ISLAMABAD – The Audit Report 2009-10 by the Auditor General of Pakistan has revealed that out of the total 42,001 fixed assets of the Pakistan State Oil (PSO), 16, 402 having book value of Rs 325 million could not be physically traced.
The audit report says: “In Pakistan State Oil (PSO), verification and reconciliation of fixed assets was carried out in the year 2008-09. Out of total 42,001 fixed assets, 16, 402 having book value of Rs 325 million could not be physically traced.”
The report further reveals: “This was also discussed in the 182nd meeting of the Board of Management (BoM) held on April 22, 2009. The BoM directed the management to examine the cases involving Rs 100,000 and above, fix responsibility for misplacement, theft or loss. However, in disregard to the directives, no action seemed to have been taken by the management till audit in November 2009.” The officials of the Auditor General of Pakistan also point out in the same audit report that the PSO awarded a contract worth Rs 312 million without following procurement rules.
“PSO awarded a contract for installation of Retail Automation system to a firm, M/s Zaqsoft in September 2003 at a cost of Rs 0.240 million per outlet. The purpose of Retail Automation System was to automate and control the point of sale terminal used for PSO Cards Transactions. Retail Automation System was installed at more than 1,300 Retail Outlets (petrol stations) across the country costing more than Rs 312 million,” the report says.
It adds, “From the report of Retail Automation System Investigation & Re-evaluation Committee, which was constituted by the management to investigate the matters of ‘Retail Automation Project’ in July 2009; it transpired that the contract was awarded to a firm in violation of procurement policy framed by the organisation. No purchase requisition/ cost estimate was generated. No tendering process was executed. No vendor prequalification based on technical and financial strength was carried out. No competitive bidding was held. No formal technical evaluation of the offered system was carried out and no commercial price negotiations were held as per rules.”
Mentioning committee’s report the audit officials say, “The report further stated that during tendering of a similar project in 2007 (i.e. after 4 years of agreement with the firm), unit price of pump controller system offered by the lowest bidder at Rs 0.177 million was much lower than the existing pump controllers being installed by the firm.”
“It was also evident from the committee’s report that the performance of the firm was highly unsatisfactory indicating that the vendor did not possess the capacity to execute the project. The whole scenario illustrated that the award of contract was not transparent and it was awarded on exorbitant rates; the interest of the company was not safeguarded at the time of awarding contract and the management failed to implement internal controls in their organization in awarding the contract,” the audit report further says.
PSO’s Rs 325m fixed assets only on paper
