National Highways

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 NHA 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 NHA so we will skip other departments and sort out problems faced by NHA,s finance wing. As mentioned that NHA 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 NHA.
 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 guarantee 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.
 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.
 The contractor also faces a lengthy chain of verifications for Project Director, Dy Director. Assistant Director (Accounts) GM Member (Finance) ETC, so