Daily Times

ISLAMABAD: Lok Virsa set on the loss of billions of rupees through a series of illegal contracts given to a private firm.

According to the findings of AGPR audit and special constituted committee, constituted by Ministry Information, Culture and Heritage revealed that the Cosmos Productions Pvt Limited sold out Lok Virsa through 15 ancillary agreements from the basic umbrella agreement. All these agreements were found lopsided in favor of the private party which caused huge financial loss to Lok Virsa over several years. Let alone only contract of the museum has caused a financial deficit of millions of rupees as pointed out by the audit authorities.

It has been noted that the process of awarding the various contracts to M/s Cosmos Productions Pvt Limited by the then Executive Director was neither legally correct nor financially appropriate. The then ED was neither legally a competent authority to award the agreement nor had authority to exercise the same powers delegated to the executive director.

The approval of Board of Governors of Lok Virsa was not sought for the policy decision as well contracting out for outsourcing/entering into joint venture and collaborations as required under clause 3(2)(V) of Lok Virsa BoG resolution, dated 19/3/1983.

The report revealed that, the advertisement notice was kept vague by inclusion of the word “etc. ” the word “etc.” involved various items of work worth millions of rupees, which were not included in advertisement notice but were included in the bidding document only. Thus, effective and transparent competitive process was defeated through an advertisement notice which did not adequately describe the scope of work and its value in the bidding process.

The bidding documents neither included a reference to the establishment of Virsa College of Arts, nor were the bidders evaluated against this requirement. Nonetheless, the then Executive Director signed an ancillary agreement with M/s Cosmos Production (Pvt) Limited for establishing a profit-oriented and commercially operated Virsa College over 11000 square feet (later changed to 27,200 Sq. ft. of the land) inside the Lok Virsa Complex.

A competitive bidding process was not followed and was supplanted by inclusion of a range of new items of the work in the existing agreements. Despite the fact that M/s Cosmos Productions (Pvt) Limited has been running the NICS on commercial lines against fees charged from the students, no amount has been paid to Lok Virsa as share of profit or a percentage of the fee, stipulated in the agreement.

The rental agreement for Cosmos Office and NICS Administration Block was signed by a Deputy Director of Lok Virsa, who was not competent to execute the agreement. Further, no approval by the Board of Governors was accorded for the said agreement. The then management of Lok Virsa paid an amount of Rs. 3.8 million to M/s Cosmos Productions for holding of annual festival in violation of the provisions of the agreement that excluded Lok Virsa from bearing any expenditure for the said purpose. The said amount was not deposited back by the firm. As per the audit report the Umbrella Agreement and fifteen ancillary agreements were to expire on 21-7-2009 after completion of five years, but the scope of work under three sub agreements was drastically enhanced on several occasions and further agreements were executed, which were extended from time to time, without the approval of BoG of Lok Virsa for different lengths of times. The said contracts were extended without taking into account the need of any performance evaluation

Of the firm particularly when the it was persistently defaulting in payments of dues stipulated in the agreements.

As per the audit, the Umbrella Agreement and five other ancillary agreements involving Open Air Theatre, Museum Shops, Weekly Crafts and Arts Bazaar, Roof Top Theater and Artisans at Work Festival expire on 20-7-2009. However, the firm was allowed to manage the tasks and kept on holding public assets relating to these agreements without authorization for extended time. The rental agreements with M/s Cosmos Productions Pvt Limited were substantially less than the prevailing market rates. Further the firm has not paid the rent for upper stories of the building in F/6 Markaz, Islamabad in spite of the fact that they occupied it on below market rent.

The contracts emerging from favoritisms gave no financial benefit to the Lok Virsa but Lok Virsa pledged into huge financial losses and these outstanding dues against the firm increased with the passage of time. The Daily Times tried to contact M/s Cosmos Production Pvt Limited many times but no one was available to respond.