Daily Times

ISLAMABAD: A government audit found irregularities worth Rs 5.4 billion in projects completed by the Peshawar Electric Supply Company (PESCO).

The audit, conducted by the Auditor General of Pakistan, revealed irregular procurement of electrical material by PESCO worth Rs 2.4 billion.

The audit also observed that various projects of USAID with PESCO, which aimed at improving customer services and increasing revenues, worth Rs 2 billion had not been completed. The audit report further pointed out that the non-utilization of electrical material procured under USAID amounted to Rs 1.04 billion. “In PESCO, 25 purchase orders for supply of various types of electrical material amounting to Rs 2.432 billion were issued to various suppliers without receipt of prototype approval which was irregular,” the report said.

The document further stated that non-adherence of provisions of purchase orders resulted in irregular procurement, which took place during the financial year 2015-2016. The management of PESCO argued that in 20 cases, the purchase orders were awarded after getting valid prototype approvals from suppliers. “The approval in the remaining cases is awaited,” PESCO said. “The reply was not tenable as no documentary evidence was provided in its support,” the audit report said.

Regarding the non-achievement of projects under USAID, the report stated that an amount of Rs 1.954 billion was financed by USAID, an independent federal agency of the United States which provides aid to foreign countries, for 12 major IT driven projects at PESCO Headquarters, Peshawar. The USAID Power Distribution Programme (PDP) was initiated with PESCO to improve their financial and operational performance with the main focus on reduction in losses, increase in revenue and improved customer services.

“The projects were required to be completed by the year 2015. However, they remained pending due to non-deployment of adequate resources. Hence, the desired objectives of the USAID projects could not be reaped.” the report said.

“Poor contract management resulted in non-achievement of objectives of project amounting to Rs 1.9 million financed under USAID upto the financial year 2015-16,” it said.

However, the management rejected the audit claims. It said that 11 of the projects had been completed.

However, the auditors expressed dissatisfaction over the response, terming them unreasonable as no documentary evidence was provided.

Likewise, equipment, comprising tools, vehicles, transformers, towers and other ancillary material amounting to Rs 1,921 million was provided to PESCO under USAID funds.

“However the management could only utilize material valuing Rs 871.80 million leaving unutilised balance of material amounting to Rs 1,049 million. Poor inventory management resulted in non-utilisation of electrical material valuing Rs 1049 million during the financial year 2015-16,” the report stated.

The management said that material valuing Rs 40.36 million had been issued to field formations, while utilization of remaining material was under progress.

The Departmental Audit Committee (DAC) in January had directed the management to provide record of completed action to audit and expedite the utilization of the remaining material.

The audit recommended that the management needed to implement DAC’s directions.

The audit further recommended that the management needed to investigate the matters of irregular procuring material and non-achievement of projects under USAID for fixing responsibility.

Published in Daily Times, November 2^nd 2017.