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Above $4m embezzled in Embassy Complex project

Above $4m embezzled in Embassy Complex project

Aug 24, 2019 - 11:35

KABUL (Pajhwok): Above four million dollars embezzlement has taken place in the construction of Afghanistan’s Embassy Complex in Islamabad by then authorities, Pajhwok Afghan News has reliably learnt.

Documents show officials had provided the opportunity of obtaining an additional four million US dollars for the construction company tasked with building the complex.

The property of Afghanistan’s Embassy in Islamabad is spread over seven acres of land in the capital’s diplomatic enclave.

The property was purchased in 1960 by SardarDaud Khan against 58 million rupees, but due to lack of a building, the embassy offered consular services in rented facilities.

After the National Unity Government (NUG)’s coming into power, efforts for construction of the embassy complex were accelerated and a contract worth $16 million was inked in mid 2017 between then Ambassador Omar Zakhelwal and Anhoni Chinese Construction Company (ACCC).

Construction work on the complex was started on August, 20, 2017 and over 32 percent work has been completed.

Inspection team’s report on major problems in the project:

The inspection team of the Ministry of Foreign Affairs (MoFA) in its report has talked about the lack of sincerity on the part of the Chinese construction company to complete the project and has said the company did not act upon its promises.

The report says after inspecting the volume of the work, in most cases the price of each volume has been identified by the company but the prices were not summed with the total value of the contract.

The inspection team has termed this a major fault in the contract related materials and wrote that due to accounting error amount, four million dollarshave been extra added to the project.

The report further says unnecessary items are included in the volume of work which in fact has no connection with the project owner. If these items were subtracted from the main project, the value of total project would decline by millions of dollars.

The inspection team has demanded the contract should have been evaluated and inspected by a professional team before it was awarded to the construction company and deplored that massive financial and technical faults had happened in the contract.

Problems of Afghan Inspection Company

According to the findings of the inspection team, initially an offer of $1.50 million was made by different companies to inspect the construction work but the inspection contract was awarded to an Afghan company, ACCU, which jointly works with a Pakistani company against around one million dollars.

The report said the inspection company did not provide educational documents of key employees to the embassy and did not record the progress of work or inspected other vital components of construction work such as steel bar and thickness of the concrete.

According to a MoFA source, some companies were ready to carry out the inspection work against $100,000 but high ranking officials at MoFA offered the inspection work to an Afghan company against a huge cost.

The source said the Afghan Company then awarded the inspection work to a Pakistani company which was not registered in the beginning.

The project was inspected by Pakistani engineers while an Afghan engineer was lately sent to inspect the work, according to the MoFA source.

MoFA officials who managed to obtain the inspection contract for the Afghan Company distributed $300,000 out of total $972,000 among themselves and gave the remaining amount to the company.

The projected needed nine generators and two generators with similar characteristics were purchased at a cost of $30,000, while seven more generators were purchased at a cost of $80,000.

Another reliable source said the Chinese Company after getting the contract awarded the project to another company against a five percent interest but this attempt was thwarted by the embassy. 

Concerns of current Afghan diplomats in Islamabad

Shukrullah Atif Mashaal, Afghanistan envoy to Islamabad, confirmed there were many financial and technical problems in construction of the building for Afghanistan embassy in Pakistan and said, “In the contract, information about the construction process has not been properly explained and the ground was intentionally paved for a particular company to win.”

He did not name anyone but said some figures in this project chose a specific company for awarding the contract in order to show the costs lower.

In the beginning, the quantity of the work was not clear and now the contracted company wants $3.4 million more for painting of the building, power supply, extra work and others which is against the contents of the contract, he said.

Mashaal said the issues had been shared with the Ministry of Foreign Affairs but they remained unaddressed.

Docs on problems in under construction building of Afghanistan’s embassy in Pakistan

Some other documents shared with Pajhwok Afghan News by a credible source showed problems in ACEG Company and another company responsible for overseeing the construction process of the embassy building. The documents are as following:  

A letter No. 2211 and dated February 22, 2019  says, “ACCU, the supervision company, is informed that it should provide weekly and monthly reports about the quality and development of the embassy building’s construction process, and send them to the embassy.

But neither reports were shared with the embassy, nor director of the company has so far met with embassy officials after two months passed since that date.

Another document No. 11 and dated March 26, 2019, says that the supervision company had handed over its responsibility to another Pakistani company and only one person was performing the supervision who delayed the tasks for various reasons and the embassy had to suspend that company.

