The Auditor General of Pakistan (AGP) has detected embezzlements, irregularities, loss and mismanagement of more than Rs 8.93 billion in the accounts of Pakistan Railways.
This includes the Rs 3.2 billion procedural violations including internal control weakness and irregularities not considered worth reporting to the Public Accounts Committee (PAC) by the AGP.
The Audit Report 2010-11 available with Business Recorder notes: (i) Misappropriation of scrap material valued at Rs 194.717 million, (ii) Pilferage of fitting/equipment from rolling stock valued at Rs 151.873 million was observed, (iii) There were five cases of theft of material valued at Rs 59.007 million, (iv) There were three cases of bogus/fraudulent payments of Rs 0.955 million, (v) Auditable record was not produced in five instances, (vi) loss of Rs 830.589 million was sustained due to sale of scrap at lower rates, (vii) PR sustained loss of 961.2299 million due to less-recovery of Sui Gas charges, (viii) PR sustained loss of Rs 558.12 million due to injudicious evaluation of tenders (ix) Three instances of non-recovery of Railway dues, rental charges and departmental charges amounting to Rs 241.291 million were identified, (x)Irregular deposit of government receipts amounting to Rs 24.045 million in a private bank account was noticed, (xi) Contracts valued at Rs 23.674 million were awarded without fair competition, (xii) There was one case of unjustified purchase of vehicles, (xiii) Loss on account of potential earning and blockage of capital due to delayed execution of a project was pointed out, (xiv) loss on account of potential earning was observed due to inordinate delay in carrying out periodical overhauling/repair of wagons, coaches and locomotives, (xv) Scrap valued at Rs 861.015 million was awaiting disposal, (xvi) Loss of potential earning due to avoidable detention of wagons, coaches and locomotives was pointed out, (xvii) PR did not harness potential earning of Rs 479.689 million due to non-leasing of 15,989 acres of agricultural land, (xvii) Substandard repair/overhauling of traction motors involving Rs 175.42 million was noticed, (xix) Three cases of non-installation/commissioning of imported machinery valued at Rs 123.205 million were pointed out, (xx) wasteful expenditure of Rs 44.461 million was incurred on electricity charges on closed Electric Traction section, (xxi) Wasteful expenditure of Rs 45.768 million on idle staff and overstaffing was pointed out, (xxii) unnecessary detention of locomotives consumed extra fuel valued at Rs 11.98 million, (xxiii) No replacement was received for defective material valued at Rs 7.229 million (xxiv) PR had to pay Rs 3.465 million to a contractor on account of interest due to late payment, (xxv) in two cases LPS amounting to Rs 3.459 million was paid due to late payment of utilities charges, (xxvi)The amount of un-cashed cheques amounting to Rs 326.655 million were not in the accounts of FY 2009-10 resulting in overstatement of expenditure for the year (xxvii) unnecessary procurement of material valued at Rs 216.199 million was pointed out, (xxviii) Advances for local purchases amounting to Rs 14.065 million were outstanding, (xxix) PR suffered loss of Rs 9.441 million due to non-recovery of guaranteed amount as per contract, (xxx) losses were neither reflected in the accounts nor were reported to Audit, (xxxi) Released lube oil was re-used in locomotives and power vans affecting their life and performance, (xxxii) Non-provision of gas valued at Rs 63,000 only for air-conditioned coaches deprived PR of potential earnings amounting to Rs 309.258 million, (xxxiii) No proper record regarding issuance/consumption of HSD oil and lube oil being maintained, and (xxxiv) loss occurred on account of wastage of fuel due to increase in running time and imposition of speed restrictions.
The Report-2010-11 revealed that the national kitty faced a loss of Rs 755.334 million due to lower rates of scrap. The audit says that non-transparency in tender process led to blockage of revenue of Rs 1.5 billion and loss of Rs 755.334 million due to lower rates of scrap.
The report says that tender for the sale of scrap material consisting of various types was opened on November 25, 2008 but the same was filed on January 31, 2009 as the tender committee could not devise a mechanism to evaluate the bids. Subsequently the tender was reopened on May 8, 2009 illegally and without justification though the tender committee recommended for filing and re-floating of the tender, PR made a mess of the whole affair by awarding the contract to different bidders one after the other. The matter went into litigation and ultimately FIA took cognizance of the matter and stopped lifting of scrap.
Similarly, tender for the sale of scrap in bulk was opened on January, 2010. The tender committee in its meeting held on January 7 and February 3, 2010 recommended filing the tender on account of it being less than the market rate as well as due to discrepancies/ violations in tender conditions.
The matter was also discussed in DAC meeting held on January 3, 2011. The DAC directed the PO to furnish a comprehensive reply to Audit. No reply was received till finalisation of the audit report.
The report further revealed that the national kitty faced a loss of Rs 961.299 million due to unadjusted account of Sui Gas charges.
Audit of Lahore Division revealed that an amount of Rs 53.183 million was paid by PR to SNGPL during the year 2008-09 on account of gas consumed in service and residential buildings. The total amount of Sui Gas bills issued by Railway administration to the consumers of residential buildings was Rs 3.301 million which was only 9 percent of total payment. An amount of Rs 15.985 million was charged/debited to service buildings. The remaining amount of Rs 37.199 million was a loss sustained by PR. Similar was the position at the end of previous year. Resultantly, the losses swelled to Rs 961.299 million up till 2008-09.
DAC in its meeting held on 24th January, 2011 was informed that loss was due to difference between the rates paid to SNGPL and the recoveries made from the staff and leakage from rusted pipelines.
DAC directed to expedite the handing over of distribution network of Sui Gas to SNGPL and ensure accuracy in record of consumption of Sui Gas in service buildings.
The Report says that the nation also faced a loss of Rs 702.015 million due to non-disposal of scrap, Rs 194.717 million misappropriation of scrap, Rs 154.687 million non-accountal of HSD oil, Rs 151.873 pilferage of fittings/equipment from rolling stock and million rupees of other cases were detected by AGP.