Auditor General of Pakistan (AGP) has detected 289 cases of financial indiscipline, embezzlement, miscalculation, weak internal control system and overpayment amounting to Rs 947.5 billion in Water and Power Development Authority (Wapda) which deals with hydropower projects.
According to the audit report (audit year 2013-14 on the accounts of Wapda), 184 cases were related to irregular expenditure/unjustified payments and violation of rules amounting to Rs 368.652 billion; 9 cases pertained to public money embezzlement amounting to Rs 350.58 billion; 2 cases of errors and miscalculation worth Rs 115.67 million; 6 cases pertained to Rs 5.780 billion and 88 cases pertained to recoveries and overpayments amounting to Rs 572.63 billion.
The following are some details of ''wrongdoings'' of Wapda: In Gomal Zam Dam Project, D.I Khan, a payment of Rs 567.79 million was made to the contractor against Extension of Time (EoT) compensation cost claims in October/December, 2012 and March, 2013. The claims were not processed in accordance with the provision of contract clause as the requisite record was not maintained to substantiate the claims.
In Gomal Zam Dam Project, another payment of Rs 35 1.28 million was made to the contractor on account of price adjustment of material by violating the contract provisions as the current prices of specified material were used other than the sources given in the contract. This resulted in an unauthorised payment of Rs 35 1.28 million during 2012-13.
The matter was taken up with the management in May and October, 2013 and reported to the Ministry in November, 2013. The management replied that the procurement of cement from additional source was granted on account of augmentation in quantum of work and to facilitate the contractor to procure cement in bulk, in the best interest of the project. In the same project, mobilisation advance amounting to Rs 294.43 million was paid to the contractor. The recovery of mobilisation advance was due on July 21, 2010 which was not made until June, 2013. The violation of contract provisions resulted in non-recovery of mobilisation advance of Rs 294.43 million up to 2012-13.
The matter was taken up with management in November, 2012 and reported to the Ministry in November, 2013. The management replied that the case was under progress with high ups for recovery of mobilisation advance as up to 80% physical progress was achieved. In Mangla Dam Raising Project, a cost estimate of Rs 475.76 million was sanctioned for rehabilitation/up-gradation of Mangla-Mirpur dual carriageway. A contract under package-I for construction and up-gradation of existing road from Bohar chowk to Sahab chowk amounting to Rs 170.06 million was awarded on January 17, 2013. The project was neither approved by the ECNEC; nor was it provided in the original/revised PC-I of Mangla Dam Raising Project, which resulted in an unauthorised expenditure of Rs 475.76 million during 2012-13.
The matter was taken up with management in June, 2013 and reported to the Ministry in December, 2013. The management stated that the matter would be revisited and a final reply be submitted in due course. In Mangla Dam Raising Project, Contract MDR-24 was awarded in April, 2005 with completion up to July, 2007. The contract was not executed within the stipulated period whereas an additional payment of Rs 62.99 million was made to the contractor on account of escalation in bitumen rates (during the period June, 2010 to July, 2011) without provision of contract. Resultantly, undue favour was given to contractor as the additional payment was made instead of imposition of an LD for the delayed period in completion of contract.
The matter was taken up with management in December, 2011 and reported to the Ministry in July, 2013. The management replied that the escalation in bitumen price was paid after getting approval of the Authority. In Mangla Dam Raising Project, a contract valuing Rs 598.33 million for construction of remaining works of public buildings in New City Package-2 was awarded to a contractor against the Contract MDR-29A in October, 2009. Subsequently, a variation order for a new/separate work for construction of Lake View Parks along with Mirpur By-Pass Road valuing Rs 25 million was also included without calling open competitive bidding and against the provisional of original/revised PC-I of the project and PPRA Rules-2004.
Audit took the matter up with management in June, 2013 and reported to the Ministry in December, 2013. The management replied that no violation of PPRA Rules-2004 had been made by the Authority. The reply was not tenable as the contract was awarded without competitive bidding as well as the same was not covered under PC-I. DAC directed in its meeting held on February 6-7, 2014 to provide a revised reply along with justification/documentation within 15 days. Audit team has recommended that the matter should be investigated for fixing responsibility besides its regularisation by the competent forum.
In Rainee Canal Project, the Contract RC-7 could not be completed due to non-payment of certified amount of Rs 139.14 million within the stipulated period ie October 20, 2009. The contractor served a notice to the employer for the termination of contract in pursuance of sub-clause-69.1 and lodged different claims due to non-payment by the employer which were not accepted by the engineer. Resultantly, the contractor had gone into arbitration. The arbitrator and the umpire gave decision in favour of the contractor. WAPDA filed a civil suit which was withdrawn as a result of an amicable settlement in June, 2013 in which the claims of Rs 534.84 million were admitted and the payment of Rs 244.70 million was made to the contractor. Inefficient contract mismanagement resulted in unjustified payment of Rs 244.70 million during 2012-13.
