KARACHI: The Auditor General of Pakistan (AGP) has detected serious financial irregularities totaling Rs. 1.95 billion in the three projects of the Pakistan Civil Aviation Authority (PCAA).
According to the audit report, the CAA awarded the contract for the reconstruction & upgradation of the main runway at Allama Iqbal International Airport (AIIAP) Lahore to the Joint Venture (M/s China Civil Engineering Construction Corporation (CCECC)-MATRACON Pakistan (Pvt) Ltd and Habib Construction Services) at an agreement cost of Rs 6.45 billion.
As per the contract agreement (Clause 3.4.1.1 Technical Specification Chapter 2 Vol-II), all equipment used in the project must be the latest version produced by the manufacturer. Moreover, a Factory Acceptance Test (FAT) is mandatory to ensure the equipment’s quality and compliance with technical specifications before individual packaging.
However, the contractor had failed to conduct the FAT for imported equipment and had installed it without adhering to the crucial clause of the agreement.
Astonishingly, the cost of the FAT was already included in the equipment’s price, making both the contractor and PCAA responsible for ensuring compliance.
The audit further revealed that the origin of the materials was not certified during manufacturing, and no inspection visits were conducted to verify the manufacturer’s authenticity. Import documents, including goods declaration, bill of lading, and airway/seaway bills, were also unavailable for audit scrutiny.
Despite these glaring violations, an astounding sum of Rs 903.834 million was paid to the contractor for the equipment, which the audit report termed as deemed unauthentic and unjustified, raising concerns about financial mismanagement and lack of due diligence within the CAA.
Similarly, the authority awarded the contract for reconstructing a rigid runway at Quetta International Airport for Operation Aircraft up to ICAO Code 4E to M/s Umer Jan & Co Engineers and Contractors at Rs 4.93 billion.
The project’s timeline was later extended up to October 31, 2022. However, an audit revealed that a payment of Rs 627.543 million was made to the contractor for various Air Field Lighting System items.
Shockingly, the evidence regarding the quality and technical specifications of the Air Field Lighting System equipment/items, as per the contract and test reports, was unavailable in the produced records.
During 2021-22, the CAA awarded three contracts to M/s Selex ES INC, USA, and made 60% payment of Phase-I & II cost on a Pro-Rate Basis amounting to Rs 418.990 million.
However, the audit uncovered a serious lapse in the documentation process. Necessary documents, such as bill of lading, commercial invoice, packing list, certificates of origin, and export license, were not found attached to the payment vouchers, terming this lack of compliance as weak internal controls and potential mismanagement of funds.
Despite the audit’s detailed observations, the report said that the CAA has yet to respond, and the convening of the Departmental Accounts Committee (DAC) meeting has been continuously delayed, leaving the irregularities unaddressed. The audit report also recommends prompt corrective action and identifying responsibility for these violations of rules, causing to raise transparency and accountability issues within the PCAA.
Copyright Business Recorder, 2023
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