The management of the National Logistic Cell (NLC), an army-run commercial enterprise, has wasted Rs1.65 billion of taxpayers’ money through wrongful spending, said the audit report of the company.
The Auditor General of Pakistan pointing out financial irregularities worth Rs1.65 billion in NLC accounts stated that the management and the defence ministry were not even willing to reply to the questions raised by the auditors.
The company’s audit report for the year 2011-12 tabled before the National Assembly Public Accounts Committee stated that NLC had suffered a loss of Rs1.8 billion in 2010 too.
It suffered a billion rupees loss in a joint venture project with Enshaa Group due to misappropriation of funds, the audit report said.
The NLC management took up an adventurous business venture of constructing Karachi Financial Tower on land leased from Pakistan Railways at a cost of Rs2.3 billion in 2006 on II Chundrigar Road, the financial hub of the country.
During the course of the project the NLC management siphoned more than a billion rupees from the company accounts with the connivance of members of the board of directors and contractors for the said project, explained the auditors in their report.
The matter was reported to the management and the defence ministry, but the NLC management was reluctant to provide the basic record of the project and justify the expenditures, the report said.
The audit report further states that NLC incurred losses worth Rs215.8 million in an agreement with HQ Log Area, Peshawar for construction of Cadet College, Swabi.
The NLC Engineering Department awarded seven contracts worth Rs196 million to Reinforced Earth (Pvt.) Ltd. on single tender basis on the plea that the firm was the sole proprietor of the required products.
The office of the auditor general reported the lacuna to the management and the defence ministry in November 2011, but no reply has been furnished so far. The NLC was not exempted from public procurement rules that disallow purchasing goods on a single tender basis.
The auditor general found wrongdoings worth Rs42 million in a project signed with the National High Authority. The agreed amount of the project was Rs200 million acquired on loan from a bank.
The auditors also found that instead of calling open bids, the management purchased 3,013 tyres from the local market on higher rates, which caused Rs44.7 million worth of loss to the NLC.
The NLC threw away Rs6.6 million on the appointment of a retired colonel and a retired brigadier of Pakistan Army against the prescribed qualification under the rules, hence considered irregular.
The matter was reported to the management on November 2011 and the ministry of defence as well, but no reply was furnished till the finalisation of this audit report.
Published In The Express Tribune, June 16th, 2012.
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