The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management replied that an amicable settlement on this issue was made in the best interest of the Authority.
In the office of GM Finance (Water) WAPDA, a loan of Rs 850 million was obtained from GM Insurance & Pension WAPDA @ 13.50% interest payable on a monthly basis in July, 2011. Out of total loan, an amount of Rs 450 million was returned in September, 2011 but neither any interest was paid nor recognised in the financial statements as interest payables. Thus, the financial statements were not depicting true and fair view of accounts. This resulted in non-recognition of interest accrued on loan worth Rs l14.66 million during 2012-13.
The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management replied that during current financial year, the loan along with interest would be repaid if total PSDP allocation was released by Finance Division.
In Tarbela dam project, the Ghazi-Faqirabad road was constructed for transportation of various machinery and construction material required for dam. The local people constructed shops and houses within the right of way of the road through illegal encroachment but no action was taken to vacate the illegal encroachment of WAPDA land worth Rs 45.70 million.
The matter was taken up with the management in November, 2013 and reported to the Ministry in December, 2013. The management replied that efforts were being made to remove the illegal encroachment with the help of civil administration. In Wapda''s three formations, an amount of Rs 36.78 million was outstanding against M/s ASPT Abbottabad, M/s ACE, M/s NDC, NJHPC, IESCO and WAPDA employees on account of room rent, standard rent and power charges of residential/office accommodation. This resulted in non-recovery of Rs 36.780 million upto 2012-13.
The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management replied that the recovery of Rs 0.55 million and Rs 2.38 million was made from employees of GM (South) Hyderabad and IESCO, respectively, whereas efforts were being made to recover the remaining amount. In Cadet College Tarbela, procurement of different items amounting to Rs 22.35 million comprising construction materials, steel cupboard, doors, tables and chairs, mess items, books & laboratory equipment for library were made without observing the PPRA Rules-2004 which resulted in irregular procurements of Rs 22.35 million.
In Lower Indus Right Bank Irrigation & Drainage Project (RBOD-I) Sukkur, a land of 192 acres was acquired for the construction of Hamal Channel. An amount of Rs 4 million was paid to M/s Hidayatullah and Akhtar Ali Kambrani through their power of attorneys against agreed amount of Rs 6 million while the actual amount of award was Rs 21 .25 million. Later on, these powers of attorney were challenged in the Sindh High Court, Karachi and the Court ordered to make payment to the petitioner namely Kanyaa Lal as the powers of attorney were found to be fake. Accordingly, the payment of Rs 35.10 million including the cost of land Rs 7.68 million, additional amount Rs 19.58 million and interest Rs 7.83 million was paid to Kanyaa Lal. Had the payment been made to the real owner, ie, Kanyaa Lal, instead of irrelevant persons Hidayatullah and Akhtar Ali Kambrani on illegal powers of attorney, the loss of Rs 17.84 million could have been avoided.
The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management admitted that the payment of Rs 4 million was made directly to the holder of fake Power of Attorney. In Rainee Canal Project Guddu, the alignment of canal was changed at RD 357+480 to RD 367+752 on the recommendations of the consultant. Resultantly, the authority sustained a loss of Rs 12 million on account of cost of land acquisition already paid to the land owners. The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management replied that due to technical grounds, the change in alignment of the canal was inevitable; the change occurred during the execution of work.
In WAPDA, four officers - Syed Ali Raza Shah, Purdil Khan, Tariq Hamid Khan and Zaheer-ul-Islam - were re-appointed as advisors to Authority after superannuation on a contract basis. An expenditure of Rs 10.86 million on account of pay and allowances was not justified.
The matter was taken up with management in October & November, 2013 and reported to the Ministry in December, 2013 & January, 2014. The management replied that the appointments were made by the WAPDA Authority as per policy of GoP for re-employment of retired officers whose services remained brilliant in the past. DAC directed in its meeting held on February 6-7, 2014 to refer the case to Ministry of Water and Power for a clarification within 15 days. Auditor General has recommended that directives of DAC may be implemented expeditiously.
In the office of GM Finance (B&C) WAPDA, an amount of Rs 5.48 million was not recovered from five tenants on account of cash security deposit including interest thereon from 2005-06 to 2012-13. Moreover, an amount of Rs 3.61 million was also not recovered from seven tenants on account of extra rent for construction of a mezzanine floor from July, 2012 to June, 2013. This resulted in the non-recovery of Rs 9.09 million from tenants on account of security including interest and extra rent.
