The incumbent Minister for Water and Power is, reportedly, not taking action against the Alternate Energy Development Board (AEDB) in spite of massive financial irregularities revealed in two different audit reports prepared by the Auditor General of Pakistan. The Federal Investigation Agency (FIA) had also conducted an inquiry into the financial mismanagement of AEDB. However, the accused are still at large.
Naveed Qamar's predecessor, Raja Parvez Ashraf had publicly announced action would be taken against those responsible for the financial mismanagement including the people on the top who are believed to have close contacts in the Presidency.
According to official documents fraud ranges from payments against doubtful expenditure for the procurement of solar equipment, luminous street lights, machinery and equipment for wind turbines. The audit team noted that Air Marshall Shahid Hamid, Chief Executive Officer (CEO) of AEDB till May 2008, appointed Irfan Afzal Mirza initially as consultant and then Director General (technical). An amount of Rs 19.028 million was paid to Clean Power (Pvt) Limited on account of research activities on fell cell, bio-diesel, innovative lighting and other feasibility studies.
The audit team noted that Shahid Hamid was the Director of M/s Clean Power and subscriber to the Memorandum of Association of the company while Irfan Afzal Mirza was named as witness in the Memorandum duly registered with Securities and Exchange Commission of Pakistan (SECP). There was a clear conflict of interest and therefore the CEO illegally used his position to benefit his private company. After departure of CEO, Irfan Mirza allegedly continued to look after the interest of his previous boss who appointed him in disregarding rules and regulations.
The current audit findings were submitted to Shahid Hamid, now retired who in his reply through a counsel said: "our client has never been on the BoDs of M/s Clean Powers Limited nor its subscribers and particularly during the period indicated in the AEDB letter ie 2004-05 to 2006-07. Moreover, all projects, work orders were processed strictly in accordance with rules and procedures".
The counsel further added that his client had been addressed as Director Clean Power with mala fide intent and with ulterior motive to defame him. Audit also mentions about another company ie M/s ALSoft with the same address, which reportedly received undue favours.
During the audit of AEDB camp office Karachi, a bank account no 1601-01 was found in Soneri Bank Limited, DHA branch, Karachi. Management concealed this account from the list provided to audit. This account was maintained by Lieutenant Colonel Asim Fwad, then DG of AEDB. Different official transactions of AEDB's were noticed with account number No 1601-01t. Two amounts of Rs 1,356,800 and Rs .97,000 were transferred on February 28, 2008 and Rs 532,330 on May 17, 2007 from other AEDB accounts. The amount transferred to other AEDB accounts is Rs 1,219,065.
The audit also found suspicious lease agreement of store in Karachi amounting to Rs 480,000. Other audit findings were as follows: Payment of Rs 6.72 million to a company whereabouts of which were not known to audit, misappropriation of Rs 1.78 million on account of cheque drawn by the drawing and disbursing office; a loss of Rs 17.082 million on unsuccessful project titled production of bio-diesel; loss of Rs 3.069 million on mis-procurement of hydel turbine; misappropriation of Rs 1,568,833; suspicious expenditure of Rs 2.047 million on purchase of obsolete hydel turbine; irregular appointment of technical advisor as an employee consultant and technical service provider at the same time; and unauthorised and irregular expenditure of Rs 1,679,000 on account of mis-procurement of electric rickshaw.
During the audit of 2009-10 it was noted that AEDB entered into a rent agreement for three years with the owner for the office building of AEDB on a monthly rent of Rs 600,000 on December 31, 2007. The contract included a provision of 10 per cent increase each year.
Audit further noted that as per the approval of Prime Minister conveyed to AEDB by the Ministry of Water and Power on February 1, 2008, the rental ceiling to hire the building for AEDB headquarters was at the rate of Rs 35.64 per sq ft subject to the condition that the AEDB should not pay two months' rent (Rs 1.2 million) as security to landlord in addition to one year's advance rent.
Audit observed that AEDB entered into an agreement on December 31, 2007 without awaiting the approval of the Prime Minister and occupied the building on January 7, 2008 whereas approval of the Prime Minister was conveyed by the Ministry of Water and Power on February 1, 2008.
AEDB did not obtain the approval of Ministry of Housing and Works for space entitlement along with details of sanctioned strength of officer/ official as per their letter. Audit maintained that despite Prime Minister's disagreement with the proposal of extending two months security payment, AEDB made a payment of Rs 1.2 million on this account. Audit maintains that excess payment of Rs 4.7 million has put an extra burden on the exchequer.