The Health Department awarded the contract to Pak Elektron Limited in April, though a lower bid of Rs30 million had been made by a competitor, said an official.
The entire payment was made in advance, in violation of Punjab Financial Rules and Subsidiary Treasury Rules, on the orders of the then health secretary , said the official.
The annual audit of Mayo Hospital for 2010-11 includes an audit para – a note from the auditor – stating that there were major irregularities in the installation, commissioning and purchase of the HVAC system. The matter is with the Public Accounts Committee of the Punjab Assembly.
The department invited bids for the project in November last year and MIA Corporation, Haier, PEL and Sabro applied. According to the official, PEL quoted a price of over Rs50 million while Sabro offered to do the job in Rs30 million. The contract was eventually awarded to PEL for Rs36 million.
A purchase order was issued on April 28 and the contractor was given 180 days to have the heating, ventilation and air conditioning up and running.
The medical superintendent of Mayo Hospital, Dr Zahid Pervaiz, issued a cheque for Rs30 million to PEL on May 10, and a cheque for Rs6 million on June 15.
These payments were made on the orders of the health secretary, said a senior hospital official.
The payments were made in violation of the Punjab Financial Rules and Subsidiary Treasury Rules, said an official of the Finance Department.
The contractor began civil and engineering works at the Emergency Block in May, but has fallen behind schedule. Only air ducts have been installed so far, and a hospital official claimed the copper sheeting used in their making did not meet the technical specifications approved by the Health Department.
Amjad Iqbal, general manager for Sabro, alleged that the health secretary had “hidden motives” to disqualify his firm.
“Sabro submitted the lowest bid with the correct technical specifications. There was no justification for awarding the contract to another firm. We wrote to the health secretary about it but he ignored us,” said Iqbal.
A doctor at the emergency ward complained that the work on the ventilation system was a hindrance to his work due to the noise and mess. He said the emergency block, which has 200 beds, gets over a thousand visitors a day.
A PEL employee said on the condition of anonymity that it would take another three to four months to complete the project. He said the import of equipment had been completed, apart from cooling towers and chillers. He said the project had been delayed because the work was suspended during the dengue outbreak.
Zahid Pervaiz, the Mayo Hospital medical superintendent, said the contractor would have to pay a penalty for the delay.
He said that the contractor had demanded advance payment and the steering committee for the project had approved this.
He said that the Sabro bid was disqualified on technical grounds and the deal with PEL had been approved by the authorities concerned.
He said the project was now due to be finished this month.
PEL manager Kashif Maqsood, who was present on site, refused to comment.
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