WAPDA and PEPCO Massive irregularities detected in accounts

[LahoreEstate]

By Sajid Chaudhry

ISLAMABAD: The Auditor General Pakistan (AGP) office has detected financial misappropriation and wasteful expenditures worth Rs 4.883 billion under audit observation for the accounts of Water and Power Development Authority (WAPDA) and Pakistan Electric Power Company (PEPCO) during the audit year 2008-09.

AGP office in its audit report has also recommended that WAPDA and PEPCO companies need to ensure timely and efficient utilization of “Deposit Works Funds” instead of investing in banks to earn interest. The report of the Auditor General Pakistan (AGP) office for the fiscal year 2007-08, which is finalised during 2008-09 and have been submitted to the National Assembly revealed. These Accounts will be placed before the Public Accounts Committee soon so that officials involved in misappropriation of funds and financial irregularities could be taken to task, official sources informed.

AGP office has observed during the audit that despite 1.7 percent decrease in generation, the generation cost during 2007-08 increased by 30 percent over the last fiscal year 2006-07. Average production unit cost increased by almost 32 percent over the previous fiscal year and the main contributor to this increase was the prices of fuel. The alarming thing is that despite having huge hydel resources just 9 percent of the generation cost has been attributed to hydel generation whereas 91 percent goes to the costlier thermal generation, which has played its role to cripple the already fragile economy of the country.

Audit observations incorporated in this report are categorized as five cases of asset management worth Rs 1.692 billion, seven cases of financial indiscipline worth Rs 834.45 million, one case of unauthorized payment of Rs 16.346 million, six cases of contract mismanagement of Rs 935.616 million, nine cases of theft worth Rs 74.977 million, eight cases of misappropriation and shortage of material worth Rs 215.587 million, two cases of wasteful expenditures worth Rs 130.316 million and two cases of lapse of procurement worth Rs 98.224 million.

AGP office in its recommendations contained in the audit report has stressed the need that WAPDA and PEPCO’s endeavors must reflective of the commitment to support the national economy through improved hydel, thermal mix of power generation, provision of electricity at affordable rates and above all, perspective planning and timely execution of projects to meet water and power demands of growing population, agriculture and industry.

Implementation and execution of water and hydropower projects as envisaged in Vision 2025 programme needs to be accelerated to cope up with prevailing shortfall and future demand of water and power, the report observed. The Audit report has suggested that the management of distribution and generation companies needs to review its number of senior positions such as Directors and Chief Engineers with a view to rationalise its operating cost.

PEPCO companies need to maintain such portfolio of investment, which could generate maximum return. Currently the companies are experiencing hardship in managing their operations; therefore, they require revision in their operational policies, the report further recommended. Audit report has further recommended that WAPDA, PEPCO and its corporate entities need to prepare financial improvement and recovery plans for recovery of receivables, increase in sales revenues, reduction in energy losses and curtailment of operation and maintenance cost. It has noted that materials worth millions of rupees is stolen from sites in distribution companies each year and stressed the need to put in place system for safeguarding the assets need to be improved to control wide spread of occurrence of theft.

http://www.dailytimes.com.pk/default.asp...2009_pg5_1