National highway authority of Pakistan is the sole owner of all the road construction projects in Pakistan and it enjoys the benefit of monopoly as no privatized organization is allowed to participate in this area. As NAH is the pure Government organization and it adopt pure bureaucratic approach to deal different construction projects. Because of this approach it faces many problems regarding planning, monitoring, organizing and everything related to a project but our research is purely related to finance wing of NAH so we will skip other departments and sort out robbers faced by NAH,s finance wing.
As mentioned that NAH handles the projects in Pakistan so there is lot of burden on the finance wing and it is very difficult to manage its funds as well as satisfying its consultants and contractors regarding payments. In viewing the payment procedures and the flow of funds to contractors and consultants we found that following are the problems faced by finance wing of NAH. O A bank Guarantee equivalent to 10% of the project cost must be provided by the contractor, against which he is liable for huge interest to the bank.
The said errant must be valid up to the date of issuance defect liability certificate of the project. Not only is the burden of interest born by the contractor but also a huge amount stuck with the bank up to the date of completion period of the Project. Due to Change in the specifications or design the quantities are varied from time to time for which variation order is required to be issued by the operation side, which is a long process and the contractor, faces the problem for receiving his actual work done. 0 The change in specification / design also result the change in completion time for which E.
O. T is required to be issued by Operation side and needs much more time for issuance. 0 The contractor also faces a lengthy chain of verifications for Project Director, Day Director. Assistant Director (Accounts) GM Member (Finance) ETC, so this actual work done for which he already spend the money received to him after long time. 0 Deduction of Retention Money and stuck the said amount with the Department the date of completion is also disturb the cash flow of the contractor. Change in rate of Income Tax issued by the Goof. From time to time is also disturbing the estimates and calculations the contractor.
Changes in the rates of items used in the Project also suffer the contractor and issuance of Escalation order / claim by the department take much more time. 0 Availability of funds and the time of releasing payments is also a headache of contractor. Change in the currency rates is also a problem of contractor. Slow processing of bill / claim by Operation and Finance Wing is very common complaint. Late correspondence for change in the contract also wastes the time of contractor. Un-experience officials also waste the time of contractor while processing the bill. National Highways By stagehands