Rs 85. 23 billion irregularities detected in MoW&P

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Auditor General of Pakistan (AGP) has detected irregularities, embezzlements and mismanagement of more than Rs 85. 23 billion in Ministry of Water and Power. The AGP, however, did not consider Rs 882. 12 million reflecting internal control weaknesses and irregularities important enough to report to the Public Accounts Committee (PAC). The Audit Report-2010-11 on the accounts of Water and Power Development Authority notes: (i) there were five cases pertaining to fraud/embezzlement Rs 32. 939 million; (ii) misappropriation and shortage of material was noted in five cases Rs 222. 065 million; (iii) there were two cases of non-production of record involving Rs 5. 177 billion; (iv) violation of operational rules and production of record was observed amounting to Rs 32. 695 billion and US $609. 201 million; (v) in six cases, financial indiscipline was pointed out totalling Rs 604. 1 million; (vi) lapses in procurement were noted in one case amounting to Rs 81. 765 million; (vii) lapses in Administration/HRM were pointed out in one case valued at Rs 1. 286 million; (vii) contract mismanagement was observed in four cases totalling Rs 103 million; (ix) in three cases, infractions/wasteful expenditure was observed amounting to Rs 37. 467 million; (x) there were two cases pertaining to asset management totalling Rs 417 million; and (xi) in 10 cases, theft was pointed out amounting to Rs 166. 743 million. A story on massive irregularities, embezzlements, losses and mismanagement amounting to more than Rs 26. 52 billion and US $591. 5 million in Rental Power Projects (RPPs) initiated by PEPCO and PPIB has already been published in Business Recorder on May 29, 2011. The Audit Report-2010-11 available with Business Recorder which would soon be laid in the National Assembly exposed that AGP has detected irregularities, embezzlements, loss and mismanagement of more than Rs 5. 985 billion in Water Wing of the Ministry, Rs 64. 928 million in Power Wing, Rs 1. 146 billion in Hyderabad Eclectic Supply Company Limited (HESCO), Rs 1. 24 billion in Coeternal Power Generation Company Limited (GENCO-II), Rs 470. 658 million in PEPCO, Rs 117. 056 million in National Transmission and Dispatch Company Limited (NTDC), Rs 108. 744 million in Faisalabad Electric Supply company limited (FESCO), Rs 543. 9 million in Gujranwala Electric Power Company Limited (GEPCO), Rs 83. 188 million in Islamabad Electric Supply Company Limited (IESCO), Rs 804. 346 million in Lahore Electric Supply Company Limited (LESCO), Rs 199. 836 million in Multan Electric Power Company Limited (MEPCO), Rs 25. 855 million in Peshwer Electric Supply Company Limited (PESCO), Rs 182. 978 million in Quetta Electric Supply Company Limited (QESCO), Rs 287. 725 million in Sukkur Electric Power Company (SEPCO) and others. The report says that during audit of the accounts of WAPDO/PEPCO and its corporate entities for the financial year 2009-10, irregularities of various nature were observed and duly communicated to the management through Inspection Reports and Advance notice. The observations of serious nature were taken up with Principal Accounting Officer in the shape of draft notes. The Draft notes which could not be responded satisfactory in the DAC meeting were incorporated in the AGP report. Besides an overview and analysis of financial statements of the financial year 2009-10, the audit report includes audit observation involving amount of Rs 39,538. 581 million and US $609. 2 million. Out of total expenditure of the Authority for the financial year 2009-10, auditable expenditure under the jurisdiction of Director General Audit WAPDA was Rs 290. 809 billion covering 239 formations. In Water Wing, the report says that national kitty faced loss of Rs 5. 176 billion due to award of contract with the addition in bid. In Neelum Jhelum Hydro Power Project Muzaffrabad main contract was awarded at a total cost of Rs 90. 9 billion with details as follows: (i) Original discounted total tender price of Rs 87. 4 billion; (ii) Corrected discounted total tender price Rs 92. 6 billion; (iii) Post tender discount Rs 1. 7 billion; and (iv) Adjusted final total tender price. From the above position it was revealed that original tender price was Rs 87. 4 billion. It was corrected to Rs 92. 6 billion adding Rs 5. 176 billion. The original bidding documents were not provided. So it could not be ascertained whether the mistakes were inadvertent and corrected in accordance with the prescribed clauses. Non-production of record was against the clause 14(c)(2) and (3) of the Auditor General s Ordinance, 2001. The matter was discussed in DAC meeting held on February 8, 2011. The DAC directed to produce the original record within a week. The requisite action was awaited. In Power Wing, the Report said that analysis showed that the Wing had created a provision for bad debts amounting to Rs 5. 9 billion during the current financial year, caused a sharp increase in operating cost ie 95 percent and huge decline in net profit ie 28. 46 percent. The Wing has not created any provision for bad debt during the year 2008-09. It was, however, revealed that it was due to some dispute with NTDC/CPPA. The Audit suggested settling the dispute with NTDC/CPPA. The Audit also detected that the nation faced loss of Rs 45. 105 million and Rs 19. 823 million due to adjustment of long outstanding debt and missing material. The report says that energy losses and the receivables have been the grey areas of PEPCO over the years. Transmission and distribution losses of 20. 9% during 2009-10 and receivables of Rs 204. 157 billion as on June, 2010 warrant attention of the management to improve efficiency to bring the distribution companies out of the clutches of financial and operational constraints. The report says that the nation faced loss of Rs 442. 414 million and Rs 28. 244 million due to unlawful recruitment of staff and for engagement of consultants/officers on contract basis against the rules. In GENCO-II, the report says that the national kitty faced the loss of 553. 833 MkWh and Rs 3. 322 billion respectively due to less thermal efficiency against Nepra s approved standard and Rs 1. 23 billion due to consumption of excess heat rate per kwh against Nepra standard. The Nepra has fixed Thermal Efficiency as under: 1) Unite No 11-13 (Block No 1) TPS Guddu 40 percent Thermal Efficiency2) Unite No 5-10 (Block No II) TPS 36% Thermal Efficiency GENCO-II, contrary to the Thermal Power Station Guddu (Block-I and II) noted above did not achieve Thermal Efficiency as per standard fixed by Nepra with the result that GENCO-II failed to generate 553. 833 MkWh units against the Nepra s approved standard. This resulted in revenue loss of Rs 3. 32 billion which needs to be investigated. Similarly, the report exposes many cases of irregularities, embezzlements, losses and mismanagement of billions of rupees in various departments of the Ministry.

Courtesy : Business Recorder


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