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December 20, 2018

Audit reveals Rs11 bn irregularities in Multan Metro Project


December 20, 2018

ISLAMABAD: An audit inquiry into the Multan Metro Project has revealed irregularities and misspending to the tune of Rs11 billion, The News has learnt. The audit report conducted on the request of the PTI government in Punjab, a copy of which is available with The News, reveals that the project completed at a cost of Rs28.38 billion during Shahbaz Sharif government could have been executed at approximately 30 percent less expenditure in case proper estimates were worked out.

The audit further revealed that the initial environment examination and environmental impact assessment were not carried out as required under Section 12 of the Pakistan Environmental Protection Act, 1997, despite its provision in the PC-1. It has also been pointed out that effective implementation of the system of internal controls as laid down in the departmental codes/instructions was found lacking. Therefore, lapses in financial management, contract management, construction and works and deviation from agreement clauses/specification/templates were observed, the audit revealed, adding that there were a number of cases in which excess rates than admissible ones were approved due to application of higher input rates.

After having complete audit of the project accounts, the report recommended recovery of Rs3.48 billion, but the Authority admitted recovery to the extent of Rs423.5 million out of which Rs81.92 were verified.

The Authority promised that the admitted recovery of Rs423.53 would be recovered in due course of time. Since former Punjab Chief minister Shahbaz Sharif is in the custody of National Accountability Bureau for alleged malpractices in provincial government projects, so he could not be contacted. However, an official, on request of not being named, said that after compilation of audit report an explanation is sought from the accused authority. And in this case no explanation has yet come regarding anomalies in execution of the project.

On financial management side, the audit pointed out that the project was divided into nine packages in order to get its approval from the Executive Committee of National Economic Council (Ecnec). Then doubtful payment due to non-reconciliation of payments for land compensation with treasury (District Accounts Office) Multan to the tune of Rs3.36 billion was also pointed out.

Further that excess payment over and above the agreed tender percentage of Rs247 million was also made. Non-recovery on account of price de-escalation on diesel, steel and bitumen to the tune of Rs255 million was also pointed out in AGP report.

The report continued to point out that Rs19 and 8.4 million was also pointed out under head of non-credit of mark-up/profit and secured advance against perishable items respectively. The report also pointed out irregularities in procurement and contract management to the tune of Rs1.91 billion which include procurement of bitumen, acceptance of equipment of lower specification and non-execution of complete job.

Then comes construction and works where irregularities to the tune of Rs3 billion were pointed out. These irregularities were pointed out in over payment, unauthorised payment and sanction of higher rates by adding inadmissible carriage in concrete rates.

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