In WAPDA Teaching Hospital, Lahore, a rebate @ 75% of gross tax payable amounting to Rs 4.71 million was allowed to the various doctors and officers/officials from July, 2011 to June, 2013. The rebate was irregular as the said employees were neither full time teachers nor employees of any non-profit educational institution. Non-observance of Income Tax Ordinance due to allowing 75% rebate to the doctors/officers up to 2012-13 resulted in a loss of Rs 4.71 million to public exchequer.
In Rainee Canal Project Guddu, an overpayment of Rs 15.88 million was made to the contractor in previous IPCs due to excessive measurements of quantities of work done which was deducted in the final payment certificate of the Contract RC-7. The proportionate amount of escalation of Rs 3.81 million paid on the value of excessive work done in previous IPCs was not deducted in final payment certificate. The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management agreed the audit point of view and admitted recovery of escalation paid to contractor.
In WAPDA, four unserviceable off-road vehicles and old parts/dismantled material of Rs 2.20 million has not been disposed of since 2006. The vehicles were kept in the open yard and exposed to adverse environmental effects, which resulted in their deterioration and decrease in value with the passage of time. Non-adherence to rules resulted in non-disposal of off-road vehicles and old parts/dismantled material worth Rs 2.20 million during 2012-13.
In the office of GM Finance (B&C) WAPDA, an amount of Rs 2.10 million was recoverable from M/s Salloos Restaurant, the tenant, on account of rent. M/s Salloos filed the case which was decided in favour of WAPDA by a sessions court but no recovery was made. According to BOQ Item-5.35 of the Contract RC-7, "10 Thuraya Satellite Mobile phone connection and sets having GPS facility @ Rs 0.05 million per set are to be provided by the contractor". As per BOQ Item-5.36 of Contract RC-7, "maintenance and servicing of equipment supplied under Item-5.35 @ Rs 0.05 million per month for 32 months are to be provided by the contractor."
In Rainee Canal Project Guddu, 10 V-wireless phone sets @ Rs 0.01 million per set were provided by the contractor at the cost of Rs 0.1 million along with maintenance charges of Rs 1.6 million @ Rs 0.05 million per set for 32 months against the provision of BOQ. The maintenance charges of 10 Thuraya Satellite mobile phone connections were made instead of V-wireless phone sets. The violation of contractual provisions resulted in an overpayment of Rs 1.28 million to the contractor during 2012-13.
In Tarbela Dam Project, a fire incident took place on March 02, 2013. A departmental inquiry was conducted to investigate the causes of incident and damage to record/office building. According to committee''s report, many T&P items were burnt in the incident and three officials were declared responsible for fire incident in May, 2013. However, no disciplinary/departmental action was taken against them. Non-adherence to the Authority''s instructions for safeguarding the assets of the Authority resulted in a loss of Rs 1 .10 million due to a fire incident.
In Rainee Canal Project Guddu, an amount of Rs 46.96 million instead of Rs 45.95 million was paid to the contractor due to incorrect calculation of escalation which resulted in excess payment of Rs 1.01 million to the contractor. In WAPDA Teaching Hospital Lahore, one Hemodialysis machine valued at Rs l million was received in July, 2010 but neither the said machine was installed nor was it used for the purpose for which a dialysis machine received from the donor. Moreover, the warranty period of Haemodialysis Machine was expired. This resulted in wasteful resources amounting to Rs 1 million due to non-utilisation of the Haemodialysis machine.
In WAPDA, five vehicles worth Rs 3.23 million and electrical and other material worth Rs 92.15 million were stolen from different offices. FIRs were lodged with the concerned police stations but no administrative action was taken to fix the responsibility of loss and to decide its fate. Violation of rules resulted in loss due to theft of vehicles and other material of Rs 95.38 million upto 2012-13.
The matter was taken up with management in November, 2012 and June to November, 2013 and reported to the Ministry in July, December, 2013 and January, 2014. The management replied that in one case recovery of Rs 1.45 million was made and recoveries/disciplinary proceedings in other cases were under process. In Khanpur Dam Project, an amount of Rs 648.75 million was outstanding against Irrigation Departments of KPK & Punjab and CDA Islamabad (beneficiaries) on account of water charges. This resulted in loss of Rs 648.75 million due to non-recovery of water charges during 2012-13. The matter was taken up with the management in October, 2013 and reported to the Ministry in December, 2013. The management replied that the CDA had remitted entire outstanding amount up to December 31, 2013 and efforts were being made to recover the remaining amount of Rs 543.55 million from the government of KPK and Punjab.
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