Forex funds placed in PKR account: AGP faults Wapda for Rs64.8bn loss to kitty

ISLAMABAD: The Auditor General of Pakistan (AGP) has held Wapda responsible for inflicting Rs 64.8 billion financial loss to the national exchequer by placing foreign currency funds raised through Eurobonds in Rupee account.

According to the audit report 2023-24, AGPG has said that according to Section-III (1) of Wapda Guidelines for Enforcing Responsibility for Losses due to fraud, theft or negligence of Individuals, 1982 (amended to date), “all losses, whether of public money or of stores, shall be subjected to preliminary investigation by the officer in whose charge they were, to fix the cause of the loss and the amount involved.”

During audit of accounts of the GM (Finance) Power for the period from July, 2022 to June, 2023, it was observed that Green Euro Bonds amounting to US$ 500 million were issued to arrange funds for making payments of foreign currency components of Diamer Bhasha Dam Project (DBDP) and Munda Dam Hydropower Project (MDHP). However, the funds raised through issuance of the said bonds were deposited in local currency account (PKR) instead of US$ account @ Rs.158.30/US$ as on June 30, 2021. Later on, due to currency exchange rates fluctuations, the exchange rate of US$ to PKR increased to Rs.287.90/US$ from Rs.158.30/US$ as on June 30, 2023.

Audit held that as these funds were raised specifically for making payments of foreign currency component, therefore, the amounts should have been kept in foreign currency account but needful was not done which caused foreign exchange loss of Rs.64.8 billion.

Audit is of the view that poor financial management resulted in loss of Rs.64.8 billion due to placement of funds of Green Euro Bonds in Pak rupee account instead of foreign currency account up to the FY 2022-23.

The matter was taken up with the management in August, 2023 and reported to the Ministry in October, 2023. The management replied that utmost efforts were made for opening and maintaining of foreign currency account. However, State Bank of Pakistan (SBP) was reluctant and did not allow Wapda to retain funds in foreign currency account.

The reply was not acceptable because funds raised from Credit Suisse loan for DHPP were kept in foreign currency account, whereas funds raised through issuance of Green Eurobonds were kept in PKR account which caused huge foreign exchange loss.

The PAO was requested to schedule a DAC meeting vide this office letters dated December 15 & 19, 2023. Subsequently, as per procedure, two reminders were also issued on December 27, 2023 and January 09, 2024, however, DAC meeting could not be scheduled.

Audit has recommended the management to justify placement of funds in local currency account instead of foreign currency account besides fixing responsibility.

Copyright Business Recorder, 2024