Railways’ 2009-10 audit highlights massive corruption and losses

ISLAMABAD: The 2009-10 audit report of Pakistan Railways clearly indicates that the present day severe financial crunch of the organisation was due to persistent pilferage, misappropriation of funds and habitual apathy of railways’ high-ups to check wastage of public money.
Pakistan Railways (PR) is facing a financial deficit of around Rs 40 billion and has so far closed down thirteen passenger trains to address fiscal constraints, but the Auditor-General of Pakistan’s 217-page report said embezzlement, wastage of funds, failure in recovering outstanding dues and other financial irregularities amounting to billions of rupees were the reasons for the losses.
The audit report said PR administration failed to recover Rs 310.34 million on account of maintenance and operational charges of sidings or level-crossings from Defence Department, WAPDA, and other government institutes for years. Separately, PR also sustained a loss of Rs 1,324.13 million due to the non-recovery of lease and rental charges from various government and private organisations.
“The scrutiny of record regarding procurement and manufacturing of 75 DE locomotives disclosed that PR failed to assess the financial implications and decided injudiciously to purchase new locomotives despite a financial crunch. A comparison between procurement of locomotives vis-a-vis rehabilitation of old ones disclosed that PR would bear extra expenditure of Rs 5,581.425 million,” the report said.
It said during a review of the record of the Financial Advisor and Chief Accounts Officer (Revenue), Lahore, it was noticed that freight charges amounting to Rs 101.841 million were outstanding against the Ministry of Defence since long. “No effective action seems to have been taken to realise the outstanding dues,” object audit authorities.
They said PR failed to recover Rs 49.882 million outstanding against Royal Palm Golf and Country Club, while pointing out that railways sustained a loss of Rs 45.617 million on account of commercial rent due to unauthorised utilisation of its land by the Capital Development Authority in Islamabad in November 2009.
PR also suffered a loss of Rs 394.100 million due to non-realisation of lease and crossings charges and non-adjustment of payment against the SNGPL. The report disclosed that PR failed to recover rental and punitive charges amounting to Rs 187.219 million on account of TV cable crossings.
The report further revealed that PR land worth Rs 5,694.084 million was under illegal occupation, while it sustained a loss of Rs 9.683 million due to unauthorised occupation of its quarters across the country.
The report added that irregular expenditure of Rs 7.828 million was made on renovation, special repairs of selected bungalows in violation of provisions of Pakistan Railway Ways and Works Manual, Pakistan Railway General Code and Pakistan Government Rule for the Engineering Department.
An unjustified expenditure of Rs 10 million was made against consultancy services for the restructuring of PR, which produced no result whatsoever. The report further reveals that an unauthorised expenditure of Rs 20.254 million was incurred on irregular re-employment of retired government officials after superannuation, in violation of the rules from January 2002 to December 2009.
“PR incurred an expenditure of Rs 75.133 million as consultancy fee for conducting feasibility studies of six projects from 2004 to 2008 while the PC-1 of the relevant projects have so far not been prepared and approved from the competent authority. Thus, due to wrong planning, management failed to achieve the envisaged benefits and the expenditure of Rs 75.133 million proved wasteful,” the report added.