The document says, “Considering sensitivity of the issue in the work area, transparency and accountability in the work process, there is a need to suspend the supervision company.”

Another document No. 141 released on April 22, 2019, is about payment of money to the Chinese company. The letter says: Besides serious problems with ACCU, Anhui Construction Engineering Co also has problems in the construction area.

“As there were three payment bills about the construction of the embassy building, to Islamabad municipality (CDA), the amount was paid by the Chinese company because of urgency in the issue and it was reported to the acquisition department through letter No. 1068 on July 27, 2018.

Now the company wants its payment back. It is worth mentioning that the payment documents of the company lack signature, the letter says.

Another letter No. 601 released on July 16 says there were many problems in the design of the project and the company involved in the design should be in close contact with supervisory company and construction company and problems in the project should be resolved in coordination with each other.

The letter, however, says the company responsible for design of the project was not ready for cooperation despite several contacts.

 The Ministry of Foreign Affairs, in replay to the letter, said, “For better development in the project, the supervision of the project is protected from any foreign intelligence factors, it is recommended that a number of engineers from foreign ministry or Ministry of Urban Development be tasked for better work on the project, the cost of our engineers staying there would be much lower compared to the cost of supervisory company.”

Former Islamabad-based Afghan diplomats

Former Afghan ambassador to Pakistan Hazrat Omar Zakhiwal said there were some serious problems with the design, contract conditions and project management and some of the problems had been addressed with efforts of embassy’s officials.

However, he referred the matter to former deputy ambassador in Islamabad Zardasht Shams, who believed Ambassador Zakhilwal deserves appreciation since it was his efforts which brought this project into implementation, as the project finally came into effect after a long wait.

Otherwise all previous ambassadors wished to launch it but due to long bureaucracy and lack of funding they couldn’t. he added.

Shams dismissed allegations against former embassy’s officials as unfounded, saying in accordance with procurement rules and regulations, embassies had no responsibility to sing giant contracts.

He said none of embassy officials, including the ambassador, were allowed to sign and change a contract worth $16 million project and all matters related to the projects were handled by the Ministry of Foreign Affairs (MoFA).

He said according to the procurement law, any contract above $ 5, 00,000 should go through a procurement process and no ministry was allowed to enter such contracts as the procurement commission belonged to the president.

Technical and financial assessment responsibility of the project was with the MoFA and the National Procurement Commission (NPC) and therefore the embassy had not right to work on the project and it was not a problem of the embassy, Shams concluded.

Shams acknowledged lapses in the project, adding it was not something new these issues were shared with the MoFA in the past two years and in addition there were some technical and procurement related lapses as well. According to him the main reasons behind these lapses were the none-availability of professionalism, procurement and engineering related capacities in the MoFA.

Shams said: “When Mashal took over as ambassador, I personally shared with him some problems related to the project such as the designing of the project because the project offered for bidding with a 10 year old design and there were some changes in Pakistani housing and construction related laws for which the embassy was bound to follow.”

He acknowledged problems in the project’s volume of construction and shared the report of central technical team with the government two times but according to the law the monitoring and evaluation team should have pointed out these flaws before the announcement of company that win the bidding in low price which according to him was not done.

Naseer Ahmad Andesha, worked as deputy minister at MOFA leading finance and administrative affairs, when the project was launched. He is currently serving as ambassador of Afghanistan in Switzerland and could not reach for comment.

Acquisition Department of Foreign Ministry

AjmalHamidi, MoFA acquisition’s head, said after efforts and support of the former ambassador to Islamabad, the foreign minister, the finance minister and especially the president, the project was conducted under the procurement process in accordance with the host country’s laws.

He added the contract of the embassy complex in Islamabad was signed with a Chinese semi-state firm and around $ 1 million was contracted with a company to oversee the project.

He said the total cost of the project was above $16 million and around $ 1 million was contracted with a company to oversee the project.

Hamidi referred to the map’s implementation in which the firefight system has not been considered.

Eng Syed Kamal Mayar, project coordinator and chief of the oversight delegation, said: “The problems you raised were all about which I had written but the problems remain unaddressed and all information about the second assessment is available and will be shared with media.”

But at the end of the interview, the acquisition head and the project’s coordinator refused to share the second observation report in which they said problems had been solved and said the report was not available with them right now.

It is worth mentioning that President Ashraf Ghani last week tasked a commission to inspect foreign trips, financial matters, integrity, contracts and other matters in the MoFA.

The president order the commission to probe financial matters, procurement contracts, legislative documents and compensations, signing of contracts and its procedures, sources of revenue and expenditure in the MoFA.




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