Water & power sector entities: AGP identifies 447 cases of malfeasance involving over Rs4trn

ISLAMABAD: The Auditor General of Pakistan has identified 447 cases of embezzlement, misappropriation, fraud, financial irregularities and violation of laws in entities of water and power sectors involving over Rs 4 trillion during the financial year 2019-20 – the first year of PTI government.

According to the AGP report tabled in the National Assembly, 318 cases were identified in the power sector, ie, Pepco, NTDC and power Distribution Companies (Discos) amounting to Rs 2.964 trillion during the previous financial year.

AGP’s key audit findings in power sector are as follows: (i) loss of Rs 4.033 billion due to fraud, embezzlement, misappropriation and theft was pointed out in 21 cases;(ii) in cases human resource/employ related irregularities involving Rs 263.12 million; (iii) 64 varied irregularities of Rs.107.329 billion pertained to procurement of electrical equipment, civil/electrification works, consultancy services and contractual mismanagement; (iv) in 50 cases violations of regulatory laws and regulations involving an amount of Rs.184.153 billion were highlighted; (v) in 108 cases involving an amount of Rs.63.775 billion violation of internal rules & regulations of audited entities was pointed out; (vi) in 04 cases, irregularities of Rs.1.195 billion pertained to the management of accounts with commercial banks and; (vii) in 50 cases recoveries of Rs.2.604 trillion were highlighted.

As a result of audit, a recovery of Rs 316.414 billion was pointed out in this report. Recovery effected from January to December 2019 was Rs 3.703 billion which was verified by the audit.

Shedding light on circular debt in power sector, AGP reports says that as of June 30, 2019, the total amount of circular debt stood at Rs 1.5175 trillion including PHPL loans of Rs 809.8 billion. The major constituents of the circular debt include outstanding capacity payments of Rs 370 billion and energy payments of Rs 227.4 billion. The overall circular debt has increased from Rs 1.160 trillion in FY 2017-18 to Rs 1.517 trillion in FY 2018-19, registering an increase of Rs 357.4 billion.

The power sector in Pakistan now has at its disposal excess energy capacity significantly more than the current or short term expected demand of the country.

Copyright Business Recorder, 2020