquiry Committee has noticed that process of the preparation of original PC-I was faulty. Therefore, it is appropriate to note the findings of the Committee as reproduced herein below:-- (i) The process of preparation of the original PC-1 was faulty and many important aspects were overlooked. For example, detailed breakup of cost was not given, even quantities and Unit price of major items was missing and it was not prepared strictly in line with the parameters of the feasibility report. (ii) In most of the components, lump sum provisions were made much against the formal engineering practice. (iii) It is evident that the project despite its importance and strategic nature was neither properly scrutinized, nor appraised/evaluated at the planning and the approval stages. (iv) The DWP meetings are very important, in development process as they play crucial role in the scrutiny/appraisal of proposals at technical and working level which results into improvement in the investment proposals. The CAA Board in its 125th meeting held on 19th September 2008 gave
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the ruling that CAA Board is fully empowered to approve self financed development schemes/projects of CAA. As a sequel to this decision, no meeting of CAA DWP took place till end of 2011. The decisions of DWP of CAA meeting held in March, 2008 placed at Annex-XIX were therefore violated as per procedure for approval of self financing development schemes of autonomous organizations instructions issued by P&D Division vide OM No,21(2-GEN)PIA/PC/2004 dated 18th December, 2004 placed at Annex-XX. Later, the matter was reviewed by CAA Board in 2012 and it was decided to reactivate CAA DWP. Revised PC-I was therefore processed accordingly and recommended by CAA DWP in its 11th meeting held in February 2012 for further consideration by the CAA Board. (v) As mentioned above in the period when the holding of DWP was dispensed with, all contracts awarded were without legitimate approval/authority. (vi) The original PC-1 catered for medium term development phase up to 2020 requirements while the revised PC-1 meets the projected requirements of 2035. The CAA has deviated from the recommendations of the feasibility report of 2006 in that instead of developing the airport in phases/stages; they have started construction for the ultimate phase which might result into excess capacity in an earlier timeframe. (vii) The PC-1 was not based on the parameters of feasibility study conducted by Messrs LBG in 2006 thus making the Master Plan/feasibility study redundant. This reflects poorly on management of the project at the preparation stage which is…
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