Chinese firm raises concerns over delays in ADB-funded road project, calls for fair competition

NINGXIA Communication Construction Co Ltd (NXCC), the lead firm in the consortium awarded the ADB-funded CAREC-III project, has raised concerns over delays caused by various entities involved in the project. The firm warned that such delays could compromise transparency and fairness, ultimately discouraging competition.

In a letter to the National Highway Authority (NHA), NXCC objected to additional document requests made after the bidding process had concluded, including detailed payment records and tax certificates. The company argued these requests went beyond the original tender scope and called for clarification on whether they were aligned with the bidding document’s specific clauses. 

NXCC expressed willingness to cooperate but cautioned that if fairness was undermined, it may seek legal recourse.

The CAREC-III refers to Tranche-III of the Central Asia Regional Economic Cooperation (CAREC) Corridor, a project to dualise the 330 km Indus Highway (N-55) between Rajanpur, Dera Ghazi Khan, and Dera Ismail Khan from two lanes to four lanes. However, the project is facing legal challenges regarding contract awards.

In the letter, NXCC reiterated its commitment to completing the project on time but warned that further delays could damage public trust and increase costs for all parties involved.

In a separate communication to the Economic Affairs Division (EAD), NXCC called for the removal of its name from Pakistan’s blacklist, refuting claims that it had ever been blacklisted domestically or internationally. The company pointed to a 2023 legal dispute involving the Lodhran-Multan project, where the Islamabad High Court referred the matter to arbitration. NXCC fully accepted the court’s arbitral award in November 2024, reaffirming its readiness to resume work on the project once it receives a directive from NHA.

NXCC warned that continued delays in the Lodhran-Multan project had already caused significant financial and reputational damage. It requested NHA to clarify publicly that the firm had never been blacklisted, adding that any further suspension would have detrimental consequences. The company is prepared to mobilize immediately once the project recommencement order is issued.

Earlier in February, NXCC secured contracts for all four sections of the Rs170 billion Tranche-III project, which drew criticism from several construction companies. 

The contracts were subsequently challenged before the National Highway Authority’s (NHA) Grievance Redressal Cell (GRC). M/s Zahir Khan & Bros (ZKB) contested Lot-1, M/s Zhonggang Construction Group-Matracon-AWK JV filed a grievance against Lot-2, M/s ZGCC-Matracon objected to Lot-3, and M/s ZKB-Sultan Mehmood & Co JV raised concerns over the awarding of Lot-4 to NXCC.

The issue was also brought before the Senate Standing Committee on the Economic Affairs Division, which uncovered what it described as “massive corruption, ghost tendering, and illegal contracts.” 

In response, on August 26, Prime Minister Shehbaz Sharif suspended eight senior NHA officials and formed a high-level inquiry committee to investigate the alleged irregularities, collusion, ghost tendering, and other issues surrounding the Rs170 billion CAREC Tranche-III international road project.