ISLAMABAD - The government of Pakistan is paying markup on 124 million US dollars loan since December 2011 and has also paid 68 million US dollars to a private Chinese company in connection with the launching of Islamabad Safe City Project but the project was never started till today, a Senate committee was informed on Tuesday.

However, the incumbent government in the light of the Supreme Court decision has yet to decide either to continue with the project or it has to be cancelled and to access what amount of liabilities it would have to bear in case of its cancellation. The same project was to be replicated for Peshawar with a total amount of 110 million US dollars.

The Senate Standing Committee on Interior that met here on Tuesday to discuss the issue of Islamabad Safe City Project observed that the agreement with Huawei was made at mush higher rates than the actual prices and the project could be completed with a much lower amount than 124 million US dollars. The chair observed that the government should blacklist Huawei. The committee sought details of the agreements made with the Huawei, the list of all officials attached with the project and the details of visits of Pakistani officials connected with the project to China.

It is pertinent to mention here that the committee never took up the matter in the previous regime of PPP when the project was actually launched. It is likely that the incumbent interior minister would oppose the project, as it was the brain idea of last government.

The previous PPP-led federal government in 2009 had initiated the Islamabad Safe City Project for the capital that included installation of 1500 different surveillance cameras at different points in the city to make the capital free from any terrorist attack or other crimes.

The National Database and Registration Authority (NADRA) was given the task to complete the project that went an agreement of 124 million US dollars with Huawei Company of China for the project and the Chinese government offered the loan for it on concessional basis.

However, the project is lying pending because it became victim of many controversies including allegations of corruption till the Supreme Court of Pakistan took a notice of the issue. The apex court in its final August 22, 2012 decision declared the contract between government of Pakistan and the Huawei Technology illegal and held that the procurement procedure of the project should be re-initiated.

DG administration NADRA informed that committee that Pakistan would have to pay the markup on total loan since December 2011 when the loan became effective and an amount of 68 million dollars had been paid to the Huawei. He said that Huawei had conveyed to NADRA that an amount of 90 million US dollars had been incurred on the project so far.

NADRA informed that after the final decision of the court, the authority made its effort to re-initiate the procurement process but Chinese Embassy in Pakistan in September 2012 had conveyed its government’s message that under the concessional loan agreement between two governments, M/s Huawei is the sole company supported by them for this project. “EXIM Bank China has linked the project with other Chinese funded projects. They are asking Pakistan Government to resolve the matter, failing which disbursement to all projects may be stopped,” said the DG NADRA.

He also said that in view of the Chinese position, ECC being the competent forum have accorded approval under Rule 5 of PPRA Rules 2004, granting exemption from tendering in favour of Huawei Technology. “Cabinet has ratified the above decision subject to conditions that no price escalation will be allowed,” he also said.

NADRA told the committee that National Accountability Bureau in its inquiry held that no evidence of corruption or misuse of authority had been found. He said Ministry of Interior and NADRA had filed review petition before SC in September 2012. “A committee of Planning Commission under the supervision of Dr. Samar Mubarakmand approved technical proposal of the project, then PM and cabinet approved tender waiver, price reasonability was assessed by a committee and ECNEC had approved the project,” said DG NADRA.

Ather Sayal, Additional Secretary Ministry of Interior said that Special Assistant to Prime Minister on Foreign Affairs Tariq Fatemi, after PM ‘s recent visit to China, had proposed an inter-ministerial committee to re-examine all aspects of the project.

“Fatemi also proposed that the NAB may be asked for a fresh inquiry,” he said adding that the Ministry of Interior had endorsed the proposal and a summary had been sent to PM for final approval.