ISLAMABAD: Pakistan’s Auditor General has uncovered significant financial irregularities in the K-IV water supply project, revealing that contractors were allowed to retain Rs9.207 billion in mobilization advances beyond the period permitted under their contracts, resulting in what the audit described as an undue financial benefit.
According to the latest audit report, the outstanding amount remained unrecovered despite the expiry of the agreed repayment period, raising concerns over weak contract management and financial oversight in one of the country’s major infrastructure projects.
The audit has recommended that the outstanding funds be recovered immediately and that the relevant authorities ensure strict compliance with contractual provisions to prevent similar irregularities in future public sector projects.
The report states that between May and September 2022, authorities awarded seven contracts for various construction components of the K-IV project to five contractors.
Subsequently, between June and November 2022, the contractors were collectively paid Rs14.712 billion as mobilization advances to facilitate the commencement of construction activities.
However, the audit found that Rs9.207 billion of this advance remained outstanding even after the contractual recovery period had elapsed, contrary to the terms of the agreements.
The Auditor General’s report warns that the delay in recovering the advances provided the contractors with an extraordinary financial advantage while exposing public funds to unnecessary risk.
The audit has called upon the relevant authorities to enforce contractual obligations rigorously, recover the pending amount without further delay, and strengthen financial controls and monitoring mechanisms to ensure transparency and accountability in the execution of large-scale public development projects.
The K-IV project is a major water supply scheme intended to improve the availability of potable water for Karachi, making effective financial management and timely implementation critical to the project’s success.
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