Rs 24 bn audit observations in WAPDA

[Naveed Yaseen]

By Ijaz Kakakhel
ISLAMABAD: Auditor General of Pakistan has placed Rs 24.252 billion under audit observation in the accounts of Water and Power Development Authority (WAPDA) for the year 2005-06 in its Audit Report for the year 2006-07.

According to the report released here on the water wing of the WAPDA suffered heavily due to several reasons. In Greater Thal Canal Project, mismanagement of contract resulted in an increase of Rs 820.179 million in the bid price. At Ghazi Barotha Project, loss of Rs 142.909 million was sustained due to delay in adjustment of mobilisation advance. Expenditure of Rs 113.133 million was incurred on consultants without provision in PC-I of Greater Thanl Canal Project.

The audit report further revealed that the results are the outcome of a test audit only. This means that the actual magnitude of all irregularities/losses is likely to be far higher.

In Khan Khwar Power Project, a time barred claim of GST worth Rs 18.359 million was paid to the contractor, the report revealed. At Tarbela Power Station, supplier’s demand to increase the purchase price by an extent of Rs 8.179 million was entertained after issuance of purchase order. At National Drainage Project, the management did not recover additional cost of Rs 6.736 million from two contractors due to not inclusion of contract clause regarding termination of contracts at their risk and cost.

The power wing of WAPDA also revealed several observations and there were; Funds provided by the government for village electrification to the tune of Rs 18.468 billion were kept in banks but the interest earned to the extent of Rs 219.125 million was not remitted to the government.

Works-in-progress amounting to Rs 14.831 billion were pending for capitalisation in respect of DISCOs. Some of the works were started more than a decade ago but remained incomplete.

Non-realisation of electricity dues to the extent of Rs 1.684 billion from un-registered consumers using direct hooks added to financial loss of HESCO, PESCO and QESCO. Detection charges of Rs 151.929 million for illegal use of electricity by consumers were not recovered in HESCO. Interest of Rs 670.258 million was paid to the IPPs on account of late payments. A dispute of dependable capacity of plant with an Independent Power Producer (IPP) resulted in monetary loss of Rs 454.204 million. Funds were deposited with a bank without obtaining competitive rates resulting in interest loss. Recovery of principal amount of Rs 302.958 million in one case was at stake.

The report further revealed that the companies of the power wing sustained loss of Rs 299.970 million due to non-indemnification of insurance claims. Bank collection charges on electricity bills were deducted by banks in excess of the agreed rate resulting in excess deduction of Rs 219.452 million. Single phase and three phase defective energy meters worth Rs 174.38 million were not replaced despite a lapse of 10 years.

In HESCO, material worth Rs 386 million was misappropriated. Land costing Rs 35.588 million was acquired for a grid station but it was not utilised despite a lapse of 11 years.

Property worth Rs 2.197 billion was not mutated in the name of WAPDA and its entities. In various DISCOs material/equipment worth Rs 80 million was stolen from the sites, which reflected inadequate arrangements to safeguard the assets of the companies.

Some industrial consumers made extensions of load without getting approval from the competent authority, as a result of which an amount of Rs 64 million on account of cost of material, security deposit, rehabilitation charges and fixed charges remained un-recovered.

The damaged/rejected equipment worth Rs 35 million was not replaced/repaired by suppliers despite lapse of 2 years due to absence of time frame in warranty clause of agreement.

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