At a time when Pakistan Railways (PR) is facing its worst financial crunch and seeking a bailout package from the government to keep trains on track, the audit report of railways accounts for 2010-11 unearths severe financial irregularities and mismanagement, losses and embezzlements amounting to Rs 5.5 billion in operations in financial year 2009-10.
Only on Friday, the government released Rs 11.5 billion to Pakistan Railways for repairing locomotives and refurbishing tracks. The audit report reveals misappropriation of scrap material valued Rs 194.717 million as well as pilferage of fittings and equipment from rolling stock valued Rs 151.873 million. “There were five cases of theft of material costing Rs 59.007 million. There were three cases of bogus or fraudulent payments of Rs 0.955 million,” the report adds.
It says auditable record was not produced in five instances. “Loss of Rs 830.589 million was sustained due to sale of scrap at lower rates. Railways also sustained a loss of Rs 961.299 million due to limited recovery of Sui Gas charges, as well as a loss of Rs 558.12 million due to injudicious evaluation of tenders,” the report points out, identifying three instances of non-recovery of railways dues, rental charges and departmental charges amounting to Rs 241.291 million. The report notices irregular deposit of government receipts amounting to Rs 24.045 million in a private bank account adding that contracts worth Rs 23.674 million were awarded without fair competition.
The report reveals loss on account of potential earnings and blockage of capital due to delayed execution of a project and loss on account of potential earnings due to inordinate delay in carrying out periodical overhauling and repair of wagons, coaches and locomotives. “Scrap worth Rs 861.015 million was awaiting disposal,” the report says, further revealing loss of potential earnings due to avoidable detention of wagons, coaches and locomotives. The audit report says railways did not harness potential earnings of Rs 479.689 million due to non-leasing of 15,989 acres of agricultural land. “Substandard repair and overhauling of traction motors costing Rs 175.420 million was noticed. Three cases of non-installation of imported machinery worth Rs 123.205 million were noticed. Wasteful expenditure of Rs 44.461 million was incurred on electricity charges on a closed electric traction section,” the audit points out.
The report also highlights wasteful expenditure of Rs 45.768 million on idle staff and over-staffing. “Unnecessary detention of locomotives consumed extra fuel worth Rs 11.98 million. No replacement was received for defective material valued at Rs 7.229 million,” the report says, adding that railways had to pay Rs 3.465 million to a contractor on account of interest due to late payment. “In two cases, late payment surcharge amounting to Rs 3.459 million was paid on account of utilities charges. The amount of uncashed cheques amounting to Rs 326.655 million was not written back from the accounts of FY 2009-10, resulting in overstatement of expenditure for the year,” the report says, further revealing unnecessary procurement of material costing Rs 216.199 million.
The report adds that advances for local purchases amounting to Rs 14.065 million were outstanding. “Railways suffered a loss of Rs 9.441 million due to non-recovery of guaranteed amount per contract,” the report says, adding that losses were neither reflected in the accounts nor were reported to the audit. The report further points out that open engine oil was re-used in locomotives and power vans affecting their life and performance. It points out that non-provision of gas worth Rs 63,000 for air-conditioned coaches deprived PR of potential earnings of Rs 309.258 million. “No proper record regarding issuance or consumption of HSD oil and lube oil was being maintained. Loss occurred on account of wastage of fuel due to increase in running time and imposition of speed restrictions,” the report adds. The audit report further says that during the financial year 2009-10, railways earned Rs 21,889.292 million and incurred expenditure amounting to Rs 62,609.718 